RETAIL CHC GROWTH HITS 7.2% IN 2022

The year-end 2022 update from DB6 shows the global retail market advanced by 7.2% in the 12 months to end-December 2022. Globally, this represents yet another strong single-digit result, slightly ahead of the MAT Q3 2022 results (+7.0%). In another somewhat turbulent year, impacted by a surging cough & cold market, post-Covid recovery, global economic crises and continuing conflict in Europe, we look below in more detail at how the market has performed.

• Cough, Cold & Allergy continues to be the key driver behind global growth; the second largest category returned sustained double-digit growth, advancing 18.2% in the current reporting period. Excluding allergy remedies, once again all subcategories observed double-digit increases, with standout performances in cough remedies (+26.3%) and systemic cold & flu and systemic decongestants, both growing at 21.6%.

• Analgesics (+7.6%) was the second-fastest growing major category to year-end 2022, driven by a double-digit increase in systemics (+10.3%), which continues to benefit not only from recommendations for OTC products to treat fever and pain following Covid vaccinations, but the uptick in cold & flu incidence. Topical formats continued on a slowing trajectory (+1.9%), with 4 out of 5 leading markets in decline.

• Gastrointestinals (+5.8%) was the third-fastest growing category, slowing marginally from MAT Q3 2022. Sustained robust performances from typically travel-associated subcategories including antinauseants (+13.4%) and antidiarrhoeals (+10.4%) spearhead the increase, while largest subcategories antacids and laxatives grew more modestly, progressing by 4.0% and 5.1% respectively.

• Lifestyle CHC slowed vs MAT Q3 2022 (+3.7%). The second-largest subcategory, sedatives & sleep aids (+3.1%), generated somewhat muted growth following significant gains throughout the pandemic, offset to some extent by steady growth in the largest subcategory, eye care (+6.5%), owing to growing awareness of device and screen-related dry eye, successful switches and NPD. Ear care was the fastest-growing subcategory and the only one to advance by double-digits (+11.8%), although its modest 2.1% share of the category means that this has minimal impact on the topline.

• Vitamins, Minerals & Supplements (+3.7%) continued to soften to end-2022, with several key subcategories slowing vs the previous reporting period. Immunity-related subcategories maintain positive growth but are abating: immune supplements (+6.3%) and vitamin C (+3.1%) are the best performing of these, while zinc flattens to 0.3%, albeit with a significantly higher value than pre-pandemic times. Elsewhere, ebbing growth in the largest subcategory, multivitamins (+2.5%), has muted overall category returns. Multi-functional ingredient magnesium was the strongest-performing subcategory to year-end 2022, advancing by 10.5%.

• Dermatologicals (+3.2%) remains the weakest major category globally but continued its path of improvement in 2022. Antiseptics & disinfectants remains negative in growth terms (-7.6%) but the decline is weakening as post-Covid correction continues and absolute sales are significantly higher than pre-pandemic levels. Excluding this subcategory, dermatologicals increased by 4.8%, with notable performances in lip care (+10.5%) and lice treatments (+10.2%), both recovering from negative Covid impact.

(Store Retail) Country	YEAR END 2022 sales (US$bn)	2022/21 (%)
USA	40.7	+4.9
China	30.2	+4.6
Japan	6.5	+5.0
Russia	6.1	+7.2
Germany	5.6	+11.7
France	4.7	+9.1
Brazil	4.6	+21.5
Italy	4.5	+10.8
India	4.2	+7.3
UK	2.9	+8.7
GLOBAL CHC	157.7	+7.2

^{Source: Nicholas Hall’s global CHC database DB6}

In terms of geographies:

• Europe (+9.5%) was the second-fastest growing major region globally (just behind Rest of World, which rose 9.8% driven by inflationary growth in Turkey), with several key markets maintaining double-digit growth, driven by sustained significant increases in the cough, cold & allergy category (+24.2%), as well as continued robust growth in analgesics (+9.6%). Second-largest market Germany accelerated by 11.7%, with other Big 5 Western European markets similarly displaying solid advances, notably Spain (+13.4%). Romania was the strongest-performing market (+18.0%) in the reporting period and now enters the Top 20 countries globally (18th) for the first time. Owing to exchange rate impact, Russia is now Europe’s largest market — in value terms, the market grew in line with the global rate (+7.2%), although declined by 5.4% in volume terms.

