Spotlight on WBA, plus US and UK retail

In its latest results, Walgreens Boots Alliance announced that fiscal 2021 sales from continuing operations rose by 7.5% on a constant currency basis to US$132.5bn, exceeding expectations. In Q4 fiscal 2021 (June-August 2021), sales increased by 11.8% to US$34.3bn.

  • United States had Q4 sales of US$28.8bn, up by 6.6%. Retail sales grew by 6.5%. Comparable sales were up 8.1%, reflecting an 8.9% rise in comparable pharmacy sales and 6.2% growth in comparable retail sales. Excluding tobacco & e-cigarettes, sales increased by 7.2%, reflecting broad-based growth across all categories. In particular, health & wellness sales were 14% ahead, aided by cough / cold & flu, at-home Covid tests and vitamins.
  • International sales rose by 61.8% to US$5.5bn, including a favourable currency impact of 9.2%. Sales were up 52.6% (CC), including higher sales associated with the formation of the company’s wholesale j-v in Germany. Excluding this, sales rose by 9.3% (CC), reflecting the ongoing recovery in the UK market, where Covid restrictions were lifted in July 2021. Boots UK comparable retail sales were up by 15.0%, with footfall on the high street recovering although still below pre-Covid levels. Boots.com continued to perform ahead of expectations, with digital sales in Q4 more than doubling vs pre-Covid levels.

Both the US and UK CHC markets struggled for growth in the MAT Q2 2021 period – as per the chart below – but there were signs in the WBA results of a strong recovery in retail pharmacy sales in both markets in July and August 2021.

WBA has also announced its new consumer-centric healthcare strategy to drive sustainable, long-term growth. The plan features the launch of Walgreens Health, a technology-enabled care model powered by a nationally-scaled, locally-delivered healthcare platform. Walgreens Health will bring equitable, personalised, healthcare to communities across USA in-store, at home, in the doctor’s office and via a mobile app. WBA’s aim also includes reimagining retail through expanded health & wellness offerings and mass personalisation; accelerating WBA brands and digital offerings; and expanding the Transformational Cost Management programme.

In addition, WBA has increased its ownership stake in VillageMD from 30% to 63% to advance its strategic position in the delivery of value-based primary care, a fast-growing segment of the healthcare system. The US$5.2bn investment will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in 30+ US markets by 2025 and 1,000 by 2027, with more than half of those practices in medically underserved communities. 

Now is your final chance to enter our Nicholas Hall’s CHC Marketing Awardstaking place during our APAC e-Conference 2021 on 23 November! If you wish to put your brands in the spotlight, enter your campaign before 22 October. To find out more about this online meeting or awards criteria, please contact elizabeth.bernos@NicholasHall.com.

Macro Trends: Economic & Demographic Outlook

In this week’s blog, we look at two recent reports on macro trends that will have a future impact on the consumer healthcare market. The first looks at short-term economic trends and the second longer-term demographic trends.

Last week the International Monetary Fund has revised down its forecast for global economic growth in 2021 to slightly below its July 2021 forecast of 6%. At a virtual G20 event, IMF Managing Director Kristalina Georgieva said: “The most immediate obstacle is the ‘great vaccination divide’ – too many countries with too little access to vaccines, leaving too many people unprotected. At the same time, countries remain deeply divided in their ability to respond – in being able to support the recovery, and in their ability to invest for the future.”

“We face a global recovery that remains ‘hobbled’ by the pandemic and its impact. We are unable to walk forward properly — it is like walking with stones in our shoes.” Three of the most painful stones are divergence in economic growth, inflation and global public debt. As the chart below indicates, the sectors currently facing the largest inflationary pressures include transportation and food, whereas prices in the health sector remain stable.

