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| Sunday, 1 January 2006 |
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Features |  |
| News Business Features Editorial
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Marketing and consumer preference on herbal/medicinal beverages by Dr. S. K. D. Frank F. Niranjan and Prof. H. P. M. Gunasena Herbal industry is emerging as a successful commercial venture in Sri Lanka. Herbal industry plays a complementary role with the indigenous and Ayurvedic systems of medicine, which has a long history in Sri Lanka. Medicinal plant cultivation as a home garden crop or mono crop has existed among Sri Lankan people from the ancient times.
Species The people living in rural areas have much valued traditional knowledge on medicinal plants, their values and uses. The traditional practitioners of herbal medicine specially the Auryvedic physicians are familiar with these species. However, cultivation of medicinal plants for commercial purposes has not gained much recognition until recently. At present this industry is organized on a commercial scale and includes cultivation, supply of medicinal herbs, manufacturing, marketing and exporting of herbal products. The stakeholders directly involved in the industry are the growers, suppliers, manufacturers, marketing agents, exporters and consumers. The manufacturing sector of herbal beverages creates a heavy demand on a number of medicinal plants as an industrial raw material. The local supply of raw materials is not adequate to meet the demand; hence a large volume is imported to compensate for the deficit. The national demand for herbal materials was 3,864,759 kg in 2000. Approximately 1,509,201 kg of this amount was imported to meet the national demand at a cost of about Rs. 13 million (Mudalige, 2003). Total requirement of certain Medicinal Plants are completely imported. With the expansion of herbal beverage manufacturing industry the trend on importing raw materials is further increasing. Sri Lanka inherits ideal agro-ecological diversity for cultivation of medicinal plants. Also traditional knowledge on cultural practices exists among the rural communities and medicinal plants in home gardens are abundantly found. Hence great potential exists to organize the cultivation on commercial scale (Joseph and Abeysekera, 2004; Gunasena et al., 2004; Gunasena and Pushpakumara, 2004) to increase the domestic supply of raw materials, which would save foreign exchange and contribute to income generation and rural poverty alleviation. In the recent past different programmes have been initiated focusing on strengthening cultivation and conservation of medicinal plants in Sri Lanka. Sri Lanka Conservation and Sustainable Use of Medicinal Plant Project sponsored by the World Bank and Global Environment Facility (GEF) has been the most active programme, which has mobilized activities in four different areas; Naula, Bibile, Rajawaka and Kanneliya located respectively in Matale, Monaragala, Rathnapura and Galle districts. RETICOE is another project that has functioned since 1990s in Ritigala in the Anuradhapura district. A significant community participation in conservation of medicinal plants could be noticed in Naula, Rajawaka, Kanneliya and Ritigala areas due to the influence of these projects (Pallegedara, 2003; Joseph and Mahindapala, 2003). In Naula area related activities include cultivation of Katuwelbatu (Solanum verginianum) on a commercial scale and conservation of natural vegetation comprising of medicinal plants. In Rajawaka the medicinal plant conservation area (MPCA) has created opportunities for the local communities for income generation by supplying planting materials, especially Aralu (Terminalia chebula Retz.), Bulu Terminalia berelica, Nelli Phyllanthus embelica, Amukkara Withania somnifera (L) Dunal). In Kanneliya and Ritigala besides the conservation activities, production of value added herbal products is popular among the local communities. Prescription Herbal beverages producted in Sri Lanka could be categorized as herbal beverages, herbal medicinal beverages and other herbal products like pills, and capsules etc. Herbal beverage is a drink that can be consumed at any time without any prescription from a physician. However, consumption of herbal medicinal beverages ought to be done according to a prescription of a qualified physician. Although the people are conscious about the harmful effects of consumption of artificial beverages and other synthetic foods, preparation of herbal beverages at home is time consuming. the people residing in urban areas are also not able to collect herbal plants from their surroundings. Therefore, a high demand for instant and semi processed herbal beverages is evident. This has created opportunities for introducing natural herbal drinks to the market. At present there are about 30 herbal beverage manufacturers in Sri Lanka. This industry has the potential to develop and expand the range of items, improve marketing strategies both in the local and international markets. Herbal beverages are not essential food commodities. However, for health reasons a significant number of consumers use herbal beverages both locally and internationally (Modder and Amarakoon, 2003). Information flow in production-consumption chain is essential to provide a proper service to the consumer. Therefore, a consumer preference survey on herbal beverages is