MAT Q3 Update: Category, country performances

Assessing the latest data on the performance of the global CHC market in MAT Q3 2020, Celine Waller, Group VP, DB6, wrote: “Covid-19 continues to have a seismic effect on the CHC market, although the impact of the pandemic differs depending on the category and geography. However, in totality the market has continued to outperform expectations with the increased focus on maintaining health & wellness providing a welcome boost to the industry.”

Vitamins, minerals & supplements (+6.0%) was the fastest-growing major category in MAT Q3, benefiting from the greater focus on wellness, with products connected to immunity particularly dynamic – overall, immune supplement sales rose by 47% globally. This trend was particularly noticeable in the world’s No.1 CHC market, USA, where immune supplements, as well as zinc and vitamin C supplements, all recorded exceptional growth.

Dermatologicals also performed well, increasing by 5.9% thanks to a surge in demand for antiseptics & disinfectants, which grew by 51% globally, owing to RB’s Dettol making big gains in key markets like China, and various successful launches in the USA. Meanwhile, analgesics achieved growth of 5.0% thanks to the strong performance of systemics (+5.9%), powered by the continued dynamism of global No.2 CHC brand Tylenol (J&J). Topicals mustered growth of only 3.2% in spite of the US switch of GSK’s Voltaren Arthritis Pain.

Cough, cold & allergy (+2.2%) was the weakest category globally in MAT Q3 2020, as social distancing and increased hygiene measures resulted in reduced incidence of respiratory pathologies. Declining sales for cough & cold remedies across western Europe, most noticeably in Germany and France, was the primary factor for the poor performance of these markets in MAT Q3 2020.

Gastrointestinals also produced low growth, with global sales increasing by just 2.8%, after a flat performance in western Europe and falling sales in Japan. In fact, heavy decline for GIs and OTC tonic drinks were two key factors behind the 5.1% fall in Japan’s CHC market. Liver & bile remedies (+5.2%) was the only GIs subcategory to achieve growth of more than 5% globally, powered by a double-digit rise in China.

Sales of Lifestyle CHC products expanded by 3.7%, a further deceleration in Q3, despite double-digit growth for sedatives & sleep aids and obesity treatments. A slowdown in sales of eye care treatments and a drop-off in Rx-to-OTC switch activity are two of the primary factors for this deceleration globally, though one exception is erectile dysfunction, which grew by double digits powered by OTC switches in the UK and Poland.

We are pleased to announce the latest DB6 MAT Q3 data is now available! With over 150,000 pieces of data across 63 markets, DB6 now includes topline data across all channels of distribution, including e-Commerce! To find out more about our extensive database or to set up a free demo, please contact kate.holdcroft@NicholasHall.com.

OECD: Covid’s impact on e-Commerce

A new report published last month by the OECD, entitled e-Commerce in the time of COVID-19, explores how the pandemic has caused an expansion of e-Commerce towards “new firms, customers and types of products, likely involving a long-term shift of e-Commerce transactions from luxury goods and services to everyday necessities”. Below we pick out some of the highlights that relate to medicines.

In the opening summary, the OECD says that, “while e-Commerce in the past for many consumer groups was centred on high tech goods, toys or books, it now increasingly involves goods for which availability is critical to a large share of the population, including groceries, medicine and other necessities.” There were two examples given by the OECD from Brazil and Germany showing how e-Commerce has disrupted the medicines market.

In Brazil, “around 54% of Internet users had bought food or food products over the Internet in 2020, substantially up from only 22% in 2018. Significant increases were also observed for cosmetics, toiletries and medicines. As convenience has always been one of the key drivers of e-Commerce participation, it is likely that many of the new users will keep ordering at least some goods online in the future.”

As for Germany, “online sales grew significantly for medicines and groceries, historically laggard sectors in terms of e-Commerce, while overall online sales contracted by around 18% in March 2020 in comparison to the previous year.” The OECD report also highlighted the impact of Covid-19 on e-Commerce’s share of total retail sales in the UK, USA and EU.

Writing in last Friday’s CHC.Newsflash, Nicholas Hall said: “Let’s take the best case point-of-view, that the incidence of Covid-19 will shrink dramatically during the middle of 2021, with a significantly lower death rate. How do we get back to normal? Will personal and professional life pick up where it left off? I doubt that very much. It seems to me that, at the very least, working from home is here to stay, which could mean the revival of suburban shopping, with lower footfall in city centres and out-of-town shopping malls. One impact on consumer health could be a marked revival in community pharmacy and online purchases growing from 9% to 19% of total CHC sales globally in the next 10 years, and from 11% to 27% in Asia. Another fascinating statistic courtesy of Eurostat is that, uniquely, the over-55 cohort is the largest purchasing group for medicines online, which runs counter to the theory that digital equals youth.

Don’t miss out on the chance to save up to 50% on selected reports with our Q4 promotional event, which will run until the end of the year! Stay tuned for new deals coming in December! To find out what promotions are available, or to make a purchase, please contact melissa.lee@NicholasHall.com

Top 2 brands powering global CHC growth

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Our blog this week looks at the performance of the Top 10 global consumer healthcare brands, in the context of the 5.6% upturn for the global CHC market in the year to end-March 2020. Inevitably, analgesics and cough, cold & allergy brands have enjoyed the highest rates of growth thanks to Covid-driven demand, with the Top 2 global brands, Vicks (+15.4%) and Tylenol (+18.3%), performing particularly well.

