Probiotics behind VMS upturn in 2017

OTCINACTION

In the three prior years (2014-16), sales of vitamins, minerals & supplements grew at a slower pace than the global OTC market as a whole, but this trend changed in 2017, when VMS achieved a slightly higher rate (+4.2%) than the global average (+4.1%). VMS was the only major OTC category to see growth improve in 2017 – analgesics, CCA, Derma and Lifestyle OTCs all reported significant slowdowns – and three of the Top 10 best-performing OTC subcategories in 2017 were in VMS: Probiotics (+9.4%), tonics & cure alls (+7.6%) and single vitamins (+5.8%).

Probiotics added another US$330mn in sales in 2017 to create a global market of US$3.8bn, and have maintained high growth thanks to new products with unique positioning, innovative delivery formats and growing awareness of the benefits of probiotics in fast-growing countries like Brazil (+11.7%) and India (+10.4%). Although probiotics growth slowed in several mature markets in 2017, such as Italy, Japan and Germany, it remains high in the world’s two largest arenas for probiotics sales: USA (+10.2%) and China (+14.1%).

Top 5 probiotics markets 2017

One of the hotbeds for probiotics innovation in Q2 2018 has been India. Setu (OmniActive Group) recently launched probiotic supplement YourGut, positioned to assist in balancing intestinal microflora for overall digestive and immune health. Formulated with 9 bifidobacteria and lactobacilli strains, at a dose of 15bn CFUs, YourGut is available in tubs of 30 vegetarian capsules.

Another recent launch came from Sundyota Numandis with SuperFlora GG, containing Lactobacillus GG (ATCC 53103), which can be administered to newborn babies from 1 day old to treat gastroenteritis and antibiotic-associated diarrhoea. Rakyan Beverages, marketer of the Raw Pressery range of cold-pressed juices, also announced last week that it was rolling out a new probiotic drink in India. Thanks to this spike in new product activity, India’s probiotic category looks on course for an even stronger year in 2018.

To find out more about the innovations that are supporting this high growth in the probiotics market, contact Owen (owen.hartnett@nicholashall.com) to arrange your free trial of our OTC New Products Tracker database.

Advertisements

ROW growth accelerates to 6.7% in 2017

OTCINACTION

One of the core benefits of your OTC DASHBOARD subscription is unrivalled coverage of the OTC market in the Middle East & Africa. Sales in this region now total US$8.8bn, following an impressive 6.7% upturn in 2017, and below we highlight some of the key recent trends & developments in this dynamic region.

Screen Shot 2018-05-14 at 09.53.32.png

Two of the region’s Top 5 markets, Turkey and South Africa, feature in the global Top 20 and both outpaced the regional trend in 2017. Turkey’s OTC market was particularly dynamic, partly driven by price inflation but also rising volume sales, thanks to growth in consumer spending and also strong investment from multinational OTC marketers, who compete with well-established local companies like Abdi Ibrahim and Santa Farma.

As well as double-digit growth in Turkey, where Bayer is the No.1 marketer, there were also strong performances from Algeria (+10.0%), Egypt (+16.4%) and Nigeria (+8.2%). GSK occupies a strong position in Egypt and Nigeria, thanks largely to the popularity of painkillers such as Panadol, and is committed to expanding its OTC portfolio and widening distribution.

Sanofi is the leading OTC marketer in Algeria, again thanks to a well-established analgesics portfolio (Doliprane and Aspegic), in addition to a fast-growing CCA range. Overall, GSK, Sanofi and Bayer are the standout OTC marketers in the region, joined by South Africa’s No.1 Adcock Ingram and RB.

Screen Shot 2018-05-14 at 10.17.51.png

For a deep dive into our Q4 2017 data and trend reporting on all Middle East & Africa markets, be sure to log on to the OTC DASHBOARD website or app (which can be downloaded on Apple or Android smartphones).

Q4 2017 Update Now Live!

We’ve just updated the OTC DASHBOARD website with full-year 2017 data and trends for all regions and all 64 countries that we track worldwide. There’s no better way to start exploring this vast reserve of information than our new homepage, which provides at-a-glance global OTC sales by region, marketer and category, as well as an interactive global map with data on the Top 20 countries. Here, we round up some of the highlights from the latest Q4 2017 update.

Screen Shot 2018-05-02 at 11.22.21.png

One of the major trends in Q4 2017 was the drop-off in global OTC growth. A 4.1% rise in 2017 was the lowest annual growth for the global OTC market since 2014, with Europe (+2.7%) and North America (+2.9%) at the heart of the slowdown. Asia-Pacific was up 4.3%, while the two smallest major regions – Latin America (+11.8%) and the Middle East & Africa (+6.7%) – grew fastest.