• Americas (+7.0%) saw growth in leading market USA remain below the global rate (+4.9%), but in sales terms the market has now crossed the $40bn mark, ending 2022 with an almost 26% share of global sales ($40.7bn). Sustained robust growth in cough, cold & allergy (+23.2%) helped to offset more subdued returns in other categories, notably a decline in vitamins, minerals & supplements (-1.1%). In Latin America, leading market Brazil continued to improve, ending 2022 with 21.5% growth and sustained increases observed across most major categories: cough, cold & allergy (+51.0%), dermatologicals (24.9%) and analgesics (+18.5%) being the most noteworthy.

• Asia (+5.2%) brightened to year-end 2022. Largest market China (+4.6%) improved over the previous reporting period aided by the relaxation of the country’s lockdown restrictions in early December, and No.2 ranked Japan surged — by its standards — to 5.0% growth, driven by a dynamic performance in cough, cold & allergy (+17.1%). Combined, these markets have a share of almost 70% of total regional sales.

The broader CHC market, encompassing all channels + CBD, grew by 8.2% globally, driven by the continued expansion of e-Commerce. The pandemic accelerated growth in this channel, and while the market is slowing from the 2020 peak, the internet & mail order channel advanced by healthy double-digits (+19.4%) in 2022. The channel now accounts for 16.9% of the broader CHC market (up from 15.3% in 2021).

Nicholas Hall Writes: Consumer health in the store retail sector grew by 7.2% in calendar year 2022, and by 8.2% in all channels. That is an amazing achievement during the third and hopefully final year of the pandemic. We’re still working on our short and long-term forecasts, but we expect that over the next five years CHC in all channels will grow by 6-7%. That is still ahead of the growth rate before the pandemic and a nifty achievement bearing in mind the mega-threats referred to in this column in previous weeks.

One of our internal debates is whether the revival in the consumer health care market was more than a rectification of the hit that Cough, Cold & Allergy took during the pandemic. I was always optimistic and didn’t believe that we were merely putting back lost sales as consumers changed their lifestyle and self-care habits. This is confirmed by the fact that the CCA category is now well above pre-pandemic levels at almost US$33bn vs US$27.9bn in 2019 (store retail only). That gives great confidence, although the question remains whether CCA sales growth is sustainable.

We are pleased to announce that the DB6 year-end 2022 update is now available! Nicholas Hall’s global database DB6 offers over 150,000 pieces of data, with more than 30,000 records covering 13,000+ brands and 3,000 companies across 63 countries. Available as a full subscription or for ad hoc purchases, to find out more, or set up a free demo, please contact kate.fielding-smith@NicholasHall.com.

Humanity hits milestone of global population of 8bn

The “Day of 8bn”, officially marked on 15th November 2022, is a milestone moment for humanity, according to the UN Population Fund, and “a testament to scientific breakthroughs and improvements in nutrition, public health and sanitation”, said UN Secretary-General António Guterres. However, it comes with worsening economic inequality and environmental damage. “Unless we bridge the yawning chasm between the global haves and have-nots, we are setting ourselves up for an 8bn-strong world filled with tensions and mistrust, crisis and conflict,” warned Guterres. Whether populations are growing or shrinking, every country must be equipped to provide good quality of life and lift up the most marginalised citizens. “We cannot rely on one-size-fits-all solutions in a world in which the median age is 41 in Europe, compared to 17 in sub-Saharan Africa,” noted UNFPA Chief, Natalia Kanem. “To succeed, all population policies must have reproductive rights at their core, invest in people and planet, and be based on solid data.” 

UN data indicates that the global fertility rate is now at 2.3 (down from 3.3 in 1990) and getting close to the “replacement rate” of 2.1, at which point the global population will stabilise (projected to be at some point between 2080 and 2100) and then decline. In the meantime, Africa is projected by the UN to drive half of the world’s population growth in the next 40 years, while India and Pakistan are projected to drive population growth in Asia.