As for demographic trends, according to a report in The Times newspaper last week there will be more Nigerians than Europeans in 60 years’ time. Some two-thirds of Africans are aged under-25 years (in Senegal the average age is 19 years) and many capitals and cities on the continent are unable to cope with this “youthquake”, with no time or money to build the basic infrastructure, often coupled with a high cost of living. While this youthful energy could be a good thing, the lack of opportunities – coupled with climate migration – is driving many of the younger generation to leave Africa, with Europe becoming a spill over zone.

Nicholas Hall Writes: “Many of these new consumers will rapidly become empowered, and although it is not a factor that will influence next year’s P&L, sensible companies will start to plan for much larger immigrant communities, which will have very determined views on the CHC products they buy (and anyone who doubts this has only to take a look at the very specialised products sold to the Hispanic community in North America by companies like Genomma). Indeed, some of these populations will be made up of ‘illegals’, who will not sign up to see community physicians and for whom CHC will be primary care and possibly much more. And for that, I fear, we are not at all prepared as countries or an industry.

You can save up to GB£2,500 when you pre-order our forthcoming Hot Topic report, Sexual Health & Fertility! This title will delve into key topics, such as home diagnostics, intimate care, ED and many others, as well as tracking NPD and Rx-to-OTC switch activity, plus much more. To pre-order your copy, or for further details, please contact melissa.lee@NicholasHall.com.

MAT Q2 2021: Global CHC Market Trends

The latest update from Nicholas Hall’s CHC database DB6 indicates that in MAT Q2 2021, the retail (bricks & mortar) CHC market returned to growth following a decline in the previous reporting period – the first seen since DB6 records began. Overall global CHC sales were up 1.7% to US$151bn.

In terms of performance by geography, the Americas returned to positive growth (+1.3%), with a flat performance in North America bolstered by LatAm markets, including double-digit growth in Brazil (+10.6%). USA remains the clear No.1 CHC market globally, and grew modestly (+0.2%).

Asia-Pacific was the best performing region (+4.8%); while it continues to be impacted by loss of revenue from overseas visitors in key markets Japan (-4.0%) and Australia (-5.5%), high single-digit increases in China and India helped to lift the topline.

Source: Nicholas Hall’s global CHC sales database DB6 (all values at MSP).

Europe continues to decline (-2.0%), still heavily impacted by retraction in CCA and analgesics in Western Europe in particular. Key markets Germany (-8.5%) and UK (-10.8%) fell significantly, although this was partly offset by a positive trend in C&E Europe (+3.6%), with Russia maintaining mid-single digit increase (+4.1%) and Poland returning to growth after a decline in the previous reporting period.

Nicholas Hall Writes: “In 2020 we saw the market grow across the board during the first half, ease back in the second half, perform very badly in Q1 this year and return to growth in Q2. Is this a trend? Is it as simple as drawing the line forward to the point where we regain the pre-pandemic 3.7% retail sector growth rate? We all have our own point of view, but it would be a brave soul prepared to make a firm prediction. So in the best tradition of being a thrusting brand manager, I’m going to hedge my bets until I see the Q3 figures from DB6.

We are pleased to announce that Nicholas Hall’s DB6 mid-year update for 2021 is now available! Subscribers can access over 150,000 pieces of data, with more than 30,000 records covering 13,000+ brands and 3,000 companies across 63 countries. To find out more or to set up a free demo, please contact kate.holdcroft@NicholasHall.com.

North America Conference Report

Nicholas Hall’s North America e-Conference was held last week, with various speakers giving inspiring presentations on the latest trends in the CHC market, innovations, rising brands, keys to brand success, modern marketing strategies and future growth categories.

Nicholas Hall began the webinar by unpacking current key trends in the industry, such as high interest in probiotic & prebiotic products and CBD, despite markets for both flatlining. He examined how many jumped on the immunity bandwagon in response to the pandemic, with brands such as elderberry-based Sambucol experiencing great success in 2020, but also how this category has seen a slowdown in the first few months of 2021. Nicholas concluded with a look ahead at Infinity Zones (future growth categories), which include probiotics, food allergy & intolerance, cannabis, sexual health and obesity (among others).

