With the rise in awareness about healthy eating, post the pandemic, companies such as Swiggy and BigBasket are looking at venturing into the heavy-duty nutraceutical segment by means of acquisitions and independent product launches.
While Swiggy has been in talks with multiple companies for potential acquisitions, BigBasket is experimenting with a private label portfolio of nutraceutical products, according to sources privy to the development.
Restaurant aggregator and Swiggy's rival Zomato is also learnt to be venturing into the space. Gaurav Gupta, Chief Operating Officer for five years at Zomato, will be looking at this division, he told the company's employees in an internal email. There is no immediate clarity on how Zomato plans to hit this segment.
BigBasket response is awaited. Swiggy did not respond to queries from Moneycontrol.
What is the nutraceutical segment?
Nutraceuticals are defined as any food-related product which provides medical or health benefit. This could range from food to beverages or even tablets with a claim of prevention or cure of chronic diseases. Following the onslaught of COVID-19, there has been a gradual rise in the adoption of health food among an average Indian.
Nutraceuticals come a step ahead of food items individuals can include in their daily lives, with an aim to boost their immunity to ward off the virus, along with other diseases.
Given the situation, the nutraceuticals market in India is expected to grow to $20 billion by 2023 from $9 billion in 2019, according to analysts working in this segment.
Grabbing the pie
Indeed, the market is gaining traction every passing day and every emerging business, including Swiggy and Big Basket, is trying to grab a pie of the burgeoning market.
Swiggy, for instance, was in talks with natural and ayurvedic beverages maker Auric for an acquisition till a few months ago. Even as that deal did not go through, Swiggy is leant to be in talks with multiple other companies, according to one of the sources quoted above.
Testing the waters
Swiggy has also prototyped the healthy food format with a partnership with health food food outlet OliveU.Fit. The aim is to test the waters for such items in select areas of Bengaluru.
OliveU.Fit sells nutritional food -- for instance, a pizza omelette with a claim that it helps build muscles, or a honey citrus salad as an immunity booster. It is a third-party restaurant which sells only on Swiggy.
Big Basket, on the other hand, is very active and working aggressively in that area. They are launching vegan protein drinks, gummies and nutritional bars under their private label portfolio. These bars, for instance, can be consumed for endurance or protein supplement.
The business for both Swiggy and Zomato had taken a backseat following the pandemic and a successive lockdown. The order volume shrunk sharply, which also led to mass layoffs across the two players. Even as the two companies have now started to claim that the business is getting back on track, such a diversification will potentially offer them more certainty in the current times than what they get purely from the food business.