App Store trend of 2018: Self-care

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Apple’s distribution platform for mobile apps, the App Store, recently selected self-care as its trend of the year. Wellness apps designed to encourage healthy habits, improve sleep, reduce anxiety and increase mindfulness have been the major trend on the iOS platform over the past year, according to Apple.

Fittingly, one of these popular apps is called #SelfCare, launched by TRU LUV Media in summer 2018. Designed like a game, the app promotes emotional wellbeing via breathing exercises and other small acts of self-care. Another is called Shine – Self-Care & Meditation, which delivers free daily motivational messages, 5-minute affirmations and meditations, plus tips on how to reduce stress, improve sleep and increase focus.

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The popularity of such apps is good news for OTC marketers, especially those operating in lifestyle and VMS categories that focus on mental wellbeing, i.e. sedatives & sleep aids and herbal memory & brain health. Apple noted that apps for physical health, such as those that track calories and steps, have long been popular with iOS users, but emphasised that this trend towards apps for mental health is a new phenomenon.

That said, what may be somewhat concerning to OTC marketers is that this evolving definition of self-care doesn’t appear to include self-medication. While OTC New Products Tracker lists medical device launches in 2018 that incorporate an accompanying app – such as Nokia Sleep and Natural Cycles, the latter designed to aid conception – supplements or drugs backed by a mobile app are much thinner on the ground.

Review the latest new products hitting the CHC market with OTC New Products Tracker, the ideal competitive intelligence tool. We recently unveiled a major update, with eye-catching new graphs and powerful search filters that help you visualise and explore the vast archive according to your exact requirements. To trial the updated database or for a demo, please contact waisan.lee-gabell@NicholasHall.com

 

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Latin America: Focus on Brazil

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Nicholas Hall’s 4th Latin American Consumer Healthcare Conference was held in Sao Paulo, Brazil last week and attracted a large and enthusiastic audience. This vitality is reflected in OTC growth trends – according to the latest MAT Q3 2018 figures, which will be published along with trend reports on the OTC DASHBOARD website soon, Latin America remains the fastest-growing region in the global OTC market, with sales up 12.8% to US$8.5bn in the year to end-September 2018.

Brazil is at the heart of this upturn, as shown by our chart below displaying the Top 5 countries in the region. Brazil’s OTC market is enjoying continued double-digit growth, and accounts for almost half of regional turnover, ahead of Mexico and Colombia. There is currently a proposal to create a legal mass market for CHC products in Brazil, which could provide further fuel for OTC growth, however there is currently strong opposition from doctors, pharmacists and, surprisingly, consumer associations, so the proposal is unlikely to be approved in its present form.

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Here’s a brief roundup of all presentations at our 4th Latin American Consumer Healthcare Conference – a fuller review will be in the next issue of OTC INSIGHT Latina:

  • Juan Thompson (ILAR): Huge savings for public health systems could be made by encouraging OTC treatment of common, non-serious conditions, thereby reducing public expenses.
  • Andre di Donato (MyPharma2go): By understanding the intricacies of the region’s regulatory systems, we can take advantage of legislation, rather than being restricted by it, and gain in-depth market insights. In particular, MyPharma2go is detailing Brazilian doctors to write prescriptions for high-strength supplements imported from the USA, which are delivered to individual consumers / patients in under 14 days — in the case of Celebrity Vitamins, the company is generating 2,000 prescriptions a day.
  • Rodrigo Ribeiro (GSK): Recommendation is the most powerful tool we have, so we cannot underestimate the importance of investing in HCP promotion and education, in addition to informative consumer-oriented advertising.
  • Tatiana Raposo Pires (Herbalife): It is likely that the food supplements industry in Brazil will benefit greatly from ANVISA’s new category definition, including specific and simplified legislation; however, there are still some obstacles to overcome, particularly relating to probiotics, which offer high-growth potential.
  • Rodrigo Garcia (Pfizer): There are many regulatory barriers to switch in LatAm, including political and social; but public education and encouraging regulatory agencies to recognise increasing consumer understanding of OTCs are key to pushing for switch.
  • Rosana Sun (Adigo) reminded us of the importance of human emotions and the essential human differences in developing relationships and interacting with others in the business world.
  • Julio Cesar do Monte (J&J): In order to survive in a changing and increasingly-digitalised environment, companies need to remain open and flexible to change, looking to technology for new ways to gain a competitive advantage.
  • Keith Garrity: Outsourcing and brand fostering is increasingly popular as part of companies’ global growth strategy, recognising the importance of local nuance and market specifics.