The following talks focused on the non-prescription imperative, and how the current challenge of access to health treatment in the USA may best be addressed. Mary Alice Lawless discussed the new and exciting capabilities of Biograph by Amwell, which uses fully customisable, layered frameworks for proper implementation of labelling strategies and allows for communication and education to be personalised to an individual profile. Jim Parker and Joseph McGovern discussed the issue of undertreatment in the USA and the steps that can be taken to increase and improve access to treatments on a non-prescription basis, including CHC product development and advances in technology to help consumers self-diagnose conditions and ensure proper self-selection. Clark Richardson finished this section of the webinar, concluding that the next crops of OTC switch candidates will require different tools to help consumers safely select and use medications, and that comprehension studies, self-selection studies and actual use studies must be undertaken.

The Non-Prescription Imperative: Switch to return as key driver of US OTC growth

Next up, Douglas Stukenborg gave insight into the keys to success he discovered when helping to create the Welly plaster brand. His tips included the need to start with the problem in a category rather than the answer, to limit/leverage distribution to manage risk and to launch fast & fix fast. Second in the segment on Challenger Brands, Daniel Hassan described how brands IB Gard, REMfresh and Fiber Choice became successful while 85% of new CPG brands fail. His advice included building enduring brands in the drug free space, creating patented prescription-quality innovations, winning support in the medical community, and providing science to allow educated consumers to believe in products and to allow doctors to recommend products.

Anna Mayo and Corinne Shindelar then discussed online sales trends, movement towards subscription services for vitamin products, the increasing popularity of click and collect and DTC brands, the trend towards clean and natural and plant-based products among younger consumers, the growth of the natural/organic industry, the increase in herbal supplement sales in the USA and the growth of consumer interest in GMO-free, cruelty free and vegan products. Finally, Michelle Bottomley described the “Modern Marketer’s Tool Kit”, with focus shifting from product-centric to consumer-centric, and from product sales to consumer portfolio growth. She also discussed how modern marketing can flex across a continuum of art & science to utilise multiple channels and integrate all communications to give 360-degree surround of the target consumer with a seamless, personalised experience at every point of contact. Steve Sowerby rounded off the conference with a helpful summary of each speaker’s contributions and some interesting closing thoughts for the industry moving ahead.

If you were unable to join, contact us to purchase a recording of the North America session. Next on the agenda is our APAC e-Conference 2021 on 23 November and the Latin America e-Conference 2021 on 14 December. To find out more about these conferences, entry submission criteria for any of the awards, or to book your place, please contact elizabeth.bernos@NicholasHall.com.

Three surveys assess Covid’s impact on our health

Three surveys published in recent weeks have gauged the impact of the Covid-19 pandemic on our dietary and supplement habits, our use of technology and our mental health. Here we present a quick survey of the findings in all three studies.

According to a survey of 13,000 people in 24 countries conducted by OnePoll on behalf of the Council for Responsible Nutrition and Herbalife Nutrition, eight in 10 US citizens believe their health is “work in progress”. Some 89% of respondents worldwide are taking steps to improve their health, with 81% reporting that the pandemic helped to kickstart them.

Vitamins and supplements are a priority for many; when asked about how their health goals have changed, half said they are more focused on eating healthier, including supplementing their diet with vitamins & minerals, with the average respondent spending around US$286 each year. However, only 69% reported feeling knowledgeable about the health benefits and 77% would like to know more. Some 30% are most likely to get information about vitamins and supplements from internet searches, media and social media, followed by consulting with their doctor (27%).

Source: OnePoll / Herbalife / CRN

According to a survey from Saudi-based cultural institute Ithra, 91% of people globally are spending more time online because of the pandemic, and 44% are worried about the impact of internet and smartphone use on their health. Respondents in Sub-Saharan Africa and South Asia appear most worried, with 74% and 56% respectively fearing the negative consequences of the internet on wellbeing vs 27% in Europe and Central Asia. Consistent with their increased use of devices, younger people are experiencing more physical symptoms than their elders, with 50% of Gen Z respondents complaining of tiredness, poor sleep and headaches.