Looking at categories, Derma (+2.5%) underperformed most, while CCA growth slowed to just 4.3% by end-2017, with vitality continuing to drain out of allergy remedies (+3.1%). Cough remedies (+5.4%) and systemic cold & flu (+4.0%) also reported much lower growth by year-end, especially in Europe.

Screen Shot 2018-05-02 at 11.29.42.png

The overall shares of the global OTC market by major category remained stable in 2017. Analgesics (+4.5%) and Lifestyle OTCs (+4.5%) were the main driving force behind OTC growth, and the Rx-to-OTC switch of Viagra Connect in the UK in 2018 bodes well for development of the erectile dysfunction category. GIs advanced by 4.3%, while VMS (+4.2%) produced another year of solid growth.

As for marketers, the Top 5 remained unchanged in 2017 despite further M&A activity and speculation; in Pfizer’s earnings call yesterday, CEO Ian Read said he has not yet received an acceptable offer for the OTC business and may decide to retain it. The major recent M&A news was that P&G has agreed to buy Merck KGaA Consumer Health and at the same time to dissolve its PGT joint-venture with Teva. By our calculations, the new P&G will rank 7th in the global OTC marketer rankings by value, and the new Teva (assuming it retains its OTC business) will rank 12th.

Screen Shot 2018-05-02 at 11.29.57.png

Other highlights:

• Looking at OTC brand rankings, analgesics Tylenol and Advil – both of which are former global No.1 OTC brands – now trail by a fair distance behind new No.1 brand Vicks, which grew by 12% in 2017

• Abbott moved ahead of Merck KGaA to claim a spot in the global OTC Top 20, following dynamic growth of 10.6%, including double-digit rises for laxative Duphalac in Russia and antidiarrhoeal Pedialyte in the USA

Log on to OTC DASHBOARD now for access to all Q4 2017 data and trends.

Barcelona Conference Report

In this week’s blog, we report back from Nicholas Hall’s OTC INSIGHT 29th Conference & OTC Training Academy Workshop in Barcelona, the first to ever see Nicholas Hall’s keynote address livestreamed to an audience across the globe via YouTube.

Nicholas’ opening address to delegates explored the 4 elements of PACE, which all marketers need to adopt in order to increase their pace and move faster:

P = Pharmacy and retail, the bedrock of the OTC market = 80% of revenue outside US (70% if inc US)

A = Adjacency, reaching beyond the 6 core categories of OTC and seeing where we can branch out (i.e. diabetes, Alzheimer’s, hearing screeners, etc)

C = Consumer (Nicholas was joined on stage by Luca Pagano of BeMyEye who explored how social changes have impacted how and when people buy, and the power of crowdsourced insights to transform in-store execution)

E = Engaging with the consumer and e-commerce (as Nicholas said, the topic of e-commerce would be deserving of a whole conference of its own)

PACE.png

Nicholas Hall encourages OTC marketers to pick up the PACE

On Day 2, another packed schedule of speakers was rounded off with David Blair, Google’s Head of Industry Heath. His presentation to delegates explored three major trends which are impacting everything we do: chip, cloud computing and AI / machine learning.

Today we practically live online, and the smartphone is now the consumer’s main device – through which nearly all traffic passes – a fact that is having a massive impact on the health industry. Blair said that voice search is going to become the next key driver and could have implications for healthcare marketing (see our recent blog on this topic), as we move from Point of Care, where we expect the consumer to wait for appointments, visit the doctor and then the pharmacist, to a space where we can have care anywhere.

In 2017, there were 160bn searches for healthcare globally via Google, with 2bn alone just for the allergy category! Almost two-thirds of these searches were conducted via a mobile device. There was also an increase for searches for “best non-drowsy allergy medicine”, “best cold & flu medicine” and so forth. Last year, Google also saw a 60x increase in searches for “near me”, highlighting the shift towards immediacy.

David Blair collage.jpeg

Google’s David Blair closes out proceedings

For more updates on consumer healthcare trends, and a full round-up of Day 1 and Day 2 proceedings, be sure to follow Nicholas Hall on Linkedin

Competition rises in sleep devices category

OTCINACTION

Now available to buy in the US and selected European markets via the Nokia Health store, the new Nokia Sleep device is a sensor pad that can be placed under the mattress to monitor sleep patterns, track heart rate and detect snoring. 

It also syncs up to Nokia’s Health Mate app and provides smart home control via IFTTT (if this then that) integration, which allows for automatic thermostat regulation and light adjustment. The app also allows the user to view their Sleep Score to get an insight into what makes a good night’s sleep and how to improve night after night.

