“In the 1990s, we identified the opportunity in the nutraceutical space, primarily because of the large imports of whey protein. A decade later, protein supplements became one of the fastest growing industries in India.”
Could you start with a brief overview of the company and the opportunity you observed in the market that led to Akola Chemicals inception in 1981?
Akola Chemicals started as a contract supplier to a very large agriculture company called Rallis, and it used to make hydrolysed proteins for the agriculture application. In the 1990s, we identified the opportunity in the nutraceutical space, primarily because of the large imports of whey protein. A decade later, protein supplements became one of the fastest growing industries in India. Akola Chemicals refocused from supplying hydrolysed protein solely to the agriculture industry to meeting the needs of the animal feed, food and nutraceutical industries. The largest proportion of Akola Chemicals business today is food supplements, used mainly by sportsmen, athletes and those who need to gain mass. More than 60% of Akola’s production is in the nutraceutical area.
Some figures indicate that the nutraceutical industry will grow at a rate of 25% year-on-year. What do you see as the main trends driving this trajectory?
The nutraceuticals sector is easily going to grow by 25%. Various lifestyle changes, together with the rise in the number of gyms, are strong indicators. Keeping fit has become a very conscious part of people’s lives, and supplements are part of this trend.
Could you walk us through the range of products on offer and how Akola Chemicals caters to different demographic segments?
We offer two classes of products. The first is our products based on gelatine, which is the source for collagen, a hydrolysed protein with the widest range of uses, as well as the largest number of amino acids. However, there are people who are not happy with the fact that gelatine is of animal origin. In response, we have products that are sourced from rice and soya and therefore vegetarian friendly. We hydrolyse all of them to make amino acids, and hydrolysed protein is the final product.
There are formulas designed for different types of applications; for example, Ako Pro has very high protein content made for body builders, whilst other products are for elderly people who struggle with digestion. The hydrolysis process makes the protein easier for the body to absorb.
How has the perception of nutraceuticals evolved in India?
Nutraceuticals have developed as a separate entity and become a standalone product, as opposed to an extension of a pill. A pill is for curing illnesses, whereas nutraceuticals are consumed by healthy people. The perception that one can live longer with proper nutrition has taken over, and nutraceuticals are connected to anti-ageing and living a longer, healthier life. As a result, the number of marketing companies in the field is increasing significantly, and many manufacturers of food products are expanding into nutraceuticals.
Can you elaborate on the challenges you encounter as manufacturers in this sector?
The main challenge for nutraceuticals is sourcing raw materials. Collagen is facing serious problems because of restrictions of all types, and furthermore, the price of raw materials has increased by at least 40%. There are political reasons underpinning these factors.
On the other hand, the prices of the other raw materials like rice and soya are quite steady. The ability to make these into a high-protein product is not as easy as compared to collagen, and the effectiveness is lower. However, the enhanced acceptability of the product as vegetarian friendly makes it attractive. The demand both domestically and abroad is growing and will make it the choice ingredient for supplements in the future.
Akola Chemicals has a strong position in the market. How do you maintain this stance ahead of your competitors?
We are first in the market with new hydrolysed proteins, and in some products we are still exclusive; for example, we are leaders in Amla and silk proteins. In Keratin we are unique with our costs. As a specialist company, we do not have the volume of the large companies, but in some products, we do enjoy a monopoly. Unless something dramatic happens, we will continue to grow, underlined by particularly good results last year.