And, finally, a study published in BJPsych Open revealed the mental health of adults aged over 50 has been significantly compromised by Covid-19. University of Surrey researchers analysed data in 5,331 participants from the English Longitudinal Study of Ageing. Self-reported depression in June and July 2020 were compared with baseline data from 2-3 years prior. Some 26% met the criteria for clinical depression during the pandemic vs 14% in previous years. Women were found to be at a much higher risk, as well as people living alone and those with long-term health conditions. Women living in an urban environment showed a larger increase in depression symptoms than those in more rural areas. The research also found that individuals at the younger end of the 50+ population suffered more.

In just 2 weeks, you can join Nicholas and a panel of industry experts at our North American e-Conference 2021Sponsored by Catalent, you can look forward to hearing about consumer shopping behaviours, the non-prescription imperative, natural channel retail world and much more. To register, or for further details, please contact elizabeth.bernos@NicholasHall.com.

ADM Survey: Behaviour Shifts Create CHC Opportunities

Some 60% of consumers plan to improve their overall health & wellness in the next 12 months, according to Archer-Daniels-Midland (ADM), which transforms natural products into ingredients and flavours for foods & beverages, supplements, pet nutrition and more. There is also a more proactive approach to managing wellbeing with functional nutrition, close-to-nature ingredients and foods that signal self-care. ADM has identified five behaviour shifts that are creating opportunities for manufacturers to support evolving needs:

  • Renewed motivation to improve individual health & wellness Pandemic experiences have varied across the globe, but an almost universal takeaway is the renewed focus on preventive health & wellness behaviours. Products designed for all life stages will help consumers protect themselves, their families and their communities
  • Holistic approach to managing mind-body connection 51% of consumers plan to improve their cognitive and mental health over the next 12 months. As we return to more active lifestyles, convenient products with functional ingredients that boost energy, enhance cognitive performance & regulate mood are gaining prominence
  • Tailored nutrition supports personal health & wellness goals Nearly two-thirds of consumers are interested in customised foods & beverages. A greater understanding of how diet can impact health is spurring more people to choose wholesome, nutrient-dense ingredients, with particular focus on fibre & protein. As the chart below from our CHC New Products Tracker database indicates, the number of new personalised VMS products launched has grown sharply in recent years
  • Proactive perspective on immunity With 65% of consumers more concerned about immunity, there is a shift from a defensive to a more proactive & holistic approach. People are looking for ways to incorporate immune function-supporting solutions like probiotics and vitamins C & D into their daily lives. Products with functional ingredients that support a healthy immune system will increasingly attract consumer attention
  • Purposeful indulgence new “permissible indulgence” During the pandemic, many people have given themselves permission to consume indulgent food & beverages as a form of self-care. Consumers are recognising that, as long as these are purposeful — not impulsive — choices, indulgence has a role in a positive relationship with food

Nicholas Hall’s Touchpoints: The ADM research tells us nothing we didn’t know already, but as always it’s good to put numbers to the various consumer trends, and to be reassured that these trends continue as we head towards the second anniversary of this shocking pandemic. The same is true of the birth rate data in our second lead story. At the outset of Covid-19, with the expectation that a large part of the world’s population would spend much more time at home, we all assumed that the birth rate would go up, which is the reverse of what actually happened. As The Consumer remains at the centre of our industry, we are well advised to take seriously behavioural trends such as these as we shape future strategies and return to the New Normal. A longer-term trend underpins our third lead story this week, with Catalent’s acquisition of one of the leading manufacturers of gummies, a delivery system popular with adults as well as children that has taken the US market by storm and which is poised to do the same in the rest of the world.