Packaged as a sensor pad with USB charger, Nokia Sleep retails at $99.95 (USA), €99.95 (Europe) and £99.95 (UK), and the brand website indicates that there are plans to roll out the product in key Asia-Pacific markets like China and Japan.

 Nokia Sleep.png

Facing stiff competition in the smartphone market from Apple, Google and Chinese manufacturers, Nokia – the former king of mobile phones – is looking to further diversify its business.

Nokia Sleep was due to launch earlier this year, but news of a strategic review of Nokia’s Digital Health business in February 2018 put the rollout in doubt. Nokia will be monitoring closely how this new product fares against established competitor Beddit, which was acquired by Apple in 2017.

Whether you want to find out more about the latest innovations, benchmark the competition or simply keep abreast of new launches, Nicholas Hall’s extensive OTC New Products Tracker is an essential competitive intelligence tool that you simply must trial. Subscribers can also benefit from a newsletter highlighting the key product innovations affecting the industry. Find out more or set up your free trial today by contacting david.redford@NicholasHall.com

Will the new WebMD Symptom Checker impact self-care?

WebMD has recently launched a new version of the iconic Symptom Checker. The tool, which has been available since 2005, has been redesigned to make it easier for the user to operate and help generate more accurate results.

The site receives on average 75mn visits per month and provides people with access to the latest health information, news and trends. The Symptom Checker aims to help people find out more about possible conditions to be best informed on what steps to take next.

The new WebMD Symptom Checker features an improved interface designed to provide visitors with a simple and seamless experience, powered by a professional-grade diagnostic engine used by physicians to support their point-of-care decisions.

Screen Shot 2018-04-09 at 09.37.54.png

WebMD’s new, improved interface

The new Symptom Checker features three times more symptoms and potential conditions than the previous version. WebMD has also added a search bar, which allows users to manually type in how they are feeling rather than having to connect specific areas of the body with specific alignments, for example in the case of general bodily aches.

WebMD redesigned the tool based on feedback from WebMD users, medical experts and leading academics and researchers. Additionally, an article by The British Medical Journal regarding symptom checker tools was also consulted.

Steven L. Zatz, CEO of WebMD, said: “Our redesign reflects our commitment to continually improving the experience of consumers when seeking answers to their health questions. We take very seriously our role in the consumer healthcare experience, and we have enhanced the tool to deliver the most accurate results possible.”

GSK, RB pull out of running for Pfizer OTC

Last week was a dramatic one for M&A news in the OTC industry. In the days running up to the deadline for binding offers for Pfizer Consumer Healthcare, both RB and GSK announced they had withdrawn from the process. 

RB’s CEO, Rakesh Kapoor, said: “Our priority remains organic growth, including the completion of the integration of Mead Johnson Nutrition and creating further value from re-organising into two new business units — Health and Hygiene Home … An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria and an acquisition of part of the business was not possible.”

GSK’s CEO, Emma Walmsley, later commented: “While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation.”

All three companies are in the Top 6 globally, and a tie-up between No.6 RB and No.5 Pfizer would have created a new No.1 globally. Meanwhile, if the current No.1 GSK had acquired Pfizer, its lead would have been significantly enhanced – see the chart below for a sense of what might have been (assuming both GSK and Pfizer would not have had to make divestments).

Pfizer and GSK.png

Investors have reacted positively to the news of no M&A deal, sending shares in both RB and GSK higher. In the latter case, some had been concerned that the potential US$20bn deal could have distracted from GSK’s focus on pharma, and jeopardise its dividend.

After RB’s withdrawal, Pfizer stated that it “continues to evaluate potential strategic alternatives for the CH business, which include a spin off, sale or other transaction, and Pfizer ultimately retaining the business. We have not yet made a decision, but continue to expect to make one in 2018.”

Nicholas Hall, in Friday’s OTC.Newsflash, commented: “I recently addressed a group of private equity and hedge fund investors about the future of CHC, and all they wanted to talk about was RB, GSK and the disruption of the industry by private label and Big Tech. The investment community is very concerned about the growth prospects of the CHC industry, and that is one of the reasons strong signals were sent to RB not to overpay for Pfizer Consumer Health; as we now know RB subsequently pulled out of the bidding. Briefly, that left “the last woman standing”, GSK’s Emma Walmsley, but GSK like RB was unprepared to pay the $20bn that seems the generally-accepted valuation for PCH. As readers of this column know, my thinking had tilted towards “no sale” in the past few weeks, and unless there is a last-minute change of heart, the likelihood is that Pfizer will keep its CHC division and look at other options: retain and grow; spin off; make a j-v.”