Market Movers Q1: CCA, VMS brands among fastest movers

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In this week’s blog, we take a closer look at our newly published Market Movers data for MAT Q1 2020, which highlights the brands that performed best and worst in terms of value sales growth or decline in that period. Certain marketers like RB, which last week reported a 12% rise in its OTC portfolio in Q2 2020, have found success from having a well-positioned portfolio of power brands in fast-growing, Covid-driven CHC categories, such as cough & cold remedies (Mucinex), immunity supplements (Airborne) and antiseptics & disinfectants (Dettol).

P&G also reported double-digit organic growth of its Personal Health Care portfolio in Q2 (fiscal Q4), powered by Vicks, which continues to gain share. Vicks NyQuil / DayQuil combo packs were among the six fastest-growing brands in MAT Q1 2020, along with one of China’s leading systemic cold & flu remedies, 999 Gan Mao Ling. VMS products also featured strongly among the Top 6 fastest-growing brands, with Olly and Emergen-C performing well in the US market thanks to their stress / immunity positioning, and Double Whale Vitamin D Drops achieving high growth in China. J&J’s Tylenol, the No.1 analgesic brand globally, also continues to produce dynamic Covid-driven growth.

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Asia-Pacific was the region that underperformed most in MAT Q1 2020 – achieving just 3.4% growth vs 6.3% for North America and Europe – so it is no surprise that five of the Top 6 worst-performing brands are from China or Japan. Tonics & cure alls was the subcategory most responsible for Asia-Pacific’s relatively low growth, with category sales down 25% in China, owing to issues with donkey breeding that have resulted in rising raw material costs and subsequent price rises, affecting two brands in particular – Dong-e E-jiao and Fu Fang E Jiao Jiang – while Hong Mao Medicated Wine was affected by negative claims.

OTC tonic drinks is another VMS subcategory hit by declining sales, with a continued downturn in Japan where the old, male consumer base is retiring and brands face competition from energy drinks. Takeda’s Alinamin EX was among the brands that declined fastest in MAT Q1 2020. Another CHC subcategory affected by weaker sales in Q1 was antacids, as a result of the withdrawal of ranitidine-based antacids from the market owing to concerns around NDMA in the formulation. Sanofi’s Zantac was among the key brands impacted, with Zantac 150 in sharp decline in the US market.

Today is the last chance to pre-order our upcoming Analgesics 2020: Assessing the Current & Future Self-Care Market for Pain Relief at the discounted rate and save up to GB£1,800! Contact melissa.lee@NicholasHall.com to order or find out about special discounts available on purchases of more than one report title!

Europe at the Heart of Probiotics Innovation

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Three probiotics deals have been signed in the past week, all involving European companies, which remain at the heart of driving innovation in this fast-growing consumer health sector. AxisBiotix, a wholly-owned subsidiary of UK life sciences company SkinBioTherapeutics, has signed an agreement with Dutch-based probiotics specialist Winclove to design a probiotic blend based on the modifying properties of specific bacterial species on psoriasis disease pathways. This will be developed into a probiotic food supplement called AxisBiotix.

SkinBioTherapeutics is responsible for the identification and selection of the bacterial strains and patient testing; Winclove is responsible for the formulation and manufacturing. “There is strong scientific evidence pointing to a link between gut dysfunction, stress-induced alterations to the gut microbiome and skin inflammation,” said SkinBioTherapeutics CEO, Stuart Ashman. “We believe that in this partnership … we can create a specific probiotic food supplement that has the potential to help manage the hard-to-treat symptoms of psoriasis.”

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Meanwhile, Danish probiotics specialist Chr Hansen has signed a contract with Teijin to sell ingredients for health food and infant formulas in Japan. Under the agreement, Teijin will market six probiotic products, including BB-12 (Bifidobacterium animalis ssp. Lactis) for gastrointestinal balance and immune support, and Urex (Lactobacillus reuteri [RC-14] + Lactobacillus rhamnosus [GR-1]), which increases lactic acid bacteria for vaginal health. Teijin will leverage know-how and technical support from Chr Hansen and both will jointly develop marketing initiatives. While this marks Teijin’s entry into the field of probiotic ingredients, the company already markets prebiotics. Seeing functional foods as a core part of its healthcare strategy moving forwards, Teijin plans to develop more prebiotic and probiotic ingredients and expand its product line-up.

Finally, Serbian-based Beopanax has signed an exclusive distribution agreement with Taiwan’s Bened Biomedical to bring its flagship psychobiotic probiotic strain to new territories, including Serbia, Kosovo, Bosnia, Montenegro, Macedonia, Croatia, Slovenia and Albania. The launch of Second Brain, a sachet containing 30bn CFU of Lactobacillus plantarum PS128 to help improve mental and emotional health, is slated for Q1 2020. Bened is also targeting expansion in CIS countries.

Probiotics & prebiotics is highlighted as one of 8 sectors driving consumer healthcare innovation in our upcoming report, Innovation in CHC: NPD & Innovation in CHC under the Spotlight. Drawing on Nicholas Hall’s CHC New Products Tracker, this all-new title from Nicholas Hall’s Reports takes an in-depth look at 100 key CHC innovations in 2019, and picks out some of the most prominent delivery format and ingredient trends in the consumer healthcare industry. Please contact Melissa.Lee@NicholasHall.com to find out more, or to purchase your copy and save with the early-bird discount!

PPoC initiatives key to future CHC growth

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For the final instalment in our series of blogs on Nicholas Hall’s Infinity Zones for future CHC growth, we turn to the topic of Pharmacy Point-of-Care (PPoC). As our recent blog on e-commerce indicated, internet & mail order sales of OTCs are growing fast but store-based sales still account for 78% of the global OTC market. In an increasing number of markets, PPoC initiatives are providing new, speedy and effective alternatives for consumers unable or unwilling to wait for a GP appointment. Below is a summary of some PPoC initiatives in recent years from all four corners of the globe.

In February 2019, PTS Diagnostics and Kroger Health, which operates 2,100+ pharmacies and clinics in the USA, announced the full rollout of CardioChek Plus analysers for point-of-care blood testing to help identify individuals at risk of heart attack, stroke and diabetes. The CardioChek Plus system accurately tests lipid profile and glucose simultaneously with one fingerstick, enabling a more seamless process for the customer. It measures total and HDL cholesterol, triglycerides and glucose, providing on-site results in as little as 90 seconds.

In Vietnam, Chris Blank and his team at Pharmacity have the ambition to reach 1,000 stores in just 1,000 days. But, as Nicholas Hall said, it’s more than just store openings that is propelling Pharmacity to national dominance – it has carefully figured out the offline and online needs of its customers and is working hard to build traffic in each store, so the proposition is for vertical as well as horizontal growth. Ultimately, Pharmacity will succeed by delivering holistic PPoC solutions to the unmet health needs of its customers.

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Turning to Europe, LloydsPharmacy (Celesio / McKesson) started offering sore throat tests for people aged 18+ years in 600 stores across England, Scotland and Wales in November 2018. Pharmacists ask questions and examine the throat to determine the possible cause of pain. If necessary, they will take a swab test to check for infection. If the results are negative for Streptococcus A, the pharmacist is able to offer advice, as well as a range of OTC treatments.

As for Latin America, Brazil’s ANVISA approved a resolution in late 2017 that allows any health establishment nationally, including pharmacies and drugstores, to administer vaccinations, providing that they meet certain requirements. This follows a number of local legislation changes permitting pharmacies to offer a greater number of services – among them, the application of vaccines, health monitoring with point-of-care testing and self-test equipment – in the states of Sao Paulo, Amazonas, Para, the Federal District and the city of Sao Paulo in November-December 2017.

Don’t miss out on your final chance to benefit from our pre-publication discount when you pre-order Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself! Analyse each aspect of the CHC industry, with a focus on crucial issues including Healthcare trends, Innovation, M&A, Switch and much more. Nicholas will also unveil all the “infinity zones” he has identified as being paramount to the future growth of the industry. In addition to this, you can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

Food intolerance category shows huge promise

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For the next instalment in our series of blogs on Nicholas Hall’s Infinity Zones for future CHC growth, we take a closer look at the growing issue of food intolerance, driven by unhealthy eating and the rise of processed food with additives, as well as changing diets across the world. Currently a driver of GIs growth, food intolerance has the potential to break out and become its own OTC category, and Nicholas Hall is urging CHC companies to seize this huge opportunity in the face of any future competition that might come from mainstream food companies, as was the case with functional foods.

A 2016 Nielsen study showed a high prevalence of food intolerance across various regions – the percentage of those who say someone in their household has food intolerances / allergies was 22% in Europe, 31% in North America, 34% in Latin America and 42% in Asia-Pacific, with children more likely to suffer than adults. Food intolerances (lactose, cruciferous vegetables, gluten, fructose, etc) can cause a variety of challenging symptoms for those affected, and new product development is catering for this fast-growing market.

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Lactose intolerance is the most established niche, with lactase supplements (an enzyme that helps digest lactose) generating sales of roughly $65mn in 2018. Lactase supplements are fairly well-established in North America and Europe, with J&J’s Lactaid a key brand in the USA, while Latin America – especially Brazil – remains a current hotbed of innovation. Other intolerances are also increasingly being catered for with new products such as GluteoStop (Ineo Pharma) in Germany / Switzerland and Glutenam (Named) in Italy for glucose intolerance, and Fructaid (Pro Natura) in Germany for fructose intolerance.

Marketers of diagnostics and probiotics have also recognised the potential of this category. Lykon has launched MyNutrition 100 in Germany and UK (retailing for between $110-125), an at-home kit positioned to test for food intolerance across the 100 most common foods, while Montefarmaco extended probiotic brand Lactoflorene in Italy in 2019 with Lactoflorene Digest, claimed to promote the balance of intestinal flora that can be compromised by digestive disorders such as lactose intolerance.

Food intolerance will be one of the key topics in our upcoming report, Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself! Examine each aspect of the CHC industry in 20 chapters, with a focus on major issues including Regulation, Pharmacy Point-of-Care, M&A, Switch and much more. Nicholas will also unveil in more detail the “infinity zones” he has identified as being crucial to the future growth of the industry. In addition to this, you can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas for an additional GB£10,000. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

East to power global economy in 2019

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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.

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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

Bangladesh: Amazon eyeing 2020 entry

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As today’s OTC DASHBOARD hot topic report shows, the e-commerce market in Asia-Pacific is undergoing rapid change, with China passing new e-commerce laws that will take effect in January 2019, while India has also just released draft rules for the online sale of medicines. Amazon also last week unveiled a new Hindi version of its website.

Yet all this upheaval is not isolated to the major markets of India and China. Amazon announced over the weekend that it is planning to begin operations in Bangladesh within the next couple of years, to compete with its arch e-commerce rival Alibaba, which is already present in the country via Daraz. With a population of just over 166mn, Bangladesh is an attractive and fast-developing market.

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According to local reports, however, resistance from local e-commerce players in Bangladesh is likely to be strong. Many are opposed to the government’s new Digital Commerce Policy, which allows foreign companies to have 100% shares in local e-commerce ventures (previously it was capped at 49%).

Key areas of sensitivity will be pricing and investment in the local economy. The e-Commerce Association of Bangladesh (e-Cab) is in favour of protection for local e-commerce companies and is reportedly working on a list of policy recommendations, including foreign firms having to host their websites locally, as well as ensuring 90% of staff are locals and that companies have a logistical presence in the country.

Explore the digital landscape at Nicholas Hall’s upcoming OTC.NewDirections Executive Conference. Other topics on the agenda include Medical Device Regulations, Medical Cannabis, Switch and Smart Probiotics. This will be an inspiring day on 12 September in London, focusing on Where Innovation Meets Regulation. For details of the full agenda or to reserve your place contact elizabeth.bernos@NicholasHall.com

MAT Q1 2018: Global OTC growth steady at 4.1%

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According to Nicholas Hall’s global OTC database, DB6, the OTC market maintained 4.1% growth in the 12 months to end-March 2018. This steady but slower rate of global OTC growth compares to a faster pace during the first three quarters of 2017, when growth peaked at 4.6%.

The key factor in the persistent slowdown in Q1 2018 was lower OTC growth in the USA (+2.5% vs +2.8% for calendar 2017), with faster development held back by a weak allergy season. As highlighted in our OTC DASHBOARD market summary for North America, the impact of recent Rx-to-OTC switch activity in the US market has also been minimal.

Some positives emerged in the MAT Q1 2018 data. OTC growth in Western Europe improved to 1.8%, boosted by a high incidence of cough & cold in the first quarter of this year, while Latin America’s OTC market continued to increase strongly (+11.8%), with leading country Brazil up by 9.8%.

The OTC performance in Asia-Pacific (+4.7%) was mixed, with China (+6.3%) and India (+7.9%) improving upon their 2017 growth, however Japan and Australia remained flat in Q1 2018. Growth in the Middle East & Africa remained stable at 6.7%, while Central & Eastern Europe decelerated further to 5.5%, with weakening growth in both Russia (+3.5%) and Poland (+3.3%).

If you are not a subscriber and would like to find out more about what DB6 covers, please contact kayleigh.griffinhooper@NicholasHall.com for a free demo.

 

Nicholas Hall’s Closing Speech at 4th Asia Pacific Conference

Nicholas Hall’s 4th Asia-Pacific Conference has just taken place in Singapore, which included the APAC Consumer Healthcare Awards, an opportunity to recognise innovation in Asia-Pacific’s OTC industry that produced the following winners:

Asia-Pacific Creativity in Consumer Healthcare Award

Panadol 1st

Systane 2nd

Bactidol 3rd

Worldwide Digital in Consumer Healthcare Award

Insto 1st

OBH 2nd

APAC New Product of the Year in Consumer Healthcare Award 

Scotts DHA Gummies 1st

Dimetapp Ultra Plus 2nd

As Nicholas Hall made clear in his closing speech, which you can watch in full above, the high number of companies supporting their awards entries with passionate case studies was an encouraging sign in an OTC industry currently undergoing huge disruption. Some of the uncertainty is emanating from the renewed focus on M&A activity.

Nicholas Hall pointed to the uncertain future ahead of us, arguing that there are now no guaranteed business models for OTC companies. That said, he believes that brands will survive, as long as marketers and product managers “feed and water them” and also convey real emotional benefits to consumers.

Though the OTC industry is currently experiencing poor rates of growth across the world – with the exception of some markets like Vietnam – Nicholas Hall remains positive for the future, insisting on the need for OTC marketers to constantly refresh their portfolios, while also engaging more with the digital world. Now more than ever, the global OTC industry is desperate for continuity and innovation.

Following on from the Asia-Pacific Consumer Healthcare Awards Ceremony at our Singapore Conference, we now look ahead to our 2018 European Marketing Awards! Click here for more details on the awards for which you can enter. With entries closing on 1st February, please contact jennifer.odonnell@NicholasHall.com to find out about entry criteria or to book your place at the conference now!

Cognitive Boost For Children Whose Mothers Take Supplements In Pregnancy

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Maternal multi-micronutrient (MMN) supplementation during pregnancy could drastically improve cognitive ability in children, reports a study published on 17th January in The Lancet Global Health. This may be apparent in children between the ages of 9 to 12 years.

The Summit Institute of Development research team led a follow-up study involving 2,879 schoolchildren in Indonesia whose mothers were supplemented with MMN or iron + folic acid (IFA) in the Supplementation with Multiple Micronutrients Intervention Trial (2001-2004).

SID’s initial research was conducted with 31,290 pregnant women on Lombok Island. The women were selected randomly to receive multi-micronutrient supplements.

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The CEO of SID, Mandri Apriatni, commented: “Results of our initial research showed there had been an 18 percent decrease in infant mortality rates each year among mothers who had taken multi-micronutrient supplements during their pregnancy, much lower compared to those who only received iron and folate acid supplementation.”

In the follow up-study that saw children complete cognitive tests over a two-year period, researchers observed better procedural memory in MMN children vs IFA children. The difference between the two corresponded with the increase associated with an additional half-year of schooling.

Children of anaemic mothers in the MMN group scored considerably higher in general intellectual competence, equivalent to the increase associated with an additional full year of schooling. Overall, there was a positive coefficient of MMN vs IFA in 18 / 21 tests.