"Organic" and "Digital" combine to shake up FMCG and pharma

13 Dec 16 "Organic" and "Digital" combine to shake up FMCG and pharma

In the past decade, we’ve seen dramatic growth in “natural” or “herbal” products across the world. These products have penetrated several different markets such as functional foods (nutraceuticals), cosmetics, dietary supplements, and medicines. In most product categories, such “organic” products are growing much faster than traditional products – in practically every country or market.

FMCG and PharmaThis has been driven by the convergence of several factors that include:

  • Dis-satisfaction with conventional medicines
  • Rising preference for “natural” or “organic” products
  • High costs (including waiting time) of conventional treatment
  • Increasing emphasis on healthy eating and fitness, as well as preventive healthcare
  • Increased availability of such products in OTC channels

 

This is not a new phenomenon, but the Internet and mobile are creating huge tail winds, that could transform this trend into a wave.

Essentially, consumers all across the world now have access to huge quantities of information, on every ailment, every treatment, every beauty cream, every health food; and hundreds of user opinions on each of them. People today know all about turmeric, echinacea, gingko biloba, ginseng… and many other such exotic herbs. If you want to research the side effects of a drug – just “google” it. If you need to know what to eat to mitigate (or aggravate) a certain condition – you will find it on the web. What food is healthy/not? Everything and anything you need to know (or so we think!) is accessible on our fingertips.  This has encouraged many to do their own research and self-medicate. With the explosion of mobile Internet, the number of such consumers will only grow.

Equally, consumers are finding specialists and consultants online, and making judgments on their skill/knowledge via social media and the quality of content they put out. This is dramatically changing the equation between the patient and the doctor.  I now don’t have to depend on my neighbourhood or NHS doctor – but can go online and find the kind of person I’m looking for – whether they’re ayurvedic specialists in California, homoeopaths in Africa, or Chinese medicine experts in Germany.

This is a huge shift. Now it’s not Unilever or Glaxo or L’oreal (or the doctor!) telling you what’s good for your health or complexion or hair…. It’s an “expert” you have faith in, or believe in, and accessible with a few clicks.

Add to this, ease of purchase (both of advice as well as products) online – and this is going to take off. It’s already evident in the surging growth of new categories and players, such as Patanjali in India, Pukka Herbs and Evolution Foods in the UK, True Organic in Sweden, amongst many others. In fact, the high growth is attracting literally hundreds of new entrants all over the world.

Of course, there are risks – not least the danger from spurious or harmful ingredients. Regulation will eventually catch up, but there’s no doubt that the world of FMCG and pharmaceuticals has changed dramatically, as thousands of new players (and products) enter the marketplace – and consumers become more aware and willing to find their own solutions.

Arun Jethmalani
Arun Jethmalani

Arun is one of the founders of ValueNotes. Apart from trying to build a high-quality research business, he has spent the last 27 years researching, analyzing, and dissecting companies and industries. He has worked with clients of all shapes and sizes, from all parts of the world – in providing them insights that make a difference to their business.

Prior to ValueNotes, he was an equity analyst/advisor, and wrote extensively on investing – including a column titled “Value for Money” which ran for 10 years in the Sunday edition of the Economic Times. To this day, he remains an avid “value” investor.
He has also been published in several other publications, and is a regular speaker at events related to technology, investing, competitive intelligence, business process management, Internet, etc. See: Valuenotes Events
He has been instrumental in developing a community of research and intelligence professionals in India, and is the founder and current chairman of the SCIP (India) Chapter.
Arun holds a B Tech from IIT, Bombay and an MS from Duke University, NC, USA.
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