Latin America: Focus on Brazil

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Nicholas Hall’s 4th Latin American Consumer Healthcare Conference was held in Sao Paulo, Brazil last week and attracted a large and enthusiastic audience. This vitality is reflected in OTC growth trends – according to the latest MAT Q3 2018 figures, which will be published along with trend reports on the OTC DASHBOARD website soon, Latin America remains the fastest-growing region in the global OTC market, with sales up 12.8% to US$8.5bn in the year to end-September 2018.

Brazil is at the heart of this upturn, as shown by our chart below displaying the Top 5 countries in the region. Brazil’s OTC market is enjoying continued double-digit growth, and accounts for almost half of regional turnover, ahead of Mexico and Colombia. There is currently a proposal to create a legal mass market for CHC products in Brazil, which could provide further fuel for OTC growth, however there is currently strong opposition from doctors, pharmacists and, surprisingly, consumer associations, so the proposal is unlikely to be approved in its present form.

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Here’s a brief roundup of all presentations at our 4th Latin American Consumer Healthcare Conference – a fuller review will be in the next issue of OTC INSIGHT Latina:

  • Juan Thompson (ILAR): Huge savings for public health systems could be made by encouraging OTC treatment of common, non-serious conditions, thereby reducing public expenses.
  • Andre di Donato (MyPharma2go): By understanding the intricacies of the region’s regulatory systems, we can take advantage of legislation, rather than being restricted by it, and gain in-depth market insights. In particular, MyPharma2go is detailing Brazilian doctors to write prescriptions for high-strength supplements imported from the USA, which are delivered to individual consumers / patients in under 14 days — in the case of Celebrity Vitamins, the company is generating 2,000 prescriptions a day.
  • Rodrigo Ribeiro (GSK): Recommendation is the most powerful tool we have, so we cannot underestimate the importance of investing in HCP promotion and education, in addition to informative consumer-oriented advertising.
  • Tatiana Raposo Pires (Herbalife): It is likely that the food supplements industry in Brazil will benefit greatly from ANVISA’s new category definition, including specific and simplified legislation; however, there are still some obstacles to overcome, particularly relating to probiotics, which offer high-growth potential.
  • Rodrigo Garcia (Pfizer): There are many regulatory barriers to switch in LatAm, including political and social; but public education and encouraging regulatory agencies to recognise increasing consumer understanding of OTCs are key to pushing for switch.
  • Rosana Sun (Adigo) reminded us of the importance of human emotions and the essential human differences in developing relationships and interacting with others in the business world.
  • Julio Cesar do Monte (J&J): In order to survive in a changing and increasingly-digitalised environment, companies need to remain open and flexible to change, looking to technology for new ways to gain a competitive advantage.
  • Keith Garrity: Outsourcing and brand fostering is increasingly popular as part of companies’ global growth strategy, recognising the importance of local nuance and market specifics.

Stay up to date with the latest trends and developments impacting Latin America in Nicholas Hall’s OTC INSIGHT Latin America. This bi-monthly publication includes new product activity, recent LatAM news, a global OTC update and much more. To receive a sample issue or for details of subscription rates, please contact melissa.lee@NicholasHall.com

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Sleep disorders on the rise globally

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According to a new in-depth analysis of the global sleep aids market by Nicholas Hall’s Reports, sleeplessness and sleep disorders are on the rise, with approximately one third of the world’s population affected. Many consumers are happy to self-medicate, increasingly opting for a variety of herbal & natural, homeopathic and medical device brands, driving OTC growth in key markets like Brazil and Spain (see sample pages).

In terms of sales, sleep aids & sedatives generate an OTC total of over US$2.3bn globally, but have been characterised by low growth in recent years, and are in need of rejuvenation via new product development, adjacencies or connected health solutions. The self-medication sleep aids market (registered OTCs and a variety of supplements) also suffers from regulatory diversity across markets for common sleep aid ingredients.

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Genuine innovation is thin on the ground, but generics and “me-toos” launch frequently. Adjacencies focused on sleep offer alternatives, with other categories also entering the fray including nighttime analgesics, cough & cold remedies, menopause and other supplements. Connected Health is a key area of expansion. Sleep aid brands partnered with technology – passive (e.g. analysing sleep patterns / providing feedback) or active (improving sleep) – may break the low-growth cycle.

Comment from Ian Crook, Managing Editor, Nicholas Hall’s Reports: Sleep is a health area that lends itself easily to self-medication via sedating antihistamines and herbal & natural ingredients such as melatonin and valerian, while medical devices and digital health focused on sleep are seeing increased investment. With widespread concern over the “sleep loss epidemic” and significant implications for overall health from lack of sleep, it is imperative that consumers have access to tools to help them sleep. Raised levels of stress, anxiety and smartphone / tablet use ensure rising demand that can be tapped into by the right self-care solutions.

The full report, Sleep: Exploring Opportunities for Growth in Sleep Aids & Sedatives, is available now and more details can be found here. To order your copy, please contact melissa.lee@NicholasHall.com

Q3 2017: Global OTC growth stays at 4.7%

According to the latest figures published by Nicholas Hall’s global OTC sales database DB6, the OTC market maintained 4.6% growth in MAT Q3 2017. Commenting on the results, DB6 VP Celine Waller said: “Russia remained the fastest-growing leading market, though its growth slowed slightly compared to MAT Q2 2017 (+17.3%). Brazil and Turkey (+13.1%) also both achieved double-digit growth. Growth in the US increased marginally, with an improved performance in cough & cold offset by continued weakness in gastrointestinals and dermatologicals. France and Australia (-0.7%) remained in decline – France owing to the poor performance of the large OTx sector and reverse switch of some cough ingredients, and Australia driven by a slowdown in demand from Chinese consumers buying VMS products for resale in China (daigou or ‘suitcase entrepreneurs’).”

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Though OTC growth remains high in many of the Emerging Markets, the established markets of North America, Japan (+0.6%) and western Europe – notably Germany (+1.8%), France (-1.2%), Italy (+2.0) and UK (+1.7%) – remain relatively flat. Innovative Rx-to-OTC switches, such as the UK MHRA’s recent approval of the POM-to-P reclassification of Viagra Connect, or the emergence of new OTC categories, such as e-cigarettes or medical cannabis, offer the most promising route back to growth for many of these established OTC markets.

Nicholas Hall said: “Q3 data confirms 4.6% as the baseline for CHC growth, and frankly it’s not good enough!! Only the sleepiest or most risk-averse companies will accept competing in a market where growth is only modestly ahead of inflation + higher population. That is why the first serious step by Pfizer to switch Viagra is so important. Since we made our first detailed review of the ED category for a Big Pharma client exactly 5 years ago, we have been convinced that Viagra is potentially the world’s largest consumer health brand. Some might say that it already is, although that would be true only for the use of the Viagra brand name on the internet as most of the blue pills sold in that channel are not from Pfizer. As a legitimate CHC category, and with recreational use included — which Big Pharma companies dislike as they see ED brands as treatments — the overall CHC reproductive health category, including ED brands, condoms, oral contraceptives, EHC and conception products and diagnostics, could easily reach sales of US$20bn at MSP in all channels of distribution.”

Striving for Success in Latin America

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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.

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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:

  1. 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
  2. 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
  3. 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
  4. 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
  5. TV is still the main medium, but not without problems of loss of viewers, so we should test-market more for optimum spend
  6. 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
  7. 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
  8. 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
  9. 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 conference@cubex.co.in

Nicholas Hall’s Latin American conference: Day 1

Our special correspondent Holly Parmenter reports back on Day 1 proceedings at Nicholas Hall & Company’s 2nd Latin America conference in Miami, Florida.

With the theme of From Recession to Recovery: Analysing Latin America’s Return to Growth, the conference opened with Nicholas Hall’s update and annual report. The annual report discussed the recent OTC successes, and the changes and challenges impacting consumer health. Nicholas Hall focused on fast-growing categories such as the success of intranasal allergy sprays, OTC contraceptives and the implication of switch for erectile dysfunction treatments.

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Key speakers of the day were Alonso Botero of Tecnoquimicas, who shared his views on the Colombian OTC market, explaining its monumental growth and how it has become the fifth fastest-growing country of the century.

Former General Manager of GSK Consumer Healthcare Brazil, Simone Torres Soares, gave a presentation on digital opportunities within OTC brand marketing and discussed how digital can impact our business model and change the OTC industry.

Ed Rowland, Founder and Managing Partner of Rowland Global LLC, covered the upside of devaluation and growth in Mexico stating that e-commerce is coming with a force, looking to drive growth in Mexico through social media in a 3-5 year timeframe.

Abbott Nutrition General Manager, Carlos Andrade, gave some perspective on the current economic crisis in Brazil, while also stating the country’s resilience.

Thorsten Umland, VP and Head, Business Development & Licensing Consumer Health, Bayer, concluded the presentations with a Global OTC M&A Landscape.

We will be bringing you a fuller, more in-depth report on proceedings in next week’s blog.

OTCs in Action Episode 64: Relieving Zika pain

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OTCs are in Action treating minor symptoms of the Zika virus, which has spread to 66 countries, according to the World Health Organization’s April 21 status report. In fact, the insect-borne disease has become so prevalent that OTC brands are investing in TV advertising detailing their benefits for symptom relief. For example, Nicholas Hall’s OTC INSIGHT Latin America reports this month: GSK’s A+P campaign in support of paracetamol-based Dolex systemic analgesic (known globally as Panadol) highlights its efficacy against symptoms of vector-borne viruses such as zika, chikungunya and dengue.

Nicholas Hall Events will host its 2nd Latin American OTC Conference, From Recession to Recovery: Analysing Latin America’s Return to Growth, on 9-10 June in Miami. Nicholas Hall will be joined by senior professionals with intimate knowledge of the local OTC environment, to offer delegates ways of navigating this dynamic yet unpredictable region.

Following the theme ‘From Recession to Recovery’, our speakers will analyse Latin America’s return to growth showcasing examples of local and global brands, highlighting ways in which they have found success in this region and what lessons can be learned. For more information, please click on the link:
Latin American OTC Conference: From Recession to Recovery

OTCs in Action Episode 49: Cholesterol targeted in Brazil; Fatigue fought in Italy

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OTCs in Action in Brazil and Italy help consumers fight high cholesterol and low energy with dietary supplements. Abbott’s phytosterol-based Duplostat lowers cholesterol when taken twice daily, coupled with the adoption of a healthy lifestyle. The 800mg softgel capsules help reduce the absorption of LDL-cholesterol from the third week, according to Abbott.

Additionally, when used in conjunction with statins, the efficacy in cholesterol reduction is the equivalent of doubling the statin dosage without any adverse affects. Research undertaken by the Ministry of Health (quoted by Abbott) indicates that around 35% of Brazilians aged 65 years or over are affected by high cholesterol.

For more new products from Latin America, click below:

Nicholas Hall’s OTC INSIGHT LATIN AMERICA, OCTOBER 2015

In Italy, Nestlé Health Science has served up Meritene Vitachoco, Swiss chocolate squares with 12 vitamins (including A, B6 and B12) and five minerals (including zinc and iron). The product is positioned to revitalise adults and older consumers in times of fatigue and stress, especially those with insufficient dietary intake.

For more new products from Europe, click below:

Nicholas Hall’s OTC INSIGHT EUROPE, OCTOBER 2015