INDIA: Highway To Health

Highway to Health By Preethi Chamikutty & Ravi Balakrishnan, Times News Network MUMBAI (The Economic Times - Brand Equity), October 10, 2007: While clichés like ‘Health is Wealth’ was something we’ve all grown up with, health as talking point was — truth be told — rather boring through the latter half of the 20th century. It was the preserve of hypochondriacs and grandmothers; most people took health for granted, pausing to think only if friends or family quite literally dropped dead. But the focus over the last decade or so has moved beyond prose and transcends forms, medium and opportunity. Markets across the globe are filled with products that would have seemed improbable — like a chewing gum that fights diabetes — or downright surreal — a soft drink like Coca-Cola’s Enviga which claims to burn and not add to calories. Categories that had nothing to do with health, other than possibly contributing to its erosion, like video game consoles and TV sets, are all touting a wellness-related benefit today. The market is exploding, and advertisers and marketers are frequently hard pressed to pin it down to a figure, because it’s become so all-encompassing. According to a KSA Technopak report, the Indian health and wellness services market is in excess of Rs 3,500 crore, growing at 40% CAGR. This sudden concern for consumer wellbeing is not because companies discovered an altruistic side to business. In many cases, it’s driven by explicit demands from consumers who have undergone a sea change in attitudes. According to Dave McCaughan, director of strategic planning, McCann Erickson, Japan, “The first factor is a continuous global boom. When people make money, they tend to start thinking about less urgent stuff.” Adds Jagdeep Kapoor, CMD, Samsika, “People in developed markets realise they can enjoy material goods only if they live long and well. In our case, the lack of sensitivity to health was not because we were distracted by luxuries, but because we were distracted by necessities. But both markets are now aware of the need.” A lot of the action today is a direct backlash against trends from decades ago. Says Ann Mack, director of trendspotting, JWT: “In developed markets, people used to be more concerned about convenience, drawn to products that were easy to prepare and cook. Now there is an overwhelming concern for nutrition.” The so-called ‘young emperor’ syndrome in China — parents pampering their children without restraint — brought in its wake an epidemic of teenage diabetes, to the point where the government is encouraging marketers to speak about a healthy diet. The elderly no longer consider each year lived a milestone — what they are gunning for, according to McCaughan is “the ability to either prevent ageing or to maintain youth”. In Western markets, especially, the media has demystified health to a great extent. Once an esoteric preserve of medicine men, the sheer amount of casual knowledge that many of the more advanced consumers posses is staggering. McCaughan says, “People all over the world are questioning old rituals of medicine. Today, in the West, if you are 30 years of age, you’ve been watching medical drama shows for a large part of your life.” A survey early this decade revealed that 70% of people could describe a tracheotomy; a procedure they’d been watching on these shows. “Most suburban doctors would not have known that 30 years ago,” he says. Consumers are well informed about various maladies they are likely to be afflicted by — coronary heart disease, hypertension and trans fats weave their way into conversations with disturbing frequency. According to Saugata Gupta, head – marketing, Marico, “A certain section has adopted a healthier lifestyle, and another is aware of the risks but is doing nothing about it. There are also economic implications to being healthy, since the cost of good medical care has escalated.” The trend towards a healthier lifestyle among the younger segment is spurred by the media’s near obsessive focus on ‘looking good’, a change from earlier days where at least in India, a large belly was a sign of prosperity. Sandeep Ahuja, director, VLCC Healthcare, says, “Bollywood is a great indicator — in the 60s, the concept of a healthy hero was someone like Sanjeev Kumar who was fit; but today a health icon is Shahrukh Khan or Salman Khan, who have a great physique.” It’s a concern that makes people more tentative even in their youthful hedonism. Kapoor believes less time is spent in the ‘looking out’ life stage, where people, freed from parental restraints wanted to have a good time with scant regard for consequences: “Previously this went on till 40 to 45 years. But now in India, in some cases, even teenagers have gone through ‘looking out’ and are back to looking after themselves.” Underpinning this wide gamut of health related needs is a desire among many consumers not to spend too much time or effort securing a better, safer lifestyle. Shripad Nadkarni, founder, MarketGate, observes, “the lazy way to health is going to be a trend.” Health has acquired aspirational connotations, with expensive club memberships being as much a status symbol as an exercise option. McCaughan outlines the consumer mindset: “People buy macrobiotic diets and have chewing gum with Xylose not because they are health nuts. Health and wellness have to do with a mental state. People may join a gym thinking they are going to get fitter and stronger, but just the act of signing up makes them feel good. They imagine, ‘I will make the effort in the future.’” A similar thought process drives what Richa Arora, general manager – marketing, Britannia, calls “passive health seekers who do little things to make a difference”. This could be as basic as opting for baked instead of fried snacks or sugar free products. There’s been a rapid erosion of the mindset that health comes at a price — whether in terms of physical exertion or via a compromise in taste when it comes to food. According to Gupta, “The basic barrier in India is eating habits. A successful programme has to dovetail into existing preferences.” Arora adds, “You have to maintain a certain taste-profile for even health food. The lines between ‘good food’ and food that’s good for you are blurring.” The focus has also shifted from curatives to prevention, and marketers traditionally in the health space have a headstart on reaping benefits. VS Sitaram, ED, consumer care division, Dabur, says, “A strong base of customers in the upper SECs and large towns do not want sickness solutions. They adopt our products and believe in Ayurveda as a reliable route to stay fit.” Slim is Nestle’s buzzword of choice for its range which includes Slim Milk, Fresh ‘n’ Natural Slim Dahi, and EveryDay Slim, healthier versions of regular products. Mayank Trivedi, GM – shelf stable & chilled dairy, Nestle, says, “Health has always been in Nestle’s DNA, but it’s only now that the consumer has become conscious of the food he eats.” It is even attempting to make the more snack-oriented part of its portfolio healthier, with Maggi Atta Noodles. Dabur Honey’s ‘Cheeni Ko Dakha Maar’ campaign saw the brand grow at 20% compared to the sluggish 5% to 6% that it was clocking a few years ago. And realising the portfolio needed more than legacy products, the company got into juice, and then into sugar-free variants like Real Activ. Sanjay Sharma, GM – sales & marketing, Dabur Foods, says, “Indian lifestyle is undergoing changes; consumers look at options to compensate the lack of nutrition and exercise.” Dabur also recently launched Twist, targeted at teenagers looking at a healthier alternative to cola. In fact, the cola controversies have helped the brand and the category grow at a CAGR of 35% over the last five years. Marico is focusing on building Saffola, a product that Gupta admits has increased in relevance over the years: “It has moved from a therapeutic to a preventive space. The brand and its extensions are going to piggyback on the global trend towards health. The Saffola Atta Mix is not a part of the monthly shopping basket for food, but is developing a stable base.” Some marketers are also getting careful about how they phrase health benefits. According to Arora, Britannia chose to replace the popular buzzword ‘sugar free’ with ‘zero added sugar’ as the natural ingredients in biscuits contain their own sugar. “As consumer consciousness increases, giving relevant information helps make more informed choices.” Few categories have been able to resist the lure of a healthier option. According to Kapoor, “Competing products took away shares and often the difference was the health component.” Durables have seen an unprecedented number of healthy options manifesting. ‘Frost-free’ and ‘energy-saving’ are passé. Samsung’s ACs have Bio Health Plus, which helps circulate pure air; LG’s Intello Air ACs are equipped with Plasma Pure Filter, which kills bacteria. And LG refrigerators have Green Ion Door Cooling technology which helps food remain fresh. It all started nearly a decade ago, when LG launched televisions with Golden Eye technology that claimed to offer strain-free viewing. According to Moon Bum Shin, MD, LGEIL: “Health is not an agenda for a company but something that is for the world to work towards in general. Customers today know about recycling, protecting the environment and beyond features, will pick products from companies who look at these issues.” Ravinder Zutshi, deputy MD, Samsung India, adds, “Healthy products are not a marketing strategy.” Perhaps the most seriously affected, though, are marketers whose products were perceived to be unhealthy. Between lawsuits and uncomplimentary documentaries like Supersize Me, McDonald’s was placed front and centre of the obesity epidemic. For fast-food chains, snack and CSD manufacturers, it’s been a time for introspection, a time to get back to the drawing board. Nadkarni has an interesting perspective: “For McDonald’s the backlash subsided when it introduced salads and sandwiches. It was targeted because it stocked only junk food. Brands will need to come up with a portfolio that protects the corporation.” Pepsi has been placing its bets on the Rs 1,200 crore fruit juice and juice-based drinks market. Sucheta Govil, ED – innovation, Pepsi India, says, “Tropicana’s growth has been faster than the category, and one of the key factors is increasing consumer consciousness about health and wellness.” Apart from Tropicana, Gatorade is another offering in the health category. Though not targeted at the mass market, it helped build a segment currently nascent in India. That said, Govil doesn’t think fruit juices are a threat to colas. “Carbonated beverages are and will be popular. It’s our endeavour to provide a wide array of beverages to help fulfill the need states of today’s consumers.” Frito-Lay, which has Lays, Kurkure, Cheetos and Uncle Chipps, is also humming the health tune. Deepika Warrier, marketing director, Frito-Lay, says, “Globally, PepsiCo’s strategy is about moving products from being ‘treat’ products to ‘better for health’ and ultimately ‘good for health’ products.” Frito-Lay is set to unveil its new campaign which discusses these benefits under the Snack Smart initiative. Also in the market is Quaker Oats breakfast cereal, which Warrier says, is high in soluble fibre and helps reduce cholesterol. Globally, health-oriented products are also among the more profitable. Mack cites Datamonitor figures which say the global organic food market grew by 14% in 2006, with a value of at least $36.7 billion. It estimates that by 2011, this market will have a value of $67.1 billion. McCaughan says that while statistics vary from country to country, almost 35% of housewives are willing to pay a premium of 5% to 10% on most goods for health benefits. In India, however, while the health category has been growing, profitability is still a good way off. According to Gupta, “We are not able to get scale or charge a premium. Without scale, the cost base is high. But we have to keep at it. Market penetration is low and environmental factors are favourable.” He believes it’s likely to be a long haul — three to five years. Bum Shin agrees: “Although the returns are small at this point and the inputs very high, we will do this on a continuous basis. If we fail to innovate and offer customer a choice, we will fade out.” Copyright © 2007 Times Internet Limited.