Market structure analysis of health and wellness food products in India

Abstract

Purpose – The purpose of this paper is to analyze the market structure and level of competition in health and wellness food products by type, category, prime positioning and distribution networks in India. Design/methodology/approach – The study is conducted using secondary data from Euromonitor International. Compound Annual Growth Rate (CAGR) has been calculated for analyzing the market trends in terms of type, category and prime positioning and market competition has been analyzed using Herfindahl-Hirschman Index (HHI). Analysis of variance has been used for analyzing the statistical difference in market competition. Findings – Consumer purchase behavior for food is significantly changing across the world and consumers are becoming increasingly conscious of the health enhancing properties of food. With growing incidences of problems like obesity, diabetes, coronary heart diseases and foodborne diseases, consumers are becoming aware of the role of food in ensuring health and well-being. There have been significant structural changes in the health and wellness food market compositions and India has huge market potential for health and wellness food products with a market size of Rs. 435 billion in 2013 and growing at a significantly high annual growth rate of about 13.8 percent during 2002-2013. HHI results clearly indicate that there is significant competition in the health and wellness food market with average HHI of 0.19. However, the structure of market competition shows a varied trend across the types, categories, prime-positioning and distribution channels of health and wellness food products. Practical implications – Results of the study provide a better understanding of temporal as well as intra-category changes in market size of health and wellness food products and the competitiveness of the health and wellness food market, providing valuable insights to the companies involved in producing and marketing of health and wellness food products in India. Originality/value – Health and wellness food market is an emerging area for the marketer and there are limited analysis on market structure and competition.