How will India’s CHC market perform in 2020?

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In its Q1 results, GSK cited the impact of retailer shutdowns in India on its Consumer performance, and the outlook for India’s CHC market in 2020 remains uncertain. Even before the Covid-19 pandemic, India reported slower growth for its consumer healthcare market in 2019 (+8.2%) compared to previous years, owing to India’s macro-economic weakness leading to slowing consumption. This has resulted in some marketers, such as Emami, to rethink launch plans and spurred others, including Dabur, to implement strategies to overcome the slump.

Two weeks ago, it was also reported that Blackmores has paused plans to enter India pending clarity about Covid-19 in the country. CEO Alastair Symington announced the decision at the Macquarie Australia Investment conference. He also stated that Australian sales of immunity products – such as vitamin C supplements and practitioner-only BioCeuticals ArmaForce – have boomed since the beginning of the pandemic, with Google analytics showing an upturn in online searches for information on boosting immunity as Australian households focus on maintaining good health.

blackmores-logo-pngWith India in the grip of the Covid-19 outbreak, Dabur has brought forward the launch of a range of Ayurveda-backed preventive healthcare and personal hygiene products. These include Tulsi Drops, a mix of five types of rare Tulsi leaves. With antimicrobial and antioxidant properties, the product claims to help boost immunity, relieve cough & cold symptoms and build respiratory health. In an interview with BusinessLine, CEO Mohit Malhotra said he believes the importance of personal hygiene and healthcare products for boosting immunity will grow in the global consumer mindspace, even post-pandemic.

In addition, several marketers have diversified existing derma brands into hand sanitisers to cater to increased demand. Emami has extended its flagship skin care brand BoroPlus with the launch of BoroPlus Advanced Anti-Germ Hand Sanitiser, the company’s first foray into that segment. Along with immunity supplements, antiseptics & disinfectants is clearly among the CHC categories in India achieving accelerating growth, with RB reporting in its Q1 results that Dettol was growing strongly in both Developed and Emerging Markets in Q1, with Covid-19 demand fuelling greater product penetration in UK, Australia, India and China.

Whether growth in Covid-fuelled categories like immunity supplements and antiseptics & disinfectants is enough to offset wider macroeconomic trends in India and supply issues caused by retailer shutdowns remains an issue of great interest for marketers active in India’s CHC market. At present, however, we’re forecasting a further moderate slowdown in the market in 2020.

Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon includes chapters on How to Innovate, Rx-to-OTC Switch, e-Commerce and Digital Engagement, to name just a few of the key trends explored in the report. Written by Nicholas himself, you can also upgrade your purchase to include a customised webinar. To find out more or to purchase your copy, please contact melissa.lee@NicholasHall.com.

Q4 update: Middle East & Africa highlights

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One key feature of your CHC DASHBOARD subscription is exclusive reporting on the consumer healthcare market in the Rest of World region, predominantly the Middle East & Africa. This dynamic region now accounts for almost 7% of the global CHC market, and produced continued strong growth in 2019, with sales up 7.0% to total US$9.6bn. Three countries in the region – South Africa, Turkey and Saudi Arabia – rank 20th, 24th and 25th respectively in terms of CHC market size.

Company Watch: Unsurprisingly, dominant global No.1 GSK is the leading CHC marketer in the region, as it is in all regions except Latin America. Multinationals Sanofi, Bayer and RB also feature in the regional Top 5, and each of these companies produced growth in 2019 in excess of the regional average of 7%. South Africa’s No.1 CHC marketer Adcock Ingram is the only local company to feature at the top of the rankings, while Abdi Ibrahim sits just outside the Top 5.

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Category Watch: Strong growth for analgesics (+8.1%) and Derma (+8.1%) helped ensure the region’s impressive rise in 2019. Three of the Top 5 regional analgesic brands – Panadol, Voltaren and Grand-Pa – are marketed by GSK, while RB markets another of the Top 5 regional CHC analgesic brands, Nurofen. As for Derma, a strong upturn for the leading dermatologicals category in the region, wound healers (+11.9%), was powered by Bayer’s Bepanthen / Bepanthol and Madecassol brands.