P&G’s CCA range Vicks now generates global sales of nearly US$1.5bn, and its double-digit growth in the MAT Q1 2020 period was powered by dynamic performances in Latin America and North America. In fact, high growth in the US market was behind the double-digit global upturns for both Vicks and J&J’s Tylenol, the latter generating sales of close to US$1bn in its home market.

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GSK markets four of the other Top 10 brands, including its powerful triumvirate of painkillers – Advil, Voltaren and Panadol. Growth for Advil and Panadol improved markedly in Q1, thanks to accelerated purchases as a result of Covid-19, while Voltaren experienced flat sales in the quarter. That said, the recent US Rx-to-OTC switch of Voltaren Arthritis Pain is expected to provide a significant boost to brand sales in Q2.

Halls also saw growth accelerate in Q1, although not to the same extent as other CCA brands like Mucinex, which rediscovered growth during the first quarter of 2020 to leap ahead of J&J’s Nicorette to reclaim the global No.9 spot. VMS brands Centrum and Nature Made missed out on the overall surge in demand for CHC products in Q1 – in general, growth in the VMS market has been focused primarily on immune supplements and vitamin C products.

Pre-order our upcoming Analgesics 2020: Assessing the Current & Future Self-Care Market for Pain Relief report before 31 July to save up to GB£1,800! Please contact melissa.lee@NicholasHall.com to order or to find out about special discounts available on purchases of more than one report title!

Survey shows growing support for pharmacies in Europe

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According to a YouGov survey, commissioned by Stada and focusing on four European countries (Germany, Italy, Spain and UK), hope and confidence in healthcare professionals has grown in the wake of the Covid-19 crisis, though the picture does vary from one country to the next. With measures to reduce coronavirus infection rates defining daily life, Spaniards show the greatest concern for their health (51%), while people in Germany, Italy and UK are less worried (36-39%).

Germans (18%) are least likely to believe their healthcare system has absolutely proven itself, while 47% of Spaniards gave their health system top marks, followed by the UK (35%) and Italy (29%). Spaniards (32%) and Italians (28%) are most likely to have avoided visiting pharmacies vs only 14% in Germany and 19% in UK. In total, one in five people have greater respect and more recognition of what pharmacies provide on a day-to-day basis.

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The potentially good news for community pharmacies in Europe is that the coronavirus crisis does not appear to be leading to a large number of people ordering more medicines online. In fact, only 6% of those surveyed say they are taking this action. However, it will remain to be seen how consumer attitudes to internet & mail order purchasing of OTCs change in the coming years, especially in Europe. According to DB6 VP, Celine Waller, internet & mail order is expected to account for 19.2% of the total CHC market within the next decade, more than doubling its share from 9.4% currently. 

The survey also highlighted the likely impact of Covid-19 on the VMS market in Europe. UK consumers and Germans are generally not motivated to take more vitamins or similar products (<9%). In Italy and Spain, the readiness to do so is higher, particularly for vitamin C, D and multivitamins (13-15%). Paying greater attention to nutrition and taking more exercise hold greater attraction in the southern countries than in Germany and the UK, where people are more likely to say that the coronavirus situation has not changed their habits. 

Ensure that you have registered to join Nicholas online for a special webinar presentation with Q&A, which will take place next week! On 29 April at 10:00-11:30 UK time, Nicholas will review 2019 CHC market performance, explore the impact of Covid-19 and identify growth prospects for the future. For those unable to join, there will be the option to purchase a recording and submit up to 3 questions via email. To find out more or to register to join, please contact elizabeth.bernos@NicholasHall.com without hesitation!

CHC market forecast to hold up well in 2020

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Forecasts released by Nicholas Hall’s CHC sales database DB6 project that the global retail CHC market is expected to slow to 3.5% in 2020 amid the Covid-19 pandemic.

  • Analgesics are expected to increase to 6.1% driven by strong sales of paracetamol-based systemics, while topicals are forecast to slow to 3.3% in spite of the switch of Voltaren in USA
  • CCA is projected to be the fastest-growing category with an increase of 6.5% boosted by coronavirus and reports of a high incidence of seasonal cold & flu at the start of 2020
  • GIs (+0.4%) and Derma (+0.8%) are expected to remain static as consumers cut back on non-essential purchases amid the tougher economic environment
  • Antiseptics & disinfectants are forecast to buck the low-growth trend in derma with a double-digit increase
  • Lifestyle CHC sales are predicted to slow to 1.8%, with erectile dysfunction (+13.2%) and sedatives & sleep aids (+7.8%) bright spots in an otherwise challenging category
  • VMS sales are expected to maintain growth of 3.4% with anticipated gains in some subcategories — notably vitamins C & D, zinc and immune supplements, offset by a deceleration in some other subcategories

The market is expected to bounce back in the longer term with a forecast CAGR 24/19 of 4.3% and CAGR 29/24 of 4.7% driven by switch, most notably of erectile dysfunction and daily oral contraceptives. CBD is not included in these retail forecasts.