Stay up to date with the latest trends and developments impacting Latin America in Nicholas Hall’s OTC INSIGHT Latin America. This bi-monthly publication includes new product activity, recent LatAM news, a global OTC update and much more. To receive a sample issue or for details of subscription rates, please contact melissa.lee@NicholasHall.com

Q3 2018: Global OTC growth steady at 4.3%

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According to the latest MAT Q3 2018 figures from DB6 – released at the end of last week – the global OTC market maintained 4.3% growth in the year to end-September 2018. As our graph below shows, the world’s two largest OTC markets, USA and China, still overshadow the rest of the Top 10 and growth for both markets in Q3 was faster than any of the other Top 5 countries.

US growth was up slightly to 2.6% (vs 2.5% MAT Q2 2018), where a slower performance in CCA was offset by improvements across all other major categories. Asia-Pacific grew by 4.9%, with mixed performances among the top markets. While growth remained steady in China and India, Japan sales continued to weaken (+0.3% vs +0.6% MAT Q2 2018) and Australia remained subdued (+0.9%).

Top 10 CHC markets MAT Q3 2018

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Half of the Top 10 markets are still located in Europe, though growth for the two biggest – Germany and Russia – was in the 1-2% range in Q3, while for the other three – France, Italy and the UK – it was in the 2-3% range. Overall, Europe’s OTC performance remained constant, increasing by 2.9%. Western Europe was up by 2.4%, with France continuing to advance but Germany hindered by weak CCA sales, while growth in Central & Eastern Europe was up 4.1%.

Middle East & Africa growth was stable at 6.6%, with double-digit growth in Turkey (+12.9%) still behind the strong upturn. Latin America (+12.8%) growth remains driven by high levels of inflation, with the largest market Brazil up by 10.8%. Commenting on the Q3 results, Nicholas Hall said: “This [Brazil] is the world’s 8th largest CHC market, and will probably overtake Italy in 2019. The economy is totally flat and inflation is running at almost 5%; in that sense CHC is holding up well in this very important market.

Nicholas Hall’s DB6 MAT Q3 2018 figures are now available! DB6 features over 24,000 records and covers 10,000+ brands and more than 2,500 companies, offering complete coverage across 64 countries. To find out more about this essential service, or for a free demonstration, please contact kayleigh.griffinhooper@NicholasHall.com

Novartis’ OTC future comes into focus

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Still ranked No.10 globally among OTC marketers, Novartis has nevertheless been gradually disinvesting from the consumer healthcare market in recent years, as it pursues its plan to “become a more focused innovative medicines company”, according to CEO, Vas Narasimhan. Deciding on the future of Sandoz and Alcon is key to this plan, and two developments over the past week have made Novartis’ objectives clearer.

First, Alcon filed an initial Form 20-F registration statement with the US Securities & Exchange Commission in relation to Novartis’ intention to spin off its eye care division Alcon as an independent, publicly-traded company. The deal is expected to complete in H1 2019 – subject to general market conditions, tax rulings and opinions, final endorsement from the Board of Directors and shareholder approval at the 2019 AGM – and “for Alcon, it means more strategic focus and flexibility to pursue compelling growth opportunities in eye care devices, where it has the strongest portfolio and unmatched ability to serve patients worldwide,” says Narasimhan.

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Secondly, despite further spin-off rumours, a Novartis spokesman told Reuters that the company was “completely committed” to Sandoz and “looking at transforming it and making it as strong as it can be in the global generics business.” Novartis recently agreed to sell its Sandoz US dermatology business and generic US oral solids portfolio to Indian-based Aurobindo Pharma. Novartis spokesman Sreejit Mohan said: “The whole goal is to try to make Sandoz as agile as possible … to give it the autonomy to be as agile as possible. That’s essentially been the message that we’ve been delivering, so I have no idea how that led to saying ‘split off.’”

Both developments make the future of the Novartis consumer healthcare business a little clearer, with sales likely to be fairly evenly split between a new standalone Alcon division – including key brands such as Systane, Tears Naturale and Vitalux – and the legacy Novartis OTC business, largely made up of Sandoz. Both these subsidiaries, Sandoz and Alcon, were excluded from the consumer healthcare j-v with GSK, and together have helped establish a Top 10 OTC company – however, split apart, it looks unlikely either will rank in the Top 20 by the second half of 2019.