critical at this stage of development of a market-oriented industry. Objectives Following research objectives were the focus of this study. * Review the socio-economic status on herbal/medicinal beverage industry in Sri Lanka. * Study consumer preference for herbal beverages * Study market demand for the products nationally and internationally * Identify the constraints in the industry * Suggest promotion and marketing systems for the industry * Propose solutions to overcome major problems Research methodology Research methods included sources of data, areas of study, sampling design, data collection, data analysis. Primary data were collected from manufacturers and exporters engaged in the herbal/medicinal beverage industry and growers and collectors of herbal plants/parts. In addition, information was obtained from a number of consumers of herbal / medicinal beverages. Separate questionnaires were designed for interviewing the growers, manufacturers and consumers. Hundred medicinal plant growers were selected randomly from the country. In this selection district representation was not considered. Selection of herbal product manufacturers was done based on a sampling frame that was developed by this project with the help of Export Development Board and other related organisations. Herbal/medicinal product consumers were selected randomly from main cities and suburbs. Research recommendations The manufacture of herbal medicinal beverages is emerging as an important small medium scale industry in Sri Lanka. In the recent past these products have captured the local as well as the international markets due to their therapeutic value and as general health foods. In most of the Asian countries, including Sri Lanka herbal medicinal drinks play a complementary role with the traditional indigenous and Ayurvedic systems of medicine. The change of the living styles in stressed environments, particularly among the urban dwellers has created a demand for a variety of nontraditional consumer items of which herbal beverages and similar products assumes predominant place. There is an attitudinal change in the people turning towards natural organic foods and the growers and the manufacturers have to take note of this fact in developing their industries. Due to the expansion of the herbal beverage industry the demand for raw materials have increased tremendously. As the local supply, which is collected mainly from the forest areas and home gardens, is inadequate, large volumes are imported to meet the deficit. The expansion of this industry will assist in earning foreign exchange and also generating employment at the rural level. Hence, every effort has to be made to develop this industry to a sustainable status by supporting various activities in the producer-consumer chain. This survey was undertaken to address some of the issues, and in particular to understand the present status of the industry, stakeholders involved with the production and marketing these products, consumer preferences for herbal products, marketing aspects, constraints that hinder further development and how some of the problems could be overcome on short and long-term basis. Many of the medicinal plants are naturally grown in the forests reserves and home gardens and they are collected for domestic use or sale. There are about 50 medicinal plants, which are commonly used for various purposes. Good health The Ayurvedic physicians use many of them while the biggest user is the Ayurvedic Drugs Corporation of the Government. As there is no organised cultivation of medicinal plants and to meet the increasing demand the need for importing them will be inevitable. Many of these species are commonly grown in South Asia, but Indian and Pakistani imports predominate. Although the quality of the imports are reported as low compared to local products, many of the processors use them, as they are easily available at cheaper rates. In local cultivation, the grower's tradition is to cultivate those species that require minimum care and supervision. The growers avoid the species that require intensive management, although they fetch higher prices. Hence, it is necessary to organise the cultivation of these medicinal plants species on a selected basis. The growers should be encouraged to select those that have the highest market demand and cultivate them on commercial scale to earn higher incomes. In this process the interested growers should be identified and motivated to commence cultivation. A major problem of the growers is marketing and this issue has to be addressed by all the stakeholders. Other problems identified in the survey were; the lack of information on those species that are in demand and inadequate supply of planting materials. Therefore, standard nursery practices have to be developed and disseminated among the growers. The growers will have to be trained in the skills of cultivation, harvesting and processing of these medicinal plants. It will also be desirable for the manufacturers to establish their own plantations to maintain regular supplies rather than to depend on collectors/suppliers and imports. Ailments The survey indicates that the herbal medicinal preparations are preferred by persons of all age groups and in particular the middle aged groups. It shows that this age group is more conscious on the maintenance of good health. There is also an international market mainly in the European countries and