FMCG’s Shortcut To Nutraceuticals

Why India's FMCG Majors Are Buying Their Way Into Nutraceuticals 

By Pritha Pahari

What?

India's largest consumer goods companies are acquiring nutraceutical brands instead of building their own. In June, Honasa Consumer bought a 58% stake in Fluence Pharma, a dermatology-led hair and skin supplements company, for about Rs 135 crore, with plans to acquire the rest over five to seven years.

Earlier this year, Hindustan Unilever bought the remaining 49% of OZiva for Rs 824 crore, and Marico picked up a majority stake in plant protein brand Cosmix.

USV Pharma has invested in Wellbeing Nutrition, and L'Oréal is in talks to acquire Innovist. India's nutraceutical market is worth about $30 billion and is expected to cross $55 billion by 2030, growing at roughly 10.5% annually. Functional foods and beverages, including protein products, make up close to 70% of the market.

Why?

Building a nutraceutical brand from scratch takes years of product development, consumer education and trust-building, according to Renu Bisht of Commercify360 and DatumIntell. Large companies typically only enter a category once they can see a path to a business worth at least Rs 1,000 crore, and by then a D2C brand has usually already reached meaningful scale on its own.

Buying that brand is faster than replicating it. As Bisht put it, "Give them one product, and they'll get it into ten lakh stores in a day." FMCG companies bring distribution, offline retail relationships, modern trade and quick commerce that most D2C nutrition brands lack.

Pharma companies have been slower to move because nutraceuticals often require separate manufacturing lines and regulatory processes that don't fit their existing operations, so they tend to expand only into categories close to what they already make.

What Next?

Early results are mixed. OZiva's revenue grew to around Rs 480 crore by 2025, growing about 130% annually, which led to HUL's full buyout. Marico's digital-first portfolio, including Plix, True Elements, Beardo and Just Herbs, is approaching Rs 900 crore in combined revenue.

Fluence, by contrast, is a smaller, credibility-led business built through dermatologist recommendations, and Honasa's challenge will be scaling it without damaging that trust. Emami's acquisition of The Man's Company, which later slipped into losses, shows how that can go wrong.

Experts expect FMCG companies to keep waiting for D2C brands to prove demand before acquiring them and applying national distribution, rather than trying to build new categories internally. As consumer expert Rohit Bhatiani said, "I don't think this is a passing trend. I think big FMCG companies are investing in the future."

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Rs 28.4

That was the cost of a home-cooked vegetarian thali in June, up 5% year-on-year, according to Crisil Intelligence's monthly food plate cost indicator. Elevated prices of tomato, onion, vegetable oil and LPG kept costs high, despite a decline in potato prices.

The Lead: Tomato prices surged 31% on-year to Rs 42 per kg, driven by delayed and lower summer crop planting amid high February-March temperatures. Onion prices rose 2% as costlier stored rabi stocks entered the market, while vegetable oil and LPG cylinder prices climbed 10% each due to supply disruptions from the West Asia conflict.

Flashpoint: A non-vegetarian thali cost Rs 58.2, up 6% on-year, driven by a 7% rise in broiler prices, roughly half the total cost, as extreme summer heat raised bird mortality, slowed weight gain and discouraged fresh chick placements.

India Seeks Safe Tanker Passage

India is seeking safe passage for nine tankers stranded in the Persian Gulf and is considering talks with Iran, as renewed attacks threaten the fragile ceasefire in West Asia, Bloomberg reported.

New Delhi is also contacting Iranian authorities over the safety of Indian seafarers, after several were killed in June strikes. At least one supertanker reversed course near Oman on Wednesday despite some vessels continuing to transit.

Overview: The tensions stem from US president Donald Trump declaring the US-Iran interim ceasefire "over" after Iran struck US bases in Bahrain and Kuwait and downed a US drone, retaliating for American strikes on Iranian targets.