To keep track of the latest innovations to hit the CHC market, OTC New Products Tracker is the ideal competitive intelligence tool. Last week it also unveiled a major update, with eye-catching new graphs and powerful search filters that help you visualise and explore the vast archive according to your exact requirements. To trial the updated database or for a demo, contact waisan.lee-gabell@NicholasHall.com

Sleep disorders on the rise globally

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According to a new in-depth analysis of the global sleep aids market by Nicholas Hall’s Reports, sleeplessness and sleep disorders are on the rise, with approximately one third of the world’s population affected. Many consumers are happy to self-medicate, increasingly opting for a variety of herbal & natural, homeopathic and medical device brands, driving OTC growth in key markets like Brazil and Spain (see sample pages).

In terms of sales, sleep aids & sedatives generate an OTC total of over US$2.3bn globally, but have been characterised by low growth in recent years, and are in need of rejuvenation via new product development, adjacencies or connected health solutions. The self-medication sleep aids market (registered OTCs and a variety of supplements) also suffers from regulatory diversity across markets for common sleep aid ingredients.

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Genuine innovation is thin on the ground, but generics and “me-toos” launch frequently. Adjacencies focused on sleep offer alternatives, with other categories also entering the fray including nighttime analgesics, cough & cold remedies, menopause and other supplements. Connected Health is a key area of expansion. Sleep aid brands partnered with technology – passive (e.g. analysing sleep patterns / providing feedback) or active (improving sleep) – may break the low-growth cycle.

Comment from Ian Crook, Managing Editor, Nicholas Hall’s Reports: Sleep is a health area that lends itself easily to self-medication via sedating antihistamines and herbal & natural ingredients such as melatonin and valerian, while medical devices and digital health focused on sleep are seeing increased investment. With widespread concern over the “sleep loss epidemic” and significant implications for overall health from lack of sleep, it is imperative that consumers have access to tools to help them sleep. Raised levels of stress, anxiety and smartphone / tablet use ensure rising demand that can be tapped into by the right self-care solutions.

The full report, Sleep: Exploring Opportunities for Growth in Sleep Aids & Sedatives, is available now and more details can be found here. To order your copy, please contact melissa.lee@NicholasHall.com

MAT Q2 2018: 5 Key Trends & Developments

Our latest Q2 2018 trend reports on the OTC market at global, regional and Top 20 level are now available on the OTC DASHBOARD website. Here we highlight some of the key trends & developments that have emerged in the latest data.

  1. Europe and Asia drive CCA upturn: Improving CCA growth helped the global OTC market report a slight upturn in Q2 (+4.2%). This followed a return to CCA growth in Europe (+2.7%) in Q2 2018, powered by the UK (+5.8%) and Germany (+4.1%), while France (+0.5%) also returned to positive territory. CCA growth in Asia-Pacific (+5.7%) likewise improved in Q2, thanks to a clear upturn for Systemic cold & flu (+4.7%), with key markets like S Korea enjoying high growth (+6.6%) on the back of OTC innovations such as the relaunch of Dong-A’s Pantec Q.
  2. Sanofi reclaims the No.3 spot from J&J: While GSK maintains its clear lead as the global OTC No.1 marketer, a tight three-way race remains in play for the No.2 spot between Bayer, Sanofi and J&J. Bayer is still the global No.2, while Sanofi reclaimed its position as the global No.3 in Q2 2018, moving ahead of J&J. In Sanofi’s Q2 results, the company reported a return to OTC growth in Europe and a continued strong rise in Emerging Markets, especially in Latin America. The company reported a CCA upturn in both regions, offsetting US allergy decline.
  3. US market behind VMS upturn: Higher Q2 growth in North America’s vast supplements market (+4.0%) has been the key trend behind the improving global picture. In Q2, multivitamins (+2.8%) underwent a clear upturn while the trend for probiotics (+6.9%) and immune supplements (+10.4%) also improved. The latter category has been a particularly vibrant source of OTC innovation in recent months; for example, Nestle has launched elderberry immune gummies as part of its mykind Organics line, while post-surgery immunity supplements and those with a digestive health crossover have also been popular.
  4. Where’s the growth potential? 1. Adjacencies: OTC marketers are increasingly looking to build new consumer healthcare adjacencies, either via switch – in the case of erectile dysfunction and Pfizer’s Viagra Connect – or new product innovation, in the case of medical cannabis. Canada recently voted to legalise cannabis, though the future for CBD and THC supplements remains uncertain. We don’t yet include sales of medical cannabis products in OTC DASHBOARD, though we do track developments in this category closely in both our innovation database, OTC New Products Tracker, and regulatory newsletter, OTC.NewDirections.
  5. Where’s the growth potential? 2. New territories: Rest of World countries (mainly Middle East & Africa) enjoyed continued high in Q2 2018, with sales up 6.6% in the 12 months to end-June 2018, to total US$9.2bn. High growth for analgesics (+7.2%) and CCA products (+6.7%) ensured a strong regional rise overall, allied with a dynamic performance in the key regional market of Turkey (+13.3%). RB is one marketer performing well in the region, claiming a spot among the Top 5 OTC marketers in Q2 2018, following dynamic growth of its CCA portfolio, powered by sore throat remedy Strepsils and its strong support via A+P and line extensions.

