The COVID-19 pandemic has triggered a new consumer trend in health and wellness. The last few months have seen consumers taking a more proactive approach to healthier eating and exercising more for maintaining health and immune resiliency. In just one year, there has been a significant shift towards searches on products and ingredients to boost people’s immune systems. Undoubtedly, the COVID-19 pandemic has accelerated this. Google Trends data also shows an approximate 500 percent increase in searches for immunity in food and drink worldwide, following the onset of COVID-19. This growing trend has further reinforced the already growing market for natural ingredients and immune-boosting wellness products.
By seeing the growing demand and market size, people might consider that the prices of these immunity-boosting goods must be high, and their demand will start falling when their price increases. Because the law of demand in economics states that quantity purchased varies inversely with price, i.e., the higher the price, the lower the quantity demanded and lower the price, the higher will be the quantity demanded. However, this law is not applicable for immunity-boosting goods as these are necessary for the current situation. Even if the prices of these goods increase, the demand may not be impacted. Instead, consumer would purchase them even if the prices of these goods increase – by reducing the purchases of comforts and luxuries.
We can consider this kind of demand of immunity-boosting goods as a highly inelastic demand or a perfectly inelastic demand. The immunity-boosting goods have become a necessity to reduce our likelihood of getting infected with the coronavirus. Highly inelastic demand means that there will be a relative change in the quantity which will be less than the relative change in its price. For example, if you manufacturer increases the price of Vitamin C tablets by 10%, the demand will not drop by 10%. It will either remain unchanged, or the change in demand will likely stay below 10%. Whereas a perfectly inelastic demand is when a change in the price of a product does not bring any change in the quantity demanded. The current immunity boosters have exhibited inelastic demand during the pandemic.
A sound immune system is the ‘anti-virus’ defense against any disease, and at this time, it has become a requirement. There are several healthy foods available right in your kitchen that can pump up your immunity. Honey is anti-bacterial and rich in antiox. Oats are rich in fiber and an excellent source to boost your energy. Garlic is a high source of vitamins that protects against common colds, coughs, and chest infection. Olive oil and vegetables have an added advantage for patients who suffer from arterial blood pressure. Neem tea improves indigestion and constipation, and neem can reduce acidity as well. Turmeric is believed to reduce arthritis, asthma, colds, cancer, diabetes and inflammation, and much more. All these are essential ingredients are usually present in everyone’s kitchen, however, their demand has gone up during the pandemic as a substantial number of people were making homemade immunity boosters like Kada (herbal tea), Haldi Doodh (milk added with turmeric), etc.
National Horticulture Board (NHB) had recently said that the price of garlic shot up at the highest rate of 55% in Delhi this year. Domestic and export demand for turmeric also rose because it is seen as an immunity-boosting product. With orders pouring in from the Middle East, the US, Europe, and Southeast Asia, prices had risen 4% to Rs 60-62 a Kg in 2020. But these increasing prices didn’t stop the consumers from purchasing these herbs, as this has become a certainty in this pandemic for building the immunity. Turmeric (Haldi) has surged by over 40 percent on e-commerce platforms in the last few months, a product like honey which used to be 9 percent of a consumer’s shopping bill, is now upwards of 15 percent, a product like Chyavanprash, which only sold during the winter months has done so well during the peak of summer.
Other than that, there are significant players operating in the immunity-boosting packaged products in the market, including The Himalaya Drug Company, Dabur India Ltd., Patanjali Ayurved, Organic India Private Limited, etc. Commercially, Ayurveda is a Rs 30,000 crore industry in India. During the pre-COVID-19 times, this market registered just 15-20 percent growth annually. But, the last quarter witnessed growths between 50-90 percent for many enterprises. Market leaders in this segment, such as Dabur, Baidyanath group, and Patanjali, have been popularising Ayurveda with its herbal medicine portfolio. These companies have been launching new products carrying all the essential nutrients and strengthening distribution networks to increase their market share in the country’s immunity-boosting products market. Consumer products companies are trying to capitalize on this trend to mobilize. After completing the merger of GSK Consumer, Hindustan Unilever has launched an immunity-building variant of Horlicks, which promises to have Vitamins C & D and Zinc. ITC has partnered with Amway to launch a range of immunity-building juices. Amul has launched haldi, tulsi, and ginger milk, all of which are popular immunity-boosting home remedies. Zappfresh, an online product delivery platform, is hence witnessing an increase in the purchase of near organic fresh meat and ready-to-eat products.
The manufactured immunity-boosting products have now become consistent in our grocery list. Many companies with their different yet similar immunity boosters are causing enough interest (and some confusion) among the consumers to choose the ‘best’ product – from Herbalvilla Immunity Booster for Adults to Dabur Giloy Tablet – the prices of which vary from 170 rupees to more than 400 rupees. And we might witness a price increase because of its rising inelastic demand. However, consumers will still manage to buy them and make a compromise with other goods as COVID-19 has caused enough havoc in the country. Multivitamins C, D, and Zinc supplements have been flying off the shelves of pharmacies during second wave of COVID-19 as they act as antioxidants and build immunity. Still, there is no substantial evidence to prove that they help prevent COVID-19. Even after getting vaccinated, there is no assurance that you will never get infected from COVID-19. The vaccines are also an immunity booster, and even after getting vaccinated, you still have to take precautions, wear a mask, and always sanitize yourself. Until there is an assurance that a particular dose will make us immune to COVID-19, people will highly rely on these immunity boosters and increase the highly inelastic demand for such products.
But will this inelastic demand sustain post COVID-19? At the beginning of the pandemic, people were buying immunity-building products to decontaminate, however, at some point they will find a logical reason to invest in immunity-building products. Post-COVID-19, we might see a fall in consumers buying them and the demand for these products will not be highly inelastic or perfectly inelastic. While some people may drop off buying the immunity boosters after the pandemic, there are a substantial number of consumers who have been building healthy habits and will continue having immunity boosters after the pandemic. Thus, there will be steady number of consumers of these immunity-boosting goods after the pandemic.
– Aishwarya Soman (Student of MA in Applied Economics at Christ University, Bengaluru)
Picture Credits: healthline.com / MARC TRAN / Stocksy
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