Japan, which Sri Lanka not yet captured. However, many tourists visit Sri Lanka in search of herbal cures for various types of ailments. As a result of this many of the tourist hotels have established thriving herbal clinics. The types of herbal medicinal products manufactured are very diverse. Some of them are: Herbal medicinal beverages made out of Beli, Ranawara, Iramusu, Polpala, Rasankinda, Kotalahimbutu, Nelli and Komarica, herbal soups, herbal tea, herbal wines, herbal water, herbal medicinal ayurvedic products such as syrups, Arishta, Asawa, Kalka, Churna, Creams, Balms, Rasam, herbal pills and herbal oils. These are sold in the local super markets, drug stores, ayurvedic dispensaries and indigenous herbal shops, apart from supplying to the international markets. Quick relief The preference for different herbal medicinal products varies widely. The beverage type cordials are in high demand. These include Beli and nelli etc., but the range is limited. The cordials are used as common fruit juices and health drinks their range should be expanded to capture a bigger share of the market. Introduction of different types of products as cordials could expand the market. The herbal beverages that gives quick relief for common ailments such as colds and flu etc., has also considerable demand and these products deserve greater attention. Due to fewer complications compared to the western pharmaceuticals, consumers prefer these preparations. Besides those in liquid and powder also have high demand. Herbal tea is also very popular among some of the consumers. Others in powdered form which have a demand are Polpala, Gotukola and Iramusu. The concentrates may have demand as they could be prepared without much difficulty. It is most essential to manufactures these herbal products without chemical additives. The consumers prefer the natural colours and colouring of natural products could be detrimental to the industry. The maintenance of quality is most essential in the manufacture of herbal beverages. These products should not be contaminated and free of any impurities. Therefore, these product should be manufactured under clean and hygienic conditions. As for other food items maintenance of quality is compulsory, hence the manufacturers should be advised to obtain ISO, SLS standards. Presently laboratory tests are carried out during processing and good manufacturing procedures followed. The lacks of adequate information on the display packs have been noted in the survey. The inclusion of list of active ingredients, date of manufacture, expiry date and batch number etc., are important information to be printed on the label of these products. This information will not only improve the quality of the product but also improve consumer trust, which is very essential in their marketing. In this process the involvement of the Government is essential to maintain tract of the quality of the products, whether they are for local consumption or export. Various types of packages are used in the packaging of herbal medicinal products. These include glass or plastic bottles, tin cans, tetra packs, and pouches. The proper packaging of products is essential to capture a wider market. The market preference has been for standard transparent glass bottles. The glass bottles are expensive and further they are easily broken or damaged and requires frequent replacement. This is a costly process for the manufacturing industries. The local packaging industry is not well developed; hence there is a problem in the choice of packaging materials. Value addition through attractive packaging will be a successful marketing strategy especially in the international trade. Market strategy The production of packaging materials as an independent industry should be encouraged to support the herbal medicinal beverage industry and similar industries. The size of the pack is also important. Most consumers prefer single serving packs or that could serve 4-6 persons at household level. In many countries single serving packs are popular as they could be consumed at the sales point itself. It is necessary to develop a market strategy for any new consumer products such as herbal medicinal beverages. Present marketing links are weak and needs improvement. It is also necessary to have constant flow of information from the growers, collecting centres, to the manufacturers and finally to the consumers. The present marketing system involves a large number of intermediaries; the collectors who travel in the villages and collect the materials from the growers and supply them to the retailers or to the wholesalers. Sometimes the collectors themselves harvest them from the forests. Some collectors sell them to the Ayurvedic physicians in the village. The manufacturers of these items sell them mostly in the retail shops, super markets, hotels, pharmacies, and own dispensaries and through the Aryurvedic Drugs Corporation. There are established distribution channels developed by the manufacturers, either through direct delivery or on contract basis. The best sales opportunities exist in the main cities of Colombo, Galle, Matara, Hambantota, Kandy and Kurunegala. To be continued |
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In addition Sri Lanka has a reasonable area under natural forest cover,
rich in medicinal plant biodiversity such as the Nilagala forest in
Monaragala district and Ritigala forest in Anuradhapura district. 
