Though it still only accounts for a small share (just under 6%) of the global OTC market, Latin America remains by far the most dynamic region, with growth of 12% in the MAT Q2 2017 period. As the second-largest market in the region after Brazil, Mexico has seen its OTC growth accelerate in recent quarters thanks to rising consumer confidence throughout 2017, and its vibrant capital – Mexico City – was the venue for our 3rd Latin American Conference held last week.
Focusing on the theme, “Striving for Success in Latin America”, the conference was opened by Nicholas Hall and his annual keynote speech, highlighting key trends across the region – such as an increasing consumer preference for prevention, the widespread use of social media and a lack of regulatory improvement – and the impact these will have on the future of the industry.
Summarising his speech in 9 key points, Nicholas Hall said: “We must manage our brands in a more effective way if we are to sustain the current rate of growth, bearing in mind that Latina will probably be a late adopter of many features of the New Paradigm, including digital marketing for CHC products:
- With the flood of new products each year, it is essential that our brands stand out in a sea of mediocrity, by clear positioning that demonstrates both new functional benefits and emotional benefits
- Most successful brands in Latina and globally are old brands — the CHC market is unique in rejecting new brands in favour of those that are tried and tested; we should search for hidden gems that can be dusted off and given a new lease of life
- There is a constant reference from all quarters to the need for more innovation and I agree!! The best strategy is to bolt on a new ingredient, with an improved positioning, to a famous and trusted brand name
- There are many opportunities in LatAm: we have conducted Gap Analyses in many countries, including Brazil and Mexico. We found lots of open gaps with unmet or only partially met demand, many in adjacent categories, as most launches are in the mainstream categories rather than emerging niches — please contact my colleague Ekaterina Panteleeva (ekaterina.panteleeva@NicholasHall.com) for more information on the way we conduct Gap Analysis
- TV is still the main medium, but not without problems of loss of viewers, so we should test-market more for optimum spend
- The retail sector is consolidating fast, yet we don’t engage with the big chains through modern Key Account Management programmes, and the concept of Category Captaincy is hardly known; not least we must work with the big chains to manage the inevitable growth of private label
- There has been much talk of liberalisation, but the regulations are still quite drastic and are preventing more Rx-to-OTC switches, especially in Brazil
- Overall, the region is growing well at 10% (constant currency) in the past 5 years and is forecast to grow by 8% in the next 5 years
- So let’s work hard to maintain double-digit growth. To misquote President Trump, “Let’s make CHC great again!”
Monica Feldman also provided an insightful regional overview, reminding us of the major differences between certain markets (such as mass market vs pharmacy sales) and the growing prevalence of digital health. Hector Bolanos and Juan Knobloch both emphasised the importance of lobbying government for an improved regulatory framework in Mexico, while Henry Adler discussed diversification strategies as a means of avoiding regulatory delays in Brazil.
Rodrigo Arcila drew attention to Colombia’s dynamic Rx-to-OTC switch environment and rapidly-advancing national health system, while the day’s final speaker, Anne Engerant, focused on how OTC companies can help combat wider public health issues, such as antibiotic resistance, and promote responsible self-medication. Day 1 closed with a panel discussion moderated by Monica Feldman: Roy Bateman and Maria Barros y Muradas debated the mid-term future of the industry, including digitalisation and the evolution of POS, before the floor was opened to questions.
This week, Nicholas is back in India for the 2017 Annual Conference in association with CubeX. As consumers exist in a volatile, uncertain, complex and ambiguous marketplace, we can say that today’s self-care landscape is a VUCA world, which is why this year’s theme is Consumer Healthcare in VUCA World. With seats still available, you can secure your place now by emailing firstname.lastname@example.org