You can save with the early bird booking discount when you register to attend our APAC e-Conference 2021 before 21 September! Taking place on 23 November, join Nicholas and the team to Face the Future together. Stay tuned for new additions to the agenda! Plus, this event will also host the Nicholas Hall CHC Marketing Awards for the region. To find out more about the conference, entry submission criteria, or to book your place, please contact elizabeth.bernos@NicholasHall.com.

Kerry survey highlights growing interest in probiotics

Demand for probiotics is growing as digestive health moves up the consumer agenda, according to a survey conducted by Irish taste and nutrition company Kerry. The company surveyed 13,000+ consumers across 16 countries. Almost half (47%) of those questioned were aware of probiotics or cultures, up from 42% in 2019 when the survey was last conducted. Awareness was particularly high in Latin America (63%) and North America (61%). One in four respondents (25%) had used a product containing probiotics in the past six months, up from 21% in 2019; a further 44% said they would consider doing so vs 40% in 2019. Probiotic use in the past six months was especially high in China (49% of respondents), followed by Mexico (42%). Digestive Health was ranked third on the list of reasons to purchase healthy lifestyle products, up from fourth in 2019.

Writing in CHC.Newsflash, Nicholas Hall said this story is a welcome reminder that probiotics remains one of the most attractive categories in consumer healthcare, despite flat sales during Covid. As Kerry VP John Quilter points out: “Demographic changes, such as population ageing and lifestyle choices, have increased the prevalence of digestive disorders, while the pandemic has accelerated the shift towards more proactive approaches to health. As a result, consumers [are] increasingly well educated about the role of probiotics and their ability to support both digestive health and overall wellness.”

Nicholas commented further: “Our industry is receiving this message loud and clear, to judge by the large number of probiotic new products. Indeed, it’s highly instructive to look at the very large number of new CHC products launched in 2020 as measured by our Tracker. There were three standout categories: probiotics, CBD and – no surprises – immune supplements. These categories recorded around 250-300 launches each, substantially ahead of multivitamins, antiseptics & disinfectants and sedatives & sleep aids. The impact of Covid is written all over this data, but despite the disruption in purchasing habits, marketer perception of unmet consumer demand is clear, with probiotics and CBD very much front of mind.

As I’ve written before, I see probiotics as a three-stage process: entry level, using well-known strains with a gut-health positioning; first stage development, embracing new indications such as immunity and women’s health, but still using existing strains and combinations; and the far stage, with exciting new indications including metabolic reconditioning, and completely new strains. At present we are about a third of the way into the second stage, with lots of new probiotics coming to market. But what we lack is clinical evidence with large sample sizes from research centres with unimpeachable credentials, sufficient to persuade, for example, the Doubting Dr Thomases at the European Food Standards Authority to allow claims or even the use of the word “probiotic” on packaging. With a number of heavy hitters from the supply chain – such as Kerry – being attracted to probiotics, I’m confident that we are only a few years away from the Promised Land.

Take the opportunity to save up to GB£2,100 when you pre-order our forthcoming Immunity hot topic report before 31 August! This essential report will review a number of categories including antivirals, immune supplements and vitamins C & D, and explores the latest launch activity, plus much more. To pre-order your copy with the pre-publication discount, or to find out more, please contact melissa.lee@NicholasHall.com.

FDA rejects two NDI notifications for CBD products

The US FDA has rejected two New Dietary Ingredient (NDI) notifications for CBD as a dietary supplement. The ingredients submitted by both applicants – Charlotte’s Web and Irwin Naturals – were described as “full-spectrum hemp extracts”. FDA rejected the filings on the basis that CBD is the active ingredient in an approved drug (GW Pharmaceutical’s Epidiolex) and because the companies failed to provide sufficient scientific evidence to substantiate their submissions. In objection letters to Charlotte’s Web and Irwin Naturals, the agency said full-spectrum hemp extracts containing CBD “may not be marketed as or in a dietary supplement”.