Trump called Iran's leaders "sick people" and dismissed further talks, though he did not repeat this at the NATO summit itself, Reuters reported. He also reportedly threatened to strike Iran's civilian infrastructure and seize Kharg Island, home to key oil facilities, sharply raising the stakes of the conflict.

Catch Up Quick: The renewed hostilities rattled markets, as Brent crude jumped over 5% to around $78.48 a barrel, its highest since June 22, while bond markets tumbled on inflation fears.

War Echoes, Benchmarks Tumble

The Nifty50 slid 2.12% to 23,882.05, and the Sensex dropped 2.15% to 76,503.6, their biggest one-day loss in three months, after Trump remarked on Iran at the NATO summit in Ankara, Turkey. The Indian rupee also dropped 0.62% to 95.5550 against the dollar. 

Context: Trump’s statement reignited fears of a wider conflict in the Middle East, sending crude oil prices higher and weighing on investor sentiment. As oil climbed, global equity markets also fell, with investors moving away from riskier assets.

Critical Moment: The sell-off interrupted what had been a steady recovery for Indian equities in recent weeks. The decline also underscored India's vulnerability to rising oil prices. As the world's third-largest crude importer, India faces the prospect of higher import bills, stickier inflation, and pressure on corporate earnings whenever geopolitical tensions push up energy costs.

Blue Tokai Eyes 800 Stores

Specialty coffee chain Blue Tokai plans to more than triple its store count from 240 to 800 by fiscal year 2030, opening around 120 stores this year alone, as it bets on India's underpenetrated café market, Bloomberg reported.

By the Numbers: Blue Tokai expects revenue to grow over 50% to Rs 8 billion ($93.9 million) this financial year, after a near sevenfold surge over the past four years.

The chain, backed by Verlinvest, is expanding into newer cities including Ahmedabad and Lucknow, plans to open its first international store in Dubai next week, and eyes an IPO within five to seven years. It expects to turn profitable by March 2028.

India's café market, valued at $425 million in 2025, is projected to grow to $1.15 billion by 2034, per IMARC Group.

The Shift: Blue Tokai's growth contrasts with Starbucks India's more cautious pace. Tata Starbucks operates over 500 stores but posted a net loss of Rs 135.7 crore on revenue of Rs 1,277 crore in FY25, with losses widening from Rs 82.16 crore the previous year.

It has also tempered its store addition pace, opening 58 net new stores in FY25, down from earlier targets, amid high operating costs and rising competition from domestic chains.

Semaglutide Loses Steam

Indian sales of generic weight-loss drug semaglutide lost momentum just months after a strong launch, suggesting the market may be settling after an initial rush.

By the Numbers: Sales jumped 58.4% in April after multiple Indian drugmakers launched cheaper versions following the drug's patent expiry. But growth slowed to 12.1% in May and 2.3% in June, according to Pharmarack data cited by Bloomberg.

Origin: Analysts said early demand came from patients who had delayed treatment until prices fell. Now, high out-of-pocket costs, long-term treatment needs and patient drop-offs appear to be weighing on demand.

"All eligible patients have been onboarded on to this drug, and fewer newer patients are starting this therapy," Sheetal Sapale, vice-president, commercial at Pharmarack, told Bloomberg.

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Markets Recalculate Impact As Trump Signals End Of Truce

On Episode 922 of The Core Report, financial journalist Govindraj Ethiraj talks to Raja Lahiri, Partner at Grant Thornton Bharat, as well as Nicolas Ziv, Lead Specialist, Transport Sector Resilience at Coalition for Disaster Resilience Infrastructure (CDRI).

• Markets Recalculate Impact As Trump Signals End Of Truce

• The RBI Wants A Cryptocurrency Policy That Leans Towards Prohibition

• It’s Pharmaceuticals And Cricket All The Way In The Mega Deals Of The Last Quarter

• The Growing Importance Of Disaster Resilience In General And The Importance Of Airports In Specific

• DeepSeek Wants To Build Its Own Chip