^{Source: UN}

Nicholas Hall Writes: So, as of last Tuesday there are 8bn of us on this tiny planet, a mixture of the comparatively wealthy and those who struggle; the enlightened and those who suffer from dictators with a big stick and a stone age mentality; and those who want to be more healthy. Eleven years ago, there were 7bn of us, and some experts are taking comfort from the fact that it will take 15 years before we become 9bn. And apparently our population will peak at 10.4bn sometime in the 2080s, always assuming that Dr Strangelove in Moscow doesn’t push the red button.

Actually, the topic of better health is one of the few with which we are almost all agreed, but it is a decades-old story of more people chasing increasingly-scarcer resources. Despite the amazing breakthroughs in new ways of treating serious diseases, self-care still has the potential to deliver more benefits to more people than any other component of the global healthcare system. Self-care is more than just OTC, of course, and improved lifestyle has a massive role to play if we can encourage more exercise, better diet and a cleaner environment. But our pills in bottles, tablets in strips, creams in tubes have so much more to offer in terms of raising standards of public health – if we can only get the message across.

Explore the factors impacting CHC across Asia during our Asia-Pacific e-Conference, taking place online this week! The event will also include the presentation of our Regional CHC Creative Marketing Award. There is still time to confirm your participation – for more information, or to register, please contact elizabeth.bernos@NicholasHall.com without delay.

UN: World population to reach 8bn in 2022 and 10bn by 2050

The UN’s World Population Prospects 2022 report predicts that on 15th November 2022 the global population will reach 8bn. The report also shows that India is on course to surpass China as the world’s most populous country in 2023. The latest UN projections suggest that the global population could grow to around 8.5bn in 2030 and 9.7bn in 2050, before peaking at around 10.4bn people during the 2080s.

More than half of the projected increase up to 2050 will be concentrated in eight countries: the Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines and the United Republic of Tanzania. While 2022 is a milestone year, the global population is growing at its slowest rate since 1950, having fallen to less than 1% in 2020. As well as fertility, which has dropped markedly in recent decades for many countries, the pandemic has had an effect on population change: global life expectancy at birth fell to 71 years in 2021 (vs 72.9 in 2019).

^{Source: UN World Population Prospects 2022}

Nicholas Hall’s Touchpoints: The UN tells us that the global population will reach 8bn this year. As always, the demographic mix is important and by 2050 the number of over 65’s globally will be more than twice the number of children under the age of five and around the same as those aged under 12. Further reductions in mortality will increase average global longevity to around 77.2 years in 2050. But we don’t have to wait until 2050 to feel the effects of the ageing population, as all countries in the developed world are already experiencing high demand on healthcare services and medical products from a large cohort that expects a high quality of life for an extended period of time. This has been a discussion point throughout my 5 decades in this industry, and Big Pharma seems to defy gravity by always introducing better products at higher prices and sustaining or even growing margins.

But this cannot last, and the recent drive by the FDA to encourage more Rx-to-OTC switches is one of the most important emerging trends in our industry. As my colleague MaryAlice Lawless has written recently, the old switch model just won’t work any more, and the FDA has put the ball firmly in our court to come up with new regulatory and marketing models. That’s why the US switch application for the daily oral contraceptive is so important. Perrigo’s HRA subsidiary is in the forefront of this new category, having launched the first OTC version globally in the UK in 2021.

We are pleased to announce that the all-new agenda for our Asia-Pacific e-Conference has been released! Nicholas will be joined on 23 November by industry experts to explore expanding possibilities for CHC across the region. This event will also include the presentation of our Regional CHC Creative Marketing Award. For more information, or to register, please contact elizabeth.bernos@NicholasHall.com.

South Africa results: Adcock CHC sales power forward in H2

South Africa’s No.1 CHC marketer, Adcock Ingram, said that its OTC division “recovered in amazing fashion” in H2 2021, driven by “increased demand for cough, cold & flu products”. The company’s unaudited results showed that overall turnover rose by 16% to R4.3bn (US$282mn) in the six months ended 31st December 2021, driven by volume growth of 9% and a mix benefit of 6% from new products, increased marketing activity on behalf of multinational partners and brand innovation.