According to CRN President & CEO Steve Mister, CBD regulation and mandatory product listing are the most important supplement-related issues pending for the VMS industry on Capitol Hill, as revealed in a recent panel interview organised by Nutrition Industry Executive as part of “Turning Point: Washington and the State of the Natural Products Industry“.

Mister also stated in a recent CRN press release that: “Despite very clear direction from Congress when it removed hemp from the Controlled Substances Act in 2018, FDA seems to have made up its mind not to support CBD in supplements and is now trying to justify it. That’s the only logical conclusion to draw from FDA’s actions – and its continued inaction … CRN has publicly endorsed HR 841, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021 and is actively lobbying Congress to do what FDA has refused to do – create a legal pathway to market CBD as a dietary supplement.”

Source: CHC New Products Tracker

Nicholas Hall commented: It was Lenin who spoke of taking “one step forward, two steps back”. Those of us with a less revolutionary nature aim for a more positive journey, with only the occasional backward glance! But regardless of the number of steps in either direction, the news that the FDA has rejected two important dietary supplement notifications for CBD seems highly retrograde. I fully endorse the view of the Council for Responsible Nutrition, which has denounced the FDA decision and urged Congress to act.

In CRN’s view, the FDA has mischaracterised these products as being the same as prescription CBD drugs and has “ignored, dismissed and downplayed ample evidence” that hemp products can be marketed safely. This seems like a re-run of the FDA’s inability to deal with the whole dietary supplements sector many years ago, which ultimately led to Congress’s stepping in with the all-important DSHEA legislation under which supplements are now regulated with a very light touch.

Review the latest new CBD products with CHC New Products Tracker. This ultimate competitive intelligence tool features 30,000+ launches and innovations, and products graded with a star rating. To set up your free demo, or to find out more, please contact waisan.lee@NicholasHall.com.

Q2 Results Round-up: Prestige, Bausch Health

Among the latest Q2 2021 results announced in the past week, two global Top 20 CHC companies – Prestige Consumer Healthcare (ranked No. 14) and Bausch Health (ranked No. 16) – reported strong performances. There was also dynamic Q2 growth reported by DSM Nutrition, Beiersdorf and several other marketers, pointing again to a strong recovery for the global CHC market in the second quarter of the year.

Prestige Consumer Healthcare revenues grew by 17.3% in fiscal Q1 2022 (1 Apr-30 Jun 2021) to US$269mn, the second highest level in the company’s history.

  • North America OTC Healthcare sales were US$242mn vs US$211mn in the comparable quarter. This was driven by a strong performance across a majority of key brands vs their respective categories and increased demand in certain Covid-impacted categories such as motion sickness and travel-related channel
  • International OTC Healthcare sales totalled US$26.8mn vs US$18.7mn. The increase related primarily to a rise in consumer activity in Australia, which drove a sharp spike in demand for Hydralyte and other brands disrupted by the pandemic, along with a foreign currency benefit of around US$2mn

Comment from CEO, Ron Lombardi: While the strong performance was partially attributable to lapping an unusual prior year period, the attributes of our leading brands and our continued market share gains over the past 12 months have us well positioned to benefit as consumer habits continue to shift and evolve. This leaves us well positioned to anticipate continued market share, revenue and earnings growth in the remainder of the year. In addition, we anticipate TheraTears and other brands, acquired [from Akorn] on 1st July 2021, to add incremental revenue and earnings to our base business momentum.

Source: Bausch Health.

Bausch Health reported a 26% rise in revenues (+23% both at constant currency and organically) in Q2 2021 to C$2.1bn (US$1.7bn), primarily owing to higher volumes resulting from the recovery from the pandemic. Eye health business Bausch + Lomb reported a 38% rise in revenues (+3% organically) to C$934mn (US$748mn). Within that, Global Consumer Products was up by 9% on an organic basis to C$341mn (US$273mn), with the US Consumer business up 20% driven by Ocuvite and PreserVision eye vitamins, coupled with the strong Lumify performance. Bausch reported that its share of the US eye vitamin category has grown from 75.6% in Q2 2020 to 77.9% in Q2 2021. The International Consumer business declined by 2%, mainly owing to the recall of a multi-purpose solution in Europe because of a quality issue at a third-party supplier.