Brand Watch: Thanks to M&A activity in recent years, GSK now markets four of the Top 10 brands in the region, with No.3 Otrivin and No.8 Centrum added to the company’s existing key brands, Panadol and Voltaren. RB also markets multiple brands in the regional Top 10, with analgesic Nurofen, antacid Gaviscon and sore throat remedy Strepsils all featuring at the top of the rankings. However, the fastest-growing brand in the Top 10 in 2019 was Galderma / Nestle’s eczema & psoriasis treatment Cetaphil.

We are pleased to announce that Nicholas Hall’s CHC Yearbook 2020 is now published digitally, with print copies landing on desks next week! With the latest facts & figures, it offers the most up-to-date and fully-informed picture of the CHC industry around the world. To order or explore digital licence and multiple copy discount options, please contact melissa.lee@NicholasHall.com.

Highlights from the Q4 update

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The latest quarterly report on the global CHC market is now available on the CHC DASHBOARD website, including data & trends on the market’s performance at a global, regional and country level (for all 63 markets) in the year to end-December 2019. Here we highlight some of the key topline trends from this update, selecting one major global development from each of our company, category and brand watch sections.

Company Watch: Stada enters the global Top 20

While the list of global Top 5 CHC marketers remains relatively stable, one company that shot up the global rankings in late 2019 thanks to M&A activity, and now claims the No.11 position worldwide, is Stada. The German marketer agreed two major deals in November 2019 that elevated it into the global Top 20. First, as part of Takeda’s goal to divest around US$10bn in non-core assets, Stada bought around 20 selected OTC and Rx products marketed in Russia, Georgia & CIS countries, for US$660mn. Secondly, Stada entered into an agreement to acquire Walmark from Mid Europa Partners for an undisclosed sum. With global No.9 Takeda reportedly now planning to sell its wholly owned OTC subsidiary, Takeda Consumer Healthcare, Stada may feature soon among the Top 10.

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Category Watch: Analgesics already accelerating before Q1

Driven by accelerating growth in North America and Europe in Q4, analgesics recorded an upturn of 4.7% in 2019, ensuring the category’s best performance in three years. This trend looks set to accelerate even further in Q1 2020, with various top marketers reporting very strong analgesics growth for their key brands in the latest quarterly results, as a result of the Covid-19 pandemic. In 2019, topical analgesics still grew faster than systemics, though the latter showed the strongest improvement in growth, powered in particular by upturns in USA, Brazil and Germany.

Brand Watch: Vicks and Tylenol race ahead

Only two CHC brands generate more than US$1bn in sales globally – P&G’s global No.1 Vicks and J&J’s global No.2 Tylenol – and both also grew more than twice as fast as the global CHC market overall in 2019. The latest company quarterly results indicate that both brands have shown further acceleration in Q1 2020, driven in particular by gains in North America.

Thank you to everybody who attended Nicholas’ CHC Trends Webinar! If you were unable to join live, you can now purchase a recording of the full discussion, and submit up to 3 questions via email. To find out more or to purchase your copy of the recording, please contact elizabeth.bernos@NicholasHall.com

Survey shows growing support for pharmacies in Europe

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According to a YouGov survey, commissioned by Stada and focusing on four European countries (Germany, Italy, Spain and UK), hope and confidence in healthcare professionals has grown in the wake of the Covid-19 crisis, though the picture does vary from one country to the next. With measures to reduce coronavirus infection rates defining daily life, Spaniards show the greatest concern for their health (51%), while people in Germany, Italy and UK are less worried (36-39%).

Germans (18%) are least likely to believe their healthcare system has absolutely proven itself, while 47% of Spaniards gave their health system top marks, followed by the UK (35%) and Italy (29%). Spaniards (32%) and Italians (28%) are most likely to have avoided visiting pharmacies vs only 14% in Germany and 19% in UK. In total, one in five people have greater respect and more recognition of what pharmacies provide on a day-to-day basis.

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The potentially good news for community pharmacies in Europe is that the coronavirus crisis does not appear to be leading to a large number of people ordering more medicines online. In fact, only 6% of those surveyed say they are taking this action. However, it will remain to be seen how consumer attitudes to internet & mail order purchasing of OTCs change in the coming years, especially in Europe. According to DB6 VP, Celine Waller, internet & mail order is expected to account for 19.2% of the total CHC market within the next decade, more than doubling its share from 9.4% currently. 

The survey also highlighted the likely impact of Covid-19 on the VMS market in Europe. UK consumers and Germans are generally not motivated to take more vitamins or similar products (<9%). In Italy and Spain, the readiness to do so is higher, particularly for vitamin C, D and multivitamins (13-15%). Paying greater attention to nutrition and taking more exercise hold greater attraction in the southern countries than in Germany and the UK, where people are more likely to say that the coronavirus situation has not changed their habits. 

Ensure that you have registered to join Nicholas online for a special webinar presentation with Q&A, which will take place next week! On 29 April at 10:00-11:30 UK time, Nicholas will review 2019 CHC market performance, explore the impact of Covid-19 and identify growth prospects for the future. For those unable to join, there will be the option to purchase a recording and submit up to 3 questions via email. To find out more or to register to join, please contact elizabeth.bernos@NicholasHall.com without hesitation!

CHC market forecast to hold up well in 2020

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Forecasts released by Nicholas Hall’s CHC sales database DB6 project that the global retail CHC market is expected to slow to 3.5% in 2020 amid the Covid-19 pandemic.

  • Analgesics are expected to increase to 6.1% driven by strong sales of paracetamol-based systemics, while topicals are forecast to slow to 3.3% in spite of the switch of Voltaren in USA
  • CCA is projected to be the fastest-growing category with an increase of 6.5% boosted by coronavirus and reports of a high incidence of seasonal cold & flu at the start of 2020
  • GIs (+0.4%) and Derma (+0.8%) are expected to remain static as consumers cut back on non-essential purchases amid the tougher economic environment
  • Antiseptics & disinfectants are forecast to buck the low-growth trend in derma with a double-digit increase
  • Lifestyle CHC sales are predicted to slow to 1.8%, with erectile dysfunction (+13.2%) and sedatives & sleep aids (+7.8%) bright spots in an otherwise challenging category
  • VMS sales are expected to maintain growth of 3.4% with anticipated gains in some subcategories — notably vitamins C & D, zinc and immune supplements, offset by a deceleration in some other subcategories

The market is expected to bounce back in the longer term with a forecast CAGR 24/19 of 4.3% and CAGR 29/24 of 4.7% driven by switch, most notably of erectile dysfunction and daily oral contraceptives. CBD is not included in these retail forecasts.

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DB6 VP, Celine Waller writes: The Covid-19 pandemic has prompted an unprecedented surge in sales of certain CHC products as consumers have stocked up on essential medicines and sought products to protect their health. However, latest data points suggest that this spike has been short-lived with the market now stabilising and in some cases receding. We expect this trend to continue over the next few months, leading to a slight slowdown in CHC retail sales across 2020 in its entirety, although of course the industry is expected to be far more resilient than many others.

However, this only tells part of the story – as consumers are unwilling or not permitted to leave their homes, we expect an acceleration of the channel shift from bricks & mortar to e-Commerce. CHC sales in the Internet & Mail Order channel are forecast to increase by 22.5% in 2020. This will boost growth of the holistic “all channels” view of the market, which also includes CBD, to 5.0% in 2020 (an improvement on 4.3% in 2019). Internet & Mail Order is expected to account for 19.2% of the total CHC market within next decade, more than doubling its share from 9.4% currently. 

We are pleased to announce the latest DB6 market forecasts are now available! With over 150,000 pieces of data across 63 markets, DB6 now includes topline data across all channels of distribution, including e-Commerce! To find out more about our extensive database or to set up a free demo, please contact Kate.Holdcroft@Nicholashall.com.