• OTC turnover grew by 26.4% to R993.9mn (US$65mn), arising from the relaxation in Covid-19 restrictions, which resulted in improved demand across the cough & cold portfolio vs the difficult comparative period. Citro-Soda, Allergex and Corenza-C all posted double-digit ex-factory growth

• Consumer was up 32.7% to R795mn (US$52mn) supported by the inclusion of Epi-max (+15.3%) from 1st January 2021, when it was transferred from the Prescription division. On a like-for-like basis, sales improved 13.6% with key brands posting healthy growth, most notably painkiller Panado, driven by a marketing campaign linked to Covid vaccinations

^{Source: Adcock Ingram}

Not all was rosy in the South African market, however. Following the disposal of its Animal Health and Respiratory Health Africa businesses, Ascendis Health’s remaining operations – Medical Devices, Pharma and Consumer Brands – reported an 18% decline in revenue to R1bn (US$65mn) in the six months to end-December 2021. Consumer Brands – R340mn / US$22mn, up by 1% – encountered headwinds in contract manufacturing plus the closing of and slower-than-expected re-opening of beauty salons. Port strikes and global supply chain challenges also impacted strategic procurement business Chempure. 

Following completion of a Recapitalisation Plan, which shareholders voted for in 2021, the Board will focus on rebuilding the company through a sustainable growth strategy. This includes optimising the Consumer Brands business, one of the largest VMS suppliers in S Africa, which presents a “compelling base for the group’s growth prospects”. The portfolio comprises seven key brands including Solal, Vitaforce, Menacal, Bettaway and Junglevite. Another pillar for growth is expansion via acquisitions. The Board is exploring opportunities to purchase “scalable, earnings-enhancing businesses in the broader consumer products sector”.

If you are looking to fill a gap in your business, Nicholas Hall’s executive recruitment service CHC TalentSelect may be able to help. With over 40 years’ experience in connecting people in the consumer healthcare industry, please get in touch with maricar.montero@NicholasHall.com to start your search.

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.

CHC market shows resilience in Q2 2020

In the 12 months to end-June 2020, the global retail CHC market grew by 4.6%. This marked a slowdown vs MAT Q1 (+5.6%), but Celine Waller, Group VP, DB6, said “the market has remained far more resilient than many expected”. A boom in prevention categories such as antiseptics & disinfectants (+38.7%) and immune supplements (+38.6%) has helped to mitigate the effect of “pantry unloading” following consumer stockpiling in Q1, while strong US growth in Q2 offset weaker performances in China and Western Europe.

Western Europe decelerated to 1.2% triggered principally by a decline in CCA as lockdowns and increased hygiene measures resulted in reduced incidence of respiratory pathologies. Low growth in Germany (+1.5%) and the UK (+1.9%) offset moderate declines in Italy (-0.8%) and France (-1.3%).

Asia-Pacific slowed to 2.7% hindered by a weak performance in China and declines in both Japan (-2.9%) and Australia (-1.3%) caused by loss of revenue from Chinese travellers. However, India was up 11.3% driven by chyawanprash, which more than doubled thanks to its immunity positioning.

North America posted a 6.4% upturn with strong US growth spearheaded by VMS (+8.8%) and Derma (+8.4%) – the latter boosted by a doubling in sales of antiseptics & disinfectants.

Central & Eastern Europe achieved growth of 8.6% with inflation-driven growth in Russia (+10.9%) offset by a comparatively weak performance in Poland (+5.2%), while the Middle & East Africa experienced a slight slowdown (+6.9%).

Latin America grew by 11.8% with both Brazil (+12.0%) and Mexico (+11.0%) up by double digits. VMS was the key contributor growing by 16.7% in the region.

We are pleased to announce Nicholas Hall’s Asia-Pacific webinar, which will be held on 12 November! Nicholas will be joined by several regional industry experts to explore key trends in the region, including a look at regional WOW! brands, growth prospects, distribution and much more. For further details, or to register, please contact elizabeth.bernos@NicholasHall.com.

Q4 update: Middle East & Africa highlights

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.

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.

Emerging Markets drive OTC growth in 2018

Emerging Markets constitute one of the 10 Infinity Zones for future CHC growth that we highlighted in our recent blog previewing Nicholas Hall’s upcoming New Paradigms report. Recent figures from the IMF’s World Economic Outlook forecast that developing economies will continue to outpace advanced economies and, according to the latest data from DB6, Rest of World (Middle East & Africa + Kazakhstan) and Latin America (including Puerto Rico) growth – 7.2% and 9.5% respectively – fast outpaced that of the the global OTC market (+4.0%) in 2018.