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DB6 VP, Celine Waller writes: The Covid-19 pandemic has prompted an unprecedented surge in sales of certain CHC products as consumers have stocked up on essential medicines and sought products to protect their health. However, latest data points suggest that this spike has been short-lived with the market now stabilising and in some cases receding. We expect this trend to continue over the next few months, leading to a slight slowdown in CHC retail sales across 2020 in its entirety, although of course the industry is expected to be far more resilient than many others.

However, this only tells part of the story – as consumers are unwilling or not permitted to leave their homes, we expect an acceleration of the channel shift from bricks & mortar to e-Commerce. CHC sales in the Internet & Mail Order channel are forecast to increase by 22.5% in 2020. This will boost growth of the holistic “all channels” view of the market, which also includes CBD, to 5.0% in 2020 (an improvement on 4.3% in 2019). Internet & Mail Order is expected to account for 19.2% of the total CHC market within next decade, more than doubling its share from 9.4% currently. 

We are pleased to announce the latest DB6 market forecasts are now available! With over 150,000 pieces of data across 63 markets, DB6 now includes topline data across all channels of distribution, including e-Commerce! To find out more about our extensive database or to set up a free demo, please contact Kate.Holdcroft@Nicholashall.com.

Global CHC market up 3.9% in 2019

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Figures released by Nicholas Hall’s sales database DB6 show that in 2019 the global CHC market maintained its growth trajectory, increasing by 3.9%. Growth in USA improved, driven by a strong performance in CCA. Systemic cold & flu (+6.2%) performed particularly well, owing to higher incidence of pathologies.

Latin America was the best-performing region (+9.4%) with both Brazil and Mexico advancing by high single digits. Growth in Europe slowed to 2.6% with slight improvements in Germany, Italy and UK held back by decline in France and low growth in former powerhouse Russia. Asia-Pacific remained weak (+4.1%) with flat sales in Japan and Australia offsetting high single-digit growth in India. Leading APAC market China grew by 5.1%.

Analgesics was the fastest-growing category with a rise of 4.7%. VMS slowed to 3.5%, partly owing to a consumer shift to e-commerce. Derma (+3.1%) was the weakest category albeit with an improvement on its 2018 performance. 

Country

YE 2019 sales ($bn)

19/18%

USA

34.4

3.2

China

26.2

5.1

Japan

8.1

0.5

Germany

5.5

2.3

Russia

5.4

1.0

France

4.4

-1.2

Italy

4.2

3.0

Brazil

3.8

9.1

India

3.5

8.2

UK

3.0

3.0

GLOBAL CHC

141.5

3.9

The broader CHC market, encompassing all channels and CBD, increased by 4.3%. Direct sales declined owing to tighter regulations and negative consumer perception. Internet & Mail order slowed slightly as marketers adjusted to the inception of the E-commerce law in China (although still achieved growth of 12.4%). Meanwhile the nascent CBD market was the fastest-growing of all categories with sales up by 44.2%. 

Nicholas Hall’s Abroad Thoughts from Home: 2019 was somewhat disappointing, with growth of under 4% for the second year running. As before, our industry suffered from a lack of switches and the tailing off of expansion in the Emerging Markets, with weak results in Asia, although Brazil and India are notable bright spots.

All eyes will be on 2020 and the impact that Covid-19 will have on the CHC market. My colleague Celine Waller writes: “The DB6 team is currently reviewing early indications of market performance [some of which are reviewed in this week’s edition] and analysing to what extent the reported boost to immune supplements, paracetamol and antiseptics (among other categories) will be sustained throughout the year and whether it will be offset by a slowdown in other categories.”

The latest DB6 figures and general industry performance over 2019 will be reviewed in a special webinar session hosted by Nicholas, taking place on 29 April. To find out more or to register, please contact elizabeth.bernos@NicholasHall.com.

Global CHC market up 3.7% in MAT Q3 2019 period

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Figures released by Nicholas Hall’s sales database DB6 show that in the 12 months to end-September 2019 (MAT Q3 2019) the global CHC market increased by 3.7%, a slight improvement on its MAT Q2 2019 performance (+3.6%). Global CHC sales now total US$139.5bn.

USA maintained its growth rate (+2.7%) with slight improvements in CCA and analgesics being offset by slower performances in other major categories. Canada continued to perform poorly with sales up by just 1.9%, and the country has fallen to No. 12 position in the global rankings, behind Poland, which saw growth accelerate to 8.7%. Also contributing to an improved performance in Europe (+2.6%) were strong upturns for key markets Germany, UK and Italy, though Russia, France and Switzerland continued to decline.

Asia-Pacific remained weak (+4.0%) with China and India both slowing upon their MAT Q2 performances and all other leading Asian markets growing by under 3%. Japan reported consistent growth of 0.9%, while Australia (+1.8%) and South Korea (+2.2%) recorded modest upturns in Q3. Latin America (+9.1%) maintained its high growth trend with both Brazil and Mexico advancing by high single digits. Turkey also posