2020 was definitely a year of health and wellness. We saw that earlier consumers were becoming more conscious about their health and started to take a proactive approach to health and wellness which impacts their lifestyle. The pandemic definitely has become a catalyzer to further accelerate this process. It also made people shift their buying behavior and the way they shop health & wellness related products, said Sergio Rodrigues, Strategy & Business Intelligence Director, Daymon, who was also the moderator for the last webinar session on health & wellness, conducted by CMPL.
This session saw the importance and significance of health & wellness in the current scenario, the products that will be in demand this year and going forward, digital onboarding of vendors, challenges in this segment and much more.
The panelists for this session were Prince Chatterjee; Head – Private Label; Imports & International Brand Alliances; Health & Glow, Saif Ahmad; Associate Director; Grofers, Harsh Pal Singh; Managing Director; Ambe and Sameer Shaikh; Regional Head – Buying & Merchandising; Big Basket.
Products that will be in demand in 2021 & beyond
We have been in the Covid-19 era for about a year and after one year of studying all the conditions and situations throughout the globe, we have come to a conclusion that there are other factors like stress, which are a major concern, expressed Harsh. After the pandemic broke out, immunity was one major concern and it is being addressed globally. Apart from stress & immunity, there are a lot of lifestyle diseases which are coming out of this and it is a major concern in the health care sector.
Harsh feels that Covid-19 has given us an opportunity to rediscover the old good habits which leads to a holistic and healthy life and this is not only for boosting our immunity, but personal hygiene, food habits, living habits and most importantly the value of human beings. During this time opportunities mainly arose in the sports nutrition, weight management and healthy aging segments to keep ourselves fit to live longer and healthily. These are the areas of opportunities that arise from the Covid-19 pandemic. We are now more focused on how to keep our food healthy by making a balance on our food intake in terms of sugar, salt, fat and adding some good ingredients we can take in our food.
General health could continue to become the first easiest and sort after option, according to Prince. We need to keep our immune system fit, so general immunity boosters have a great potential. This also means that there are rob-off effects into other segments, for instance – I could go on to explore how to keep my digestive system better.
In the health and beauty segment, we also find that there is an ease and increase in demand for supplements which help hair regrowth, nail care, skin care etc, said Prince. Covid-19 was a wake-up call. General health will lead from the forefront which will give rob-off effect to many other supporting things which are all opportunities for us as retailers and as manufacturers.
Covid-19 also led us to have a very stressful life because we never knew how to work from home and staying inside the home 24/7 has its own set of problems, affirmed Prince. A lot of people got into depression or some kind of anxiety. So, there can be great opportunities in the mind energizers segment too.
As per Saif, there is a huge demand in the market for healthy, natural, pesticide free products. People always talk about all these products. Everyone who is into health & fitness keeps talking about it. Then Covid-19 happened and alarmed us that everybody should wake-up, it’s high time now and you should look into all these kinds of products. Consumers have now become more conscious about it.
55% consumers are intended to buy more products which enable immunity during these times, informed Saif. Earlier it was doing good and during the pandemic it sky-rocketed. Products which are made up of natural ingredients, supplements of Vitamin D, Omega 3, probiotics are some of the things which are doing well in the market.
How to communicate with consumers?
We have to look into proteins and supplements that could be a part of our daily life but before going to that level, we should eliminate the things which we are having now, said Saif. We are consuming foods which are full of pesticides and insecticides which are very harmful for all of us. The prime thing is avoiding food which is having all these destructing things. Pesticide free products are one of the top consumer demands. A product made of natural ingredients and contains healthy supplements are very much in demand.
Consumers who spend on organic and healthy foods have increased by 46%, informed Saif. In line with these consumer demands, as a company, we have added a complete range of pesticide free grocery. So, we are not only delivering quality food, but we also deliver you the promise of health, safety and happiness. As a responsible organisation, we always try to inform the consumers about the importance of healthy food.
Harsh believes that it is also the responsibility of the manufacturer to add on the information and the safety guidelines. Information like the importance of safety, the number of doses and over doses of the product plays a very important part. Manufacturers like us are the source of this kind of information.
Sharing what Big Basket did, Sameer said, we started sending mails and messages to customers informing them about the range of our immunity boosting products. Earlier, we had about 20-30 products in the immunity booster segment because there wasn’t much demand for it. Post-Covid-19, our range of immunity boosters are about 70-80. All the organic products which we have, we started communicating those to the customers. There was a huge demand in the sections like baked and roasted products in the snack options. We started a lot of new products in that range, which is all baked snacks. We also saw a demand in the immunity boosting powders and we are planning to have few products in that range. Since brown rice is a healthy option, we started making brown rice chips.
Apart from adults, we have a kids section too, informed Sameer. We started creating options for kids’ breakfast, snacks, dinner. We have the entire range showing how much protein, carbohydrates etc. are there in each of the products. Parents can decide according to the age group of their child which product is more beneficial. In beverages, there were options of tulsi juice, aloe vera juice, which was suddenly very much in demand. These are some of the things which we have done looking at the trends of the market.
Prince had a completely different view of all the panellists here. He said, we are still scratching the surface of information relating to these products in India and we have not even come to a position where we can say that we have even started it. There is information, then there is contradictory information. There is a plethora of information available across. Someone will tell you alovera juice is good, someone will tell you it is not so good and then you turn on the television and you will find some yoga gurus telling you that you should have this and that etc. In my view, I don’t think neither the industry nor the retailers have yet begun the work towards disseminating the right information to the consumers. Consumers are basically picking up what they feel is good for them. We haven’t yet started thinking about how this should move, what is good or right information. It is only on the packs right now. Consumers have started lapping up everything because of the panic situation which got created due to Covid-19.