With M&A activity in the CHC industry increasing rapidly, now may be the right time for your business to explore growth opportunities. Our specialist M&A boutique is working with a number of strategic and financial partners to assess potential opportunities — for buyers and sellers — and is well placed to discuss the current business climate and possible synergies. To find out more, please contact ammar.basit@NicholasHall.com

Nicholas Hall Looks Over The Horizon

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Nicholas Hall’s Postcard from a Secret Location in Asia: I’ve spent most of this year making Keynote Addresses and Management Presentations on the same theme:

  1. The CHC industry is growing at an historical 4.5% CAGR by value and only half of that by volume, which is more or less in line with population growth + inflation.
  2. Although there are important outliers, the core of the market is weak, including the major players if we look at organic growth; in fact the share held by the Top 15 CHC companies is slightly less than 5 years ago, defying the first rule of business, which is that the big usually get bigger.
  3. Future prospects are modest, and the best we can expect using the current business models is 5.5% CAGR.
  4. Widening the market definition to include some adjacent categories and e-commerce / multilevel marketing — which we should do and would do if we had reliable data — increases market size by about 50% and nudges growth rates to closer to double digits; the only problem is that most CHC players are either not playing or are weak in these adjacencies.
  5. Essentially the market has the same shape as when I came into it in 1970 — pills in bottles, creams in tube, pharmacy distribution, and still partly supported by prime-time TV; most of the brands are the same, too, even if many company names have changed.

So I’ve come to a tropical island, sitting under a thatched roof by a palm tree, and I’m scoping the third edition of my New Paradigms report, which was published in 2003 and 2009 and was by our standards a blockbuster. The sub-title is Over the Horizon and this time I will spend most of the report’s 300 pages looking at what the market will be in 2025 and 2030, how we will get there, who will reach the winning post first, and how we can and must adapt strategies if we are to succeed in the intervening years. 

This book will look Over the Horizon, but won’t be Pie in the Sky. In my usual forthright manner I will tell subscribers the plain truth, what I think will work, what won’t work and (sometimes) that I don’t know. The emphasis will be on actionable strategies. And to make that realistic, every global licence will have a dedicated 2 hour Webinar to explain key learnings and how it will affect the subscriber’s business prospects, with an option for a full one-day Forensics to go into more depth. I will conduct these Webinars and Forensics in person, just as I will write every word that appears in the report, supported by a talented team of internal and external researchers.

 The Table of Contents can be accessed here, but let me identify some key topics 

  1. How to Innovate (at last!)
  2. The new Adjacencies — obesity, diabetes, the microbiome, sleep, brain health, sexual health, etc.
  3. The Naturals trend
  4. Cannabis
  5. Winning in Pharmacy
  6. e-Commerce
  7. The new Emerging Markets — Nigeria, Iran, Bangladesh, etc.
  8. Future Competition – it’s not who you think!
  9. Winners & Losers

Publication date is April-May 2019, to incorporate 2018 data, and there are some juicy early-bird discounts to mop up any unspent budget this year. Please call any one of my team for more information, and I’m always available to speak to my key accounts about the scope and deliverables of this far-sighted report.