While Global Consumer Products, which will be spun off with Bausch + Lomb into a separate business, showed healthy growth, it was slower than all other divisions. In an earnings call, Chairman & CEO Joseph Papa noted that the company, which is “dedicated to unlocking value for shareholders”, was making “good progress” with the spin off and had filed an S-1 with the US Securities & Exchange Commission. The company also announced that it would pursue an initial public offering for Solta Medical. This will result in the creation of Bausch + Lomb, a pure-play, integrated eye health company; Bausch Pharma, a global diversified pharmaceuticals business; and Solta Medical, a leading global provider in medical aesthetics.

We are pleased to announce that our APAC e-Conference 2021 will take place on 23 November! Join Nicholas and the team to Face the Future together. With speakers and sessions being added to the agenda soon, watch this space. To register, or to find out more, please contact elizabeth.bernos@NicholasHall.com.

Sanofi results point to strong CHC rebound in Q2

Sanofi has raised its full year 2021 EPS guidance after reporting a 12.4% rise in sales (at constant exchange rates) in Q2 2021 to €8.7bn (US$10.3bn). Consumer Healthcare sales increased by 11.9% to €1.1bn (US$1.3bn), primarily reflecting a low base for comparison in the same period last year, as well as a strong performance of Digestive Wellness and Pain Care. This largely offset a weak cough & cold season.

Sales in USA increased by 12.5% to €287mn (US$341mn); Europe rose by 7.7% to €319mn (US$379mn); and Rest of the World was up 14.3% to €483mn (US$573mn). Digestive Wellness growth (+36.8%) was powered by strong performances from probiotic Enterogermina, antispasmodic Buscopan, laxative Dulcolax and liver care treatment Essentiale. Mental Wellness (+23.9%) and Pain Care (+20.6%) also generated high CHC growth for Sanofi in Q2, while other categories were either flat or declining.

Source: Sanofi

Nicholas Hall commented: I wrote last week that the first Q2 results were highly encouraging, but that we needed to wait for the other top players to report. This week we review a crop of additional results, and they do indeed confirm that sales are significantly ahead of Q2 2020; but it is noticeable that the latest reports are consistent in reminding us that sales in Q2 2020 were relatively weak, although consumer purchases remained strong. The real comparison is with Q2 2019, measured against which growth is much more modest, in the range of 3% CAGR. This managing of expectations is perfectly understandable as none of the companies wants to create aspirations that will be difficult to meet later on.

So how do we interpret this data from the top players? On the one hand, it’s disappointing as 3% is below the 4.1% benchmark we’ve created to judge market growth – a combination of population increase and inflation. On the other hand, the industry has come through its worst crisis in a generation, and although a lot of attention has been paid to the high-growth categories of immunity and disinfection, many more categories were adversely affected. Furthermore, we know that not all the top players are representative as typically they underperform the market, with the highest growth typically coming from local and regional players.

My take on this, combined with the upturn in our own business I outlined last week, is that we are feeling our way forward to a revival in consumer demand and indeed industry confidence. But there is a lot of lost time and opportunity to make up, and it does seem that the top echelon of the industry is responding by adapting its structure (for example, the spin-off of GSK Consumer) or streamlining the business – Sanofi, for example, has disposed of a number of tail brands, either by divestiture or creating new distribution arrangements.

Find the perfect candidate to complete your team with assistance from Nicholas Hall’s executive recruitment service CHC TalentSelect. With over 40 years’ experience in consumer healthcare and an extensive network of contacts, we can help you find the right person for the job. To start your search, please contact maricar.montero@NicholasHall.com.