What to look for in a supplier before onboarding?
It is a partnership and a collaborative mutual approach to build a brand, said Saif. While onboarding a new supplier or a partner, we ensure three things – one is the quality, they should not compromise on the quality. Second is quick. The supplier should anticipate and give a quick response to the consumer. The product should be ready on time. Third would be longevity. Success is all about being persistent and doing the right thing for a long time. Longevity with the manufacturer is very important.
Agreeing to Saif, Prince added that the pedigree of the manufacturer is important. The image of the manufacturer, his pedigree, his past performances, brands he has worked for, retailers he has worked with etc. These are important determinants for us to identify if it is a good partnership or not. Second is understanding of what you do, the processes that you follow, the kind of factory and infrastructure you have, maintenance of the infrastructure. Third would be if he is able to see or articulate my vision then I know the match is done.
Sameer was of the opinion that if the thought process doesn’t match with the supplier then it does not go forward as it is not a short-term relationship.
Explaining the process in Big Basket, Sameer said, we had to identify and short list the product and then we had to short list the manufacturer. Short listing and onboarding of the manufacturer was pretty much faster, but short listing of the product was taking time because until and unless the product goes through the entire quality test from our side too, it doesn’t get approved. Initially we used to go to the factories and see the product personally and approve it. Now because of the travel restrictions, the manufacturers have to courier the products to our respective houses. We then go through the products, get the retesting done and eventually we used to sign up the product. So, the launching of the products was getting delayed. The onboard of manufacturers was much faster. We did not onboard any new vendor during the lockdown period because we were focusing more on the current manufacturers which we have as partners and try to onboard them and make new products through them only.
Grofers too did not onboard any new vendor during the lockdown, informed Saif. Our vendors ensured 100% safety, hygiene and their capability of delivering quality products. We have launched some new products, but haven’t changed the vendor set. Technology has helped us in a whole new way like factory visits on live calls, online quick checks, videos etc. These solutions are irreversible. Going forward, these things will be a regular practice and it has speeded the process.
How can manufacturers make the onboarding process quicker?
Manufacturers need to understand the global market, the situation around us and the need of time, said Harsh. Whether it is the manufacturer or the retailer, they are all part of the same ecosystem. If we are already in tune with the ecosystem then we understand what is going on, what is in demand currently and what will be the next requirement. During the pandemic we were not ready to serve that kind of demand. However, we could anticipate that this may happen and we could prepare ourselves accordingly. Definitely the international exposure and what we learn out of that experience help us to serve our customers. At times we contact our customers and discuss the possibility of a new segment or a new product and they might take it up.
Research work to launch private brands
First, we have to anticipate that health and wellness has become the priority and going forward this will be the consumer need, said Saif. So, we started our research with internal and external consumers about their understanding, what they need, how much do they need, what should we do to ensure quality and hygiene for them etc. So, first is how to anticipate the demand. Then we start working towards mapping that demand and go to the supplier who can ensure top quality product with three stage quality checks to keep the goodness of product. There should be transparency. Then the execution starts with procuring, ensuring quality and delivering the promise of health and safety.
Normally when we launch our private label, one of the objectives behind it is to fill the gap, said Sameer. That gap can be in terms of range or the margin cap etc and that is why we launch a private label. In the health & wellness category the objective is more or less the same. If the category itself is niche and very small and even if we take 50% of the buyers, the MOQ will not get matched, then eventually the commercials will not match, and then things will not fall into place. So, how big is the buy and how much share can be taken once you launch your private label and is it feasible. If it is not feasible, and not win-win for both the parties then it doesn’t make sense.
Priorities & challenges
We are already living in a contaminated atmosphere and so the three priorities which we look into is that – one, we should avoid artificial ingredients. Second is the value it should add to the consumer’s life. Thirdly, it should be approachable to the consumer, asserted Saif.
In terms of challenges, the first one is the product aesthetics. It has been changed. Once you get into a health and wellness portfolio and you start using natural products, so aesthetics of the products changes like toothpaste has become brown. Second is quicker results. Everyone wants white teeth. If you add bleach in that, it may give you results in a week’s time. But once you remove the chemicals and add on the natural ingredients, the results might get slow, but will be beneficial in the long run. Third would be pricing. Health & wellness products are perceived as expensive products. But actually, the value of money is very high. You may get quality products with a very small increase in money. Initially it will look like an expensive product, but once you start using it, it will be a very small amount that you are seeding into the product, out of which you will get a good value, stated Saif.
For Prince, the final output is the main priority. With the entire exercise that we do, all the factory audits and everything and see if I will buy the final product. The three big challenges that I see – one is what I create. Is it efficacious enough or not, does it meet my consumer’s needs? Number two is can I do it consistently and continuously? Third is the information part of it. We are all here to give our consumers the right information. How does the consumer really make a choice? These are the three challenges we need to work on.
The value addition to the product is very important, only then it will be accepted in the market. Then making the product which is acceptable and adoptable by mass consumers, said Harsh.
Speaking about his past experience, Sameer said, a brand came to us saying that their product is organic. I saw all the ingredients used in it and asked them, do they have the organic certificate for all the ingredients. They had for a few but not for all. If you don’t have certificates for all the ingredients then you cannot call it an organic product. Terming a product organic has its own merits but it has a lot of certifications. Every time you are sourcing a new ingredient or the same ingredient from multiple sources, you need to have the certifications from all those sources. Only then the final product can be termed as organic. Things are changing, people want preservative free and organic products, but it has its own time to source it and get the certifications and then launch it. That takes time and is one of the big challenges we face.