Global CHC market up 3.9% in 2019

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Figures released by Nicholas Hall’s sales database DB6 show that in 2019 the global CHC market maintained its growth trajectory, increasing by 3.9%. Growth in USA improved, driven by a strong performance in CCA. Systemic cold & flu (+6.2%) performed particularly well, owing to higher incidence of pathologies.

Latin America was the best-performing region (+9.4%) with both Brazil and Mexico advancing by high single digits. Growth in Europe slowed to 2.6% with slight improvements in Germany, Italy and UK held back by decline in France and low growth in former powerhouse Russia. Asia-Pacific remained weak (+4.1%) with flat sales in Japan and Australia offsetting high single-digit growth in India. Leading APAC market China grew by 5.1%.

Analgesics was the fastest-growing category with a rise of 4.7%. VMS slowed to 3.5%, partly owing to a consumer shift to e-commerce. Derma (+3.1%) was the weakest category albeit with an improvement on its 2018 performance. 

Country

YE 2019 sales ($bn)

19/18%

USA

34.4

3.2

China

26.2

5.1

Japan

8.1

0.5

Germany

5.5

2.3

Russia

5.4

1.0

France

4.4

-1.2

Italy

4.2

3.0

Brazil

3.8

9.1

India

3.5

8.2

UK

3.0

3.0

GLOBAL CHC

141.5

3.9

The broader CHC market, encompassing all channels and CBD, increased by 4.3%. Direct sales declined owing to tighter regulations and negative consumer perception. Internet & Mail order slowed slightly as marketers adjusted to the inception of the E-commerce law in China (although still achieved growth of 12.4%). Meanwhile the nascent CBD market was the fastest-growing of all categories with sales up by 44.2%. 

Nicholas Hall’s Abroad Thoughts from Home: 2019 was somewhat disappointing, with growth of under 4% for the second year running. As before, our industry suffered from a lack of switches and the tailing off of expansion in the Emerging Markets, with weak results in Asia, although Brazil and India are notable bright spots.

All eyes will be on 2020 and the impact that Covid-19 will have on the CHC market. My colleague Celine Waller writes: “The DB6 team is currently reviewing early indications of market performance [some of which are reviewed in this week’s edition] and analysing to what extent the reported boost to immune supplements, paracetamol and antiseptics (among other categories) will be sustained throughout the year and whether it will be offset by a slowdown in other categories.”

The latest DB6 figures and general industry performance over 2019 will be reviewed in a special webinar session hosted by Nicholas, taking place on 29 April. To find out more or to register, please contact elizabeth.bernos@NicholasHall.com.

Assessing Covid-19’s impact on the VMS industry

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Despite various countries going into lockdown, governments are still allowing “essential” services and businesses to remain operational, putting the role of the dietary supplements industry in the spotlight. In some countries, like New Zealand, supplement marketers are allowed to maintain their operations as long as they are supplying “essential” businesses, such as pharmacies and supermarkets. However, according to the guidance provided by New Zealand Natural Health Products, health food stores do not fit the description of “essential” businesses.

The situation is similar but more complex in the USA, home to the world’s No.1 VMS market. While essential food and drug suppliers are open for business during Covid-19 restrictions, industry leaders are working to ensure that the same applies to speciality health food stores and cannabis dispensaries. No specific federal regulation is in place, but “essential business” status is being determined at state and local level. While California most decisively classified workers supporting cannabis and dietary supplement retail as essential workers, and Illinois added licensed medical cannabis dispensaries and cultivation centres to its essential healthcare operations list, not all states have set such guidelines.

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In a letter to state governors, industry associations including the Consumer Healthcare Products Association urge that supplement supply chains remain open in all states, arguing that now more than ever, consumers need essential nutrients to stay fit and healthy and proactively reduce their risk of chronic diseases without burdening an already overstretched healthcare system. They write: “As each of you plan your own approach to this challenging issue, we respectfully request you mirror White House / Centers for Disease Control & Prevention guidelines and make special accommodation for critical infrastructure industries that specifically include not only conventional foods but all subcategories of food, including dietary supplements, infant formulas, medical foods and spices & flavours.”

