Amway, Dabur to sweat it out over vitamins, dietary supplements

With an increasing number of consumers becoming health conscious, sales of vitamin and dietary supplements in India are expected to grow 33 per cent to over Rs 3,400 crore by 2013. Players like Amway, Dabur, Heinz India, Ranbaxy and Pfizer are expected to slug it out for a share of the market.

A report by market research firm Euromonitor has stated that the Indian vitamin and dietary supplements market is witnessing competition between direct sales player, Amway, and fast moving consumer goods player, Dabur. Amway has cornered 16.9 per cent market share, while Dabur takes 11.8 per cent, followed by Heinz India in the third spot. Ranbaxy Laboratories and Pfizer both corner 4.6 per cent share, states the report.

“Growth will be driven mainly by urban consumers, who are becoming increasingly aware of health needs. More stressful lifestyle, pollution and digestive complains will further contribute to growth,” the report added.

Companies confirmed plans to tap this market by either foraying into this area or introducing more products in this category, backed by strong distribution and supply chain strategies.

Deepali Shukla, assitant vice-president, marketing, & National Head for Wellness, Amway India Enterprises, said: “Nutrilite, globally, is a brand worth more than $3.8 billion. In India, it is worth Rs 600 crore, growing at 20 per cent. This year, we intend to launch close to five products, like foundation nutrition, lifestyle speciality products, among others.”

In India, Amway has introduced around 26 products. “Products in India are tweaked to suit Indian requirements. While the raw materials are imported from the US, manufacturing is done at the Baddi plant in India including tableting and packaging,” Shukla added.

Swedish cosmetics major Oriflame plans to introduce its wellness products like protein shakes in India this year. “We will launch wellness products in India this year. We will import these products from China and Sweden initially. We have launched these products in Europe. The range includes vitamins, food supplements, and also anti-oxidants for smooth skin, etc,” said Magnus Brannstrom, managing director and CEO, Oriflame.

“We will invest Rs 100 crore in two years for our geographic expansion,” said Sandeep Ahuja, managing director, VLCC.

“We are introducing a new service called the nutri-diet clinic in India, where we will offer a health regime based on nutrition and food. We will be give diet charts, depending on the medical conditions of our customer,” Ahuja said.

Emami plans to launch a range of over-the-counter (OTC) drugs for stress relief, diabetes and blood pressure this fiscal. “In the next few years, Emami foresees a potential in the OTC consumer healthcare segment as the ‘wellness’ trend is expected to grow in India. There is a great deal of potential in the OTC market, which we plan to explore,” said Aditya Agarwal, director, Emami Group.

Dabur, with its OTC drugs, began to gain the third place in 2006. The company benefited from a strong ayurvedic tradition and stepped up its advertising and new product development in 2006 in order to regain lost share.

Growing the top line will not be easy this year

Dabur India has new growth strategies across its core FMCG and retail business segments. It will also make an open offer to Fem Care shareholders next week, CEO Sunil Duggal tells Pharmaceutical News Live

How do you see your company in FY10?

We have registered a top line growth of around 20 per cent and a revenue growth of 31 per cent in a fairly difficult environment, so the revenue stream is intact and profit expansion is happening on the back of softer raw material prices. This financial year will not be easy, mainly due to lack of pricing opportunities.Still, if volume growth remains robust, profit expansion will be good.

We plan to plough back into advertising and marketing promotions. There will be much investment on products and expansion.

What are your plans for H&B stores, the retail venture?

The retail outlook remains murky, given the lack of clarity in the realty sector. We are rejigging to a revenue-sharing model; instead of rent, we will give a percentage, maybe 10-12 per cent, revenue to the landlord. The retail venture’s losses will be half of last year’s; Q4 losses were only Rs 2.5 crore, against Rs 17 crore for the year. We are proceeding slowly.

What about your consolidation plans for Fem Care?

The open offer will be lauched next week and a 15-day window will close around 17-18 May. It should be a subsidiary of Dabur by mid-June.

What about expansion plans domestically?

Two new units, one each in Himachal and Uttarakhand. The Baddi (Himachal) plant will be the largest under one roof. Uttarakhand will be more of an expansion of the facility. The units will be commissioned by the end of the fiscal year.

What’s your international business strategy?

Earlier, this business would pull our margins down, but not now. We have built strong capabilities to tap emerging opportunities. The company invested aggressively in brand building in the Arabic-speaking region, building demand even in a difficult terrain such as Algeria. At Dabur, we first set up distribution and then build on demand.

Next year, growth won’t come from the core Gulf market but from new ones where we are investing. Dabur Egypt had over 108 per cent growth this quarter. The facility there is running at full capacity. Our UAE plant, started last year, is running at full capacity. We are looking at East Africa, then at West and South Africa.

You revamped the sales structure.

The personal care portfolio is highly complex, with diverse stock-keeping units and products, so we split consumer care into two areas.The sales structure has been divided into independent units for foods, home and personal care and healthcare categories.

Are you planning any additions in products?

The focus will be more on health and personal care and our fruit drink venture. In foods, we may not go beyond beverages this year. An ayurvedic beauty care product will be test-launched in 

Q3. We now operate the skin care vertical under three core categories.

You said you’ll invest a lot in ads and marketing.

If raw material prices continue to be soft and since growth was volume-driven, there isn’t pressure on prices. Since pressure on margins is less, it is prudent to invest in brands.