Nutraceuticals refer to products that are derived from herbal products, minerals, vitamins and dietary substances which are consumed for their physiological benefits or to boost immunity against diseases India has had a rich heritage of herbal medicines and supplements, which have found resonance in our mythology and folklore. The nutraceuticals market in India is expected to grow from $ 4 billion in 2017 to $ 18 billion in 2025 in the backdrop of rising demand for dietary supplements from the upper and middle class. The study analyses the shifting consumer behavior among survey groups regarding healthcare supplements. It also presents a summary of the research findings and consumer survey report and suggests notions to build further. Contains case studies of prominent Indian healthcare firms and portrays a market analysis for strategy definition.

1. Consumer Behavior towards Personal care
and Health Supplements
Submitted to: Dr. Ashish Gupta
Group 11 | MBA IB 19-21
Consumer Behavior Project
Harsh Manish Kanjar 20A
Mayukh Chakraborty 29A
Nihit Bharadwaj 33A
Suyash 54A
Kanishk Gupta 22C

2. 1
INTRODUCTION
Nutraceuticals refer to products that are derived from herbal products, minerals, vitamins and dietary
substances which are consumed for their physiological benefits or to boost immunity against diseases
India has had a rich heritage of herbal medicines and supplements, which have found resonance in our
mythology and folklore. The nutraceuticals market in India is expected to grow from $ 4 billion in 2017
to $ 18 billion in 2025 in the backdrop of rising demand for dietary supplements from upper and middle
class. i
Dietary supplements, which constitute over 65 percent of the Indian nutraceuticals market, which is
growing at a rate of 17 percent, and hence, will drive the growth of the market. India’s unique advantage
of rich heritage and knowledge, availability of raw materials, growth in herbal extract manufacturers
and a strong presence as a preferred supplier in many export markets make it a formidable contender
in the global nutraceuticals market. the nutraceuticals sector has also been opened up significantly to
attract foreign investments: 100 percent FDI is permitted in the manufacturing sector under automatic
route, and such entities are allowed to sell their products through wholesale, retail or e-commerce.ii
A dietary supplement is a manufactured product intended to supplement the diet when taken by mouth
as a pill, capsule, tablet, or liquid. A supplement can provide nutrients either extracted from food sources
or synthetic, individually or in combination, in order to increase the quantity of their consumption. The
class of nutrient compounds includes vitamins, minerals, Proteins and Amino acids, Natural products,
Pro-biotics, body building supplements, essential fatty acids. The Indian definition for the dietary
supplements as per the Food Safety and Security Act 2006 list down the ingredients that a product
should have and it also specifies general properties of nutraceuticals. Globally and in India, more than
50,000 dietary supplements are available.iii

3. 2
What are food supplements?
A food supplement is a product that will perform physiological role beyond the provision of simple
nutritive requirements. It may be food or a part of food containing health-promoting ingredients from
plants, animals, minerals, vitamins, prebiotics or probiotics.
Reasons we should have supplements.
Food that we eat, are not always packed with all the nutrients that are essential for the effective working
of our systems. Thanks to the change in the methods of farming and the chemicals being added to the
soil, the depletion of natural minerals due to over-farming etc, we do not get proper nutrition and that
is the reason food supplements are the need of the hour.
Stress can also increase the body’s need for certain nutrients, and these, can be easily obtained from
supplements.iv
Then, there are antioxidants supplements that can hinder aging and cellular damage. Intake of essential
nutrients in greater amounts, than can be supplied from our regular diet, has been shown to improve
physical performance, fat loss and muscle gain.
Experts state that the need for supplements for disease prevention is so well documented that those
who do not take at least conservative doses of antioxidants should be thought of as reckless. These
people are allowing their body to undergo damage that is unnecessary.
Those who exercise regularly have a much higher need for antioxidants and minerals. Also, degenerative
diseases are caused when there is multiple nutrient deficiencies.v
Athletes suffer from many nutritional deficiencies and can use supplements to ensure optimum supplies
of nutrients for maximum performance. Intake of nutrients has been shown to improve physical
performance, fat loss and also muscle gain.
Consumer Classification along the Wellness Pyramid:
The Wellness Pyramid shown below is made up of consumers classified as:
1. Believers
2. Actives
3. Beginners
4. Passives.
This is dependent upon the following:
• How much is the consumer likely to spend on wellness services, both in terms of ability to spend
and willingness to spend?
• What is the extent of consumption of wellness products and services, in terms of frequency of
usage and extent of usage?
• What is the degree of exposure to health and wellness concepts? What are their information
sources on health and wellness

4. 3
Risks Associated With the Products :
Type of Perceived
Risk
Definition Example
Functional risk Product will not perform as
expected.
Will the product actually help me? Will the product
do god to my body? Will my family benefit from it?
Physical risk Product can harm self and
others; risk to self and
others.
Is the product safe for my body? Will there be no side
affects? Will it suit the body type of my of my family
members?
• How receptive is the consumer towards wellness messages and concepts?
• Is there a willingness to change consumption patterns for health benefits?
Lack of proper standardization in the market has been a major
challenge in the market and has resulted in number of small
companies offering products which are not up to the quality
standards. About 60 to 70% of dietary supplements being sold
across India are fake, counterfeit, unregistered and
unapproved, besides it is extremely difficult to identify them.
Other factors such as prevalence of counterfeit products and
price skimming are few other challenges present in India Dietary
Supplements Market. By seeing this trend in the enormous
growing field there is a compulsion for the regulation of the
standard as well as quality and safety of the dietary
supplements for public health concerns.vi
Structure:
We start with a brief Industry Dynamics, depicting the current state of the industry and its future
predictions along with some major players having market share. Then we move to the Secondary
Research, then to the Survey analysis based primary research followed by a strategic roadmap.

5. 4
Financial risk Product will not be worth
its cost.
Will so much of money spent on it be worth it? Will I
be able to buy the full course? What if after spending
so much money it has no affect?
Psychological and
social risk
Poor product choice will
bruise the consumer’s ego.
Will I feel embarrassed if people come to know that I
am taking health supplements. Will people think I am
weak if I am taking wellness products
Time risk Time spent in product
search may be wasted if the
product does not perform
as expected.
Will I need to evaluate more options? Will need to
try out and do pilot to find out which product suits
me?
Perceived Value :
What is the price of the product with respect to other alternatives in the market and the value I will
derive from the product, will it justification to the price.
Price-Quality Relationship:
Will the quality of the product be equal to expectations that have been set by the salesman or by the
advertisements of the products now that I spend so much on the product.
Positioning:
The positioning of the product is such that they are a great fit for your health and lifestyle where you
do not get proper time to exercise or cannot have a proper balanced diet. So this product will meet
all the requirements and make you more healthy and give you immunity as well.
Image and Quality:
The image and quality of the product is that it is a premium product which helps you to stay fit and
healthy as well as to get a perfect physique. Some also are great for the entire family’s immunity. But
are they really that beneficial? Is the quality really good?

6. 5
Health and dietary supplements come under the ambit of the Nutraceutical Industry. Nutraceuticals
broadly refer to food or part of food items, which also include drinks, that aims to provide health or
medical benefits by preventing or treating a disease. Here, the major focus of nutraceuticals is on
prevention of diseases. Pharmaceuticals, on the other hand, focus on treatment of specific illness.
Nutraceutical market can be classified in two broad segments:
INDUSTRY DYNAMICS
Functional food
and beverages
Dietary health
supplements
Functional food
(fortified foods,
iodinated salts)
Functional beverages
(fortified juices, energy
and sports drinks)
Vitamins and mineral
supplements
Protein supplements
Herbal and other
dietary supplements