As for how the Covid-19 crisis will affect the VMS market, it’s clear that some categories stand to benefit more than others. Herbal & natural immune stimulants and vitamin C supplements are likely to see the biggest boost, as long as supply chains can be maintained. In certain markets, such as India and China, there is likely to be a rise in sales of country-specific natural remedies (Ayurvedic medicine and TCM) positioned for immunity support, though marketers will have to be wary of government clampdowns on products that are claimed to prevent or cure Covid-19.

For a full analysis of Covid-19’s impact on the global CHC market, pick up a copy of our all-new Hot Topic review Coronavirus 2020 and its potential impact on CHC from Nicholas Hall’s CIMA division. Buyers of this report will also receive a situation update in six months time. For more information, or to purchase your copy, please contact melissa.lee@NicholasHall.com.

e-Commerce Developing Fast in Southern Europe

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As more and more countries go into lockdown to enforce social distancing, the way that consumers do their shopping is of course having to change dramatically. Some countries are better adapted to this change than others – according to a recent report in the Financial Times, southern European countries like Italy and Spain currently only have low e-Commerce penetration, with respective shares of 4% and 5% of total retail revenues (prior to the Covid-19 pandemic).

France (10%) has a higher share than the two countries at its southern border, but still lags behind other markets in Europe (20% in the UK) and globally (36% in China). However, this situation looks set to change fast, with Covid-19 leading to a revolution in e-Commerce sales of groceries in southern Europe – for example, according to the FT report, supermarket chain Carrefour stated that its online customer base in Italy has already doubled to 110,000. Is this a trend that will outlast the current crisis?

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And what impact will Covid-19 have on online sales of consumer healthcare products? Our recently published Digital Marketing & e-Commerce Report outlined the Top 20 leading internal & mail order markets for CHC products, with China and the USA the clear leaders, followed by Japan, Germany and the UK. Inevitably, the projected growth rates for 2020 will have to be revised, especially given this fast-changing crisis could also lead to changes in regulations governing the online sale of OTC medicines.

For example, Europe’s largest e-Commerce pharmacy group, Zur Rose, today submitted a request to Switzerland’s Federal Office for Public Health calling for a temporary exception that would allow mail order sales of OTC cold & flu medicines (at present, all non-prescription medicines can only be sold by mail order if specifically approved by a doctor). As well as owning Germany’s best-known pharmacy brand, DocMorris, Zur Rose is also active in France and Spain, and could be at the forefront of overcoming strict regulations governing the sale of OTC-registered medicines in those markets too.

For an in-depth look at the rising power of e-Commerce in the CHC market, order a copy of Digital Marketing & e-Commerce: Tapping the Potential of Online Sales and Digital Promotion in Consumer HealthcareThis report also explores social media, which CHC brands are employing effective digital marketing strategies, and the opportunities and challenges e-Pharma faces. For further details, please contact melissa.lee@NicholasHall.com.

Covid-19: France advises against ibuprofen to treat symptoms

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France’s Health Minister Olivier Véran delivered a message via his Twitter account over the weekend, advising against taking anti-inflammatory medicines (ibuprofen, cortisone, etc) to treat Covid-19 symptoms, as they could be an aggravating factor for the infection. His advice for those with a fever was to take paracetamol instead. Patients already on anti-inflammatory drugs for other illnesses, or anyone with any questions, are advised to seek advice from their doctor.

Public health interventions like this, with directives specifically citing which OTC medicines to take or not take, are rare and so the story was picked up by major news outlets in the UK (Guardian), USA (New York Times) and elsewhere. According to a report in The Local, Véran’s tweet prompted several members of the public to ask for the source of his reasoning on not taking ibuprofen to treat Covid-19 symptoms. The main concern appears to be that anti-inflammatories have an “immunosuppressive effect“, plus the background in France is that medicines agency ANSM has already removed medicines containing paracetamol, ibuprofen and / or aspirin from the self-selection list in January 2020 to reinforce the advisory role of the pharmacist and guarantee safe use.