Middle East & Africa and Latin America still account for a relatively small share of global OTC sales – 7% and 5% respectively – but both are rising in power every year. Brazil (+10.1%) is the No.9 OTC market globally, while Mexico (+6.9%) ranks 16th globally in terms of OTC market size. As for the Middle East & Africa, there are now three countries clustered close together in the global OTC rankings – South Africa (+8.7%), Turkey (+15.8%) and Saudi Arabia (+6.7%) – claiming the 19th, 20th and 21st positions.

As well as double-digit growth in Turkey, there were also strong OTC performances from Algeria (+8.6%), Egypt (+15.2%), Nigeria (+7.9%) and UAE (+7.8%) in 2018. High consumer demand for preventive medicines is a key driver of CCA and VMS growth in key markets such as Egypt. According to a DSM survey of almost 7,000 people in EMEA (Europe, Middle East & Africa), some of the top health concerns for the young include immunity and resistance to disease and colds.

Multinationals have already established a strong foothold across the Middle East & Africa, but in some countries like Egypt and Iran local marketers still remain dominant. GSK, Sanofi and Bayer are the Top 3 OTC marketers in the region, followed by South Africa’s No.1 OTC marketer Adcock Ingram and RB. GSK’s OTC portfolio is highly focused on analgesics, especially Panadol, while Sanofi and Bayer have extensive VMS portfolios across the region.

Available on tablet, smartphone and desktop, OTC DASHBOARD covers 63 markets across the world, allowing you a bird’s eye view of the CHC market! We’ve now published our latest Q4 update, giving you the most up-to-date trend reports on Middle East & Africa markets such as South Africa, Turkey and Saudi Arabia. Contact hannah.burke@nicholashall.com to find out how you can benefit from OTC DASHBOARD by setting up a free trial today!

East to power global economy in 2019

According to the latest research from the Economist Intelligence Unit (EIU), several countries in Asia-Pacific, the Middle East and Africa will produce the highest economic growth in 2019, while North America, Europe and even Latin America will lag behind. There are some exceptions to this trend (like Poland and Ireland in Europe, which are forecast to outperform the global economy in 2019) but the general picture shows that the highest GDP growth will be in the east.

Although there are concerns about the economic slowdown in China – see our blog just before Christmas and the recent letter from Apple CEO Tim Cook to investors – the country is expected to remain among the best-performing economies in 2019, with a growth forecast of 6.3%. The EIU revised up slightly its China forecast for 2019, following the agreement reached between the US and China at the G20 to delay planned tariff actions. However, it remains uncertain whether a bilateral trade deal will be reached.

China’s troubles may actually be providing a boost to neighbouring Asia-Pacific markets, such as Vietnam, which offer an alternative manufacturing location. Also, as we’ve highlighted on the blog previously, several African markets have likewise been boosted by their growing status as manufacturing hubs, notably Kenya. As for India, it is forecast by the EIU to be among the Top 5 fastest-growing economies in 2019, continuing its strong 2018 upturn – according to the latest OTC DASHBOARD data for the MAT Q3 2018 period, India is the fastest-growing OTC market in Asia-Pacific, up 8.8%.

At the other end of the scale, key Latin American markets Venezuela and Argentina are forecast to be among the Top 5 worst-performing economies in 2019, while Mexico and Brazil are also expected to perform below par this year. However, high inflation has helped to boost OTC growth in these markets. As for Europe, several western European markets are forecast to produce low growth, while Japan, Turkey and South Africa are all expected to produce growth in the 0-2% range, with the US performing slightly better.

Join Nicholas Hall and The CHC Training Academy in Vietnam on 28 February. Focusing on the central theme of Winning Together in Consumer Health, this unique workshop will enable you to develop essential skills to succeed in the new era of collaborative partnership approaches between retailer and supplier for strengthening categories together, plus deep insights on key stakeholders. Don’t delay — book your place before 17 January to save with our generous early bird discount! To find out more, please contact elizabeth.bernos@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