7. 6
The market share of F&B (68%) is higher than health supplements (32%). But the latter is projected to
grow at a higher pace than the former owing to changing customer preferences and rising health
awareness amongst people.vii
The growth rates for India has been high in the past and is forecasted to be even higher. In 2017, the
Indian market was worth USD 1.7 billion and is estimated to rise to USD 10 billion in 2022. In 2018,
the Indian nutraceutical market had only 2% share in the global market. This share is estimated to rise
to 3% of the global market by 2022. The major players in the industry are Japan, United States and
Europe which cumulatively make up the 90% of the entire market. The sedentary lifestyle of more
and more middle-class people has made them vulnerable to chronic ailments and they are slowly
becoming more aware and conscious about their health and fitness. viii
Segment-wise market share in India along with key industry player:
1. Functional packaged food
a. In 2016, the market size of this segment was INR 2 billion.
b. Out of all the packaged food under this segment such as fortified flour, fortified oils
etc. probiotic yogurt saw the highest growth of 28%.
c. Key players in this segment are Cargill India Pvt. Ltd. (20% share) followed by Britannia
Industries Ltd. (15% share) and Gujarat Co-operative Milk Federation Ltd. (15%).
1.7
4
10
2012 2017 2022f
Indian Nutraceutical Market (USD billion)
CAGR
18.5%
CAGR
21%

8. 7
2. Functional beverages
a. The market of function beverages is projected to increase to USD 450 million in 2020,
an increase of whopping 70% since 2014.
b. With 63% of the total market value, energy drinks is the largest segment.
c. In sports drinks category, Gatorade by PepsiCo is the leading player and Red Bull in
energy drinks.
3. Dietary supplements
a. In 2018, fish oils recorded the largest growth in the segment with 20% increase.
b. Closely followed by vitamins and other dietary supplements with 15% of growth rate.
c. Based on market share, Amway is the leading key player with 12% market share,
followed by Dabur with 11% share.
Indian dietary supplement market
In 2019, the global dietary supplements industry was worth USD 123.28 billion out of which India
contributed only USD 3 billion. But the underpenetrated market of India poses a huge scope for
improvement in the coming years. The health supplements market is witnessing an intense rise in
competition from FMCG, major ingredients manufacturers and suppliers, ayurvedic and herbal
extract manufacturers and food fortification companies. The total number of participants are
upwards of 500 with Vitamins and minerals being the most competitive one with more than 100
players. Within India, southern region is the major consumer of supplements followed by eastern
region, with top three states being Andhra Pradesh, Tamil Nadu and West Bengal. ix
40%
30%
25%
5%
Share of different types of dietary
supplement
Vitamins and
Minerals
Herbal
supplements
Proteins
Others
12%
11%
6%
5%
4%
4%
2%
56%
Company market share - India
Amway India
Dabur India
Heinz India
Herbalife International India
Himalaya Drug Company
Ranbaxy Laboratories
Elder Pharmaceuticals
Others

9. 8
Key growth drivers – Demand side
1. Rise in health-related issues – Non communicable diseases constituted 61% (5.8 million) of
total fatalities in 2016. Under NCD, cardiovascular diseases (27%) was the top contributor to
fatalities followed by chronic respiratory disorders (13%). Indian consumers perceive these
supplements as an alternative to prescription drugs.
2. Rise in health consciousness and focus on fitness – Awareness regarding healthy and fit
lifestyle has been on a rise lately, especially among the middle segment and higher socio
economic segment of people and their adoption supplements such as proteins, antioxidants
etc. has been steep. The concern and awareness regarding nutrition has been on a steady rise
lately and has led to an increase in the usage of health supplements.
3. Easy availability through introduction of new channels – The penetration of modern retailing
formats has increased manifold through e-commerce platforms, hyper and supermarkets etc.
and the distribution network has seen a tremendous growth in these segments. The
nutraceutical market has immense potential in the Indian market as the penetration as of
2018 was only 10%, with the Urban penetration being the major contributor. With the
increasing distribution capacity and network of retail and grocery stores, there is a huge room
for improvement in these figures. x
2.5
2.8 3
4
4.9
5.9
2017 2018 2019 2020f 2021f 2022f
Indian Dietary supplement market (USD billion)
CAGR
19%

10. 9
4. Government awareness campaigns – Due to lack of penetration in the rural market and the
nutrition status of the country, GOI took several measures to increase the awareness regarding
proper nutrition and brought together Industry players to support the same. In 2009, almost 17%
of the population was malnourished, but after the implementation of these steps, the figure was
reduced to 15 % in 2016.
22.50%
Urban penetration
6.30%
Rural penetration

11. 10
USA Brazil SA UK France Spain Italy India Korea China
Spend Less (Fitness & Wellness) Spend
According to a McKinsey & Co. report India is likely to spend more on fitness and wellness services
and products post COVID.
91% consumers in India have tried a new shopping behavior (Eg: Brand, Retailer) and 65-85%
consumers intent to continue with adopted behavior.
Top 3 qualities for shopping a new brand in India are:
1. Value
2. Availability
3. Quality
But from these stats it is clear that loyalty has taken a hit post COVID as consumers are willing to try
new brands with innovative and value-based offerings. This goes to show that big brands should
continue to invest in R&D, marketing and distribution to avoid loose market share.
Consumers are not just concerned about their health but others too:
New buying behavior in this new normal:
Why, what and how consumers buy is changing due to the COVID-19 outbreak. Consumer priorities
have become centred on the most basic needs, sending demand for hygiene, cleaning and staples
products soaring, while non-essential categories slump. The factors that influence brand decisions are
also changing as a "buy local" trend accelerates.
SECONDARY RESEARCH
64%
I am fearful for my own
health
82%
I am fearful for the health
of others

12. 11
Digital commerce has also seen a boost as new consumers migrate online for grocery shopping – a
rise that is likely to be sustained post-outbreak.
New and everlasting shopping habits:
The outbreak has pushed consumers out of their normal routines. Consumers are adapting new
habits and behaviours that many anticipate will continue in the long term.
The Social Impact:
The COVID-19 breakout has slowed the pace changed daily life for many consumers, and this is having
a profound impact on the way we view personal hygiene, health and how we engage with our
communities, friends and families. People are embracing technology more than ever to support all
aspects and consequences of isolation. There is also positive evidence to suggest that this crisis will
build communities, rather than separate them.
The ways in which people spend their leisure time are changing because of the outbreak and related
social distancing measures, and again, these habits are likely to be sustained. More than half (61%)
plan to continue watching more news after the outbreak, while 55% will prioritize more time with
family. Entertainment, learning and DIY have also seen a rise.
A rise in conscious consumption
Consumers are more mindful of
what they are buying. They are
striving to limit food waste,
shop more cost consciously and
buy more sustainable options
Growing love for local
The desire to shop local is
reflected in both the products
consumer buy and the way they
shop. Brands will need to
explore ways to connect locally
80%
Of consumers feel more or as
connected to their communities
88%
Of consumers expect these connections
to stay intact post COVID 19

13. 12
This trend is reflected in the types of apps that consumers are downloading, related to
entertainment, news, healthcare and education. Underlying consumer needs (e.g. to connect, to be
entertained, to learn, to be informed) remain the same, yet technology is changing the way it
happens. CPG companies must increase their focus on digital vs. traditional tools to engage with
consumers and improve experiences.
Direct selling major Amway bullish on Digital:
Direct selling major Amway India remained bullish that its digitally focused strategy will help regain
business very close to the pre-Covid level by July and its online share of sales would continue to
remain high at 80 -85 per cent. All training and meetings with the direct sellers have been shifted
online and the company has conducted over 3,041 online training programmes engaging over 4 lakh
Amway Direct Sellers since the lockdown.
Amway said it witnessed excellent traction in certain categories during the lockdown and unlock 1
period, and saw a spike in the sale of immunity supporting SKUs (stock keeping units) by almost three
times, including the herbal range supporting immunity and respiratory health. Pre-empting rise in
demand of immunity and hygiene products, the direct selling major is gearing up to increase the
production of these SKUs by four times in the coming months and maintain the product availability at
95 per cent. The direct selling industry is based on community networking, it will have to overcome
this unexpected impediment like no other industry. There are over five million people employed and
earning livelihoods from this industry in India, and it will be of paramount importance for them to
continue doing so despite the disruption caused by the current pandemic, Amway said.
Here, the direct selling industry, being so inextricably human networking based, can not only reinvent
itself around this new imperative, but also, blaze a trail for others to follow, especially in the
innovative use of technology and human interactions, Amway added.

14. 13
A survey was conducted by floating an Online questionnaire (Ref. Annexure) to gauge the preferences
of customers about the use of health/ wellness supplements and the following insights were obtained:
Demographics:
41%
52%
7%
Female Male Prefer not to reveal
100
62
123 119
0
20
40
60
80
100
120
140
<5 LPA >20 LPA 10 - 20 LPA 5 - 10 LPA
20
3
64 64
16 19
9
88
77
16
2 2
7
14
3
0
20
40
60
80
100
<21 >50 21-30 31-40 41-50 <21 >50 21-30 31-40 41-50 <21 >50 21-30 31-40 41-50
Female Male Prefer not to reveal
PRIMARY RESEARCH
Business / Self-Employed
Student
Working
Professional /
Employed
50%
50%
Metro (Delhi,
Gurugram, Noida,
Bangalore, Mumbai,
Kolkata, Chennai)
Non Metro (Others)
20%
35%
45%
Business / Self-Employed
Student
Working Professional / Employed

15. 14
Motivators/ Inhibitors for Purchase:
- 26% respondents cite ‘Lack of awareness’ as the major reason inhibiting purchase.
- 24% of respondents consume products on alternate days in a week.
% Customers from different Platforms % Purchases for from Platforms
14%
18%
20%
22%
26%
0% 5% 10% 15% 20% 25% 30%
Do not like the taste of health supplements
Scared of the side effects associated
Belief in proper diet and exercise over supplements
Price concerns
Lack of awareness
14%
18%
19%
24%
26%
0% 5% 10% 15% 20% 25% 30%
Once/Day
Twice/Day
Weekly
Alternate Days
Never
6%
2%
56%
36%
Children
Don’t Buy
Self/Spouse
Parents/ Elder
menbers of Family
18%
57%
25%
Direct Selling -
Amway/ Word of
Mouth
Offline Stores -
Medical / Kirana /
Self service store like
Reliance Fresh
Online Stores -
Amazon/ Flipkart

16. 15
Customers on the basis of platforms and income groups:
Key deciding factors for consumers:
- On a scale of (1-10) rate, how willing are you to try health/ wellness supplements for improving your
health post-COVID-19?
Net Promotor Score = -32
- On a scale of (1-10) rate, would you recommend the products to friends/ family post successful results
obtained from using these supplements?
Net Promotor Score = 21
14 13
25 21
66
30
66 64
20 19
31 31
1 3
0
10
20
30
40
50
60
70
<5 LPA >20 LPA 10 - 20
LPA
5 - 10
LPA
<5 LPA >20 LPA 10 - 20
LPA
5 - 10
LPA
<5 LPA >20 LPA 10 - 20
LPA
5 - 10
LPA
10 - 20
LPA
5 - 10
LPA
Direct Selling - Amway/ Word of
Mouth
Offline Stores - Medical / Kirana /
Self service store like Reliance Fresh
Online Stores - Amazon/ Flipkart (blank)
73
74
88
104
152
269
0 50 100 150 200 250 300 350 400 450
Advertisements
Influencer Reports
Celebrity Endorsements
Word Of Mouth
Discounts
Doctor Recommendation
Extremely Important Somewhat Important Not Important

17. 16
Understanding Consumer Behavior towards Health supplements and
Wellness products.
(Kindly fill the survey to help us understand your perceptions about the current market offerings and
knowing the key drivers to better formulate options for a more personalized offering)
ANNEXURE 1: QUESTIONARE
• Age:
* <21
* 21-30
* 31-40
* 41-50
* >50
• Gender:
* Male
* Female
* Prefer not to reveal
• Occupation:
* Student
* Working Professional
* Business/ Self-Employed
* Other
• Location where you reside/work:
* Metro (Delhi, Gurugram, Noida,
Bangalore, Mumbai, Kolkata,
Chennai)
* Non-Metro (Others)
• Annual Income:
* < 5 LPA
* 5-10 LPA
* 10-20 LPA
* > 20 LPA
• Have you ever tried immunity boosters or
health supplements before?
* Yes
* No
* Maybe
• If not, what are the potential reasons behind
not using immunity boosters or health
supplements?
* Lack of awareness
* Scared of the side effects associated
* Belief in proper diet over
supplements
* Price concerns
* Do not like the taste of supplements
• For whom do you generally buy these products?
* Self/ Spouse
* Parents/ Elder Family Members
* Children
* Other
• How many times do you consume these health
supplements/ wellness products?
* Once/ Day
* Twice/ Day
* Alternate Days
* Weekly
* Never
Demographics Current Usage Analysis

18. 17
• How do you purchase your immunity products/ health-wellness supplements?
* Offline Stores – Medical / Kirana / Self-service stores like reliance fresh
* Online Stores – Amazon/ Flipkart
* Direct Selling – Amway/ Word of Mouth
• How Important are the following factors which may alter your buying decisions for selecting/ trying
out a new health supplement?
Not Important Somewhat Important Extremely Important
Word of Mouth O O O
Advertisements O O O
Influencer Reports O O O
Discounts O O O
Doctor Recommendation O O O
Celebrity Endorsements O O O
• On a scale of 1-10 rate how willing are you to try health/ wellness supplements for improving your
health post COVID-19?
1 2 3 4 5 6 7 8 9 10
Will not try. O O O O O O O O O O. Will Definitely try
• On a scale of 1-10 rate, would you recommend the products to friends/ family post successful
results being obtained from these supplements?
1 2 3 4 5 6 7 8 9 10
Will not. O O O O O O O O O O. Will Definitely
Recommend recommend
• Any other thoughts/ apprehensions/ notions?
* _________________________

19. 18
References
i
Dietary Supplements- Riding High on Perceptions and Practices in India DOI: 10.19080/JOJPH.2017.01.555573 |
https://juniperpublishers.com/jojph/pdf/JOJPH.MS.ID.555573.pdf
ii
Dietary Supplements – Wikipedia | https://en.wikipedia.org/wiki/Dietary_supplement
iii
Winds of Change – FICCI – PwC | https://www.pwc.in/assets/pdfs/industries/retail-and-consumer/rc-wellness-
report-20120829.pdf
iv
Why we need food supplements – ToI | https://timesofindia.indiatimes.com/life-style/health-fitness/diet/Why-do-
you-need-food-supplements/articleshow/46297400.cms
v
Italian Consumer Attitudes Toward Products for Well-being: The Functional Foods Market |
https://ageconsearch.umn.edu/record/93349/
vi
Growing market dynamics | https://www.investindia.gov.in/team-india-blogs/growing-nutraceuticals-market-
india#:~:text=The%20nutraceuticals%20market%20in%20India,food%2C%20beverages%20and%20dietary%20supplem
ents
vii
World Food India Report EY & CII |
http://foodprocessingindia.gov.in/publishing/publications/5987ae1cb95a7799a7bahealth-supplements-and-
nutraceuticals.pdf
viii
India’s Nutraceuticals Industry ASSOCHAM- MRSS | http://www.mrssindia.in/uploads/reports/pdf/assocham-
knowledge-report-on-nutracuticals-released-at-3rd-national-symposium-6.pdf
ix
Nutraceuticals market in India Deliotte |
https://www2.deloitte.com/content/dam/Deloitte/in/Documents/consumer-
business/immersion/Nutraceuticals%20market%20in%20India.pdf
x
Dietary Supplements- Riding High on Perceptions and Practices in India DOI: 10.19080/JOJPH.2017.01.555573 |
https://juniperpublishers.com/jojph/pdf/JOJPH.MS.ID.555573.pdf