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Meanwhile, the effect of the Covid-19 pandemic on sales and availability of painkillers in other markets is already becoming evident, with UK retailer Boots imposing a limit of two items per customer on cough & cold and pain medicines and US marketer J&J reporting a spike in demand for its Tylenol range and other self-care products. In the wake of the Covid-19 outbreak, and India’s decision last week to restrict the export of some ingredients (including paracetamol), there have been fears of shortages and disruptions to supply chains, but J&J said it did not anticipate a shortage of Tylenol and that it was taking all possible measures to maximise availability of its consumer healthcare range.

The good news is that we have extended the campaign entry criteria and deadline for our 2020 Marketing Awards! Coinciding with the new event dates, the Awards will now be presented on 30 September during our 31st European Conference in Athens on 29 September–1 October 2020. If you’re proud of your latest campaign or brand, ensure that you enter before the new deadline of 14 August! For more information on entry criteria, contact jennifer.odonnell@NicholasHall.com without delay.

Assessing Covid-19’s impact on the events and CHC industry

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Seven weeks after we first covered the news of the coronavirus (Covid-19) outbreak in China in this blog, it is now very clear that the rapid spread of Covid-19 is having an increasing impact on economies, industries and businesses worldwide. Workers in many countries are being urged to self-isolate if they experience symptoms, while pharma players, including Mylan, which reported FY 2019 results last week, see a potential impact on their finances. Companies such as Sanofi, GSK, Nestle and L’Oreal are either telling employees to avoid business travel or postpone trips.

Airline shares are in freefall and the global events industry is being hit particularly hard, with organisers cancelling or postponing numerous conferences and trade exhibitions; New Hope Network (Informa) posted the following on its website: “The many conversations, emails, text messages and social media posts that [we have] engaged with since we communicated the hard decision to postpone 2020 Natural Products Expo West due to the Covid-19 situation tell us that many in the natural & organic products community seem to be breathing a sigh of relief.” However, it will not be alone in asking: “What’s next?”

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Nicholas Hall Writes: We have taken the painful decision to postpone our flagship Athens meeting from late April to 29th September-1st October. For delegates who roll over their bookings, and for new delegates, we are offering a live-streamed Global Trends presentation / Q&A based on the latest DB6 data at 10:00 CET on 29th April, which under happier circumstances would have been the start of the Athens conference. Full details of this and the postponed conference dates will be circulated soon. I look forward to e-meeting many of you on 29th April and greeting you in person in Athens in September, by which time we hope to be cleared by the Chief Medical Officer to start the meeting in the traditional Nicholas Hall Family way with handshakes all round. I’m truly looking forward to “business as usual”.

Our new Hot Topic report puts the Covid-19 pandemic in context. My colleague Nina Monk tells me that the coronavirus outbreak is currently in a containment phase, although it is likely that individual countries will shortly begin implementing mitigation / treatment programmes as person-to-person transmission within infected communities increases. This will affect where people go to seek treatment (hospital vs pharmacy) and what treatment is given (Rx vs OTC). The impact on the CHC market is already becoming apparent with sales of antiseptics & disinfectants, antibacterial hand gels, face masks, immune-boosting supplements and OTC antivirals all seeing significant spikes in sales.

Unlike SARS, which was more severe but relatively short-lived, Covid-19 is likely to drag on into the summer months in the Northern Hemisphere, when the warmer weather may lessen its virulence. The likely impact on the global CHC market is hard to judge, but in China sales at point-of-sale could be down by the equivalent of one full trading month this year. e-Commerce will benefit, although there will be disruption of all stages of the supply chain. 

Examine the potential impact of coronavirus on our industry in a Hot Topic review from our CIMA division, which is published today. To purchase your copy of Coronavirus 2020 and its Potential Impact on CHC, or for more information, please contact the CIMA General Manager, nina.monk@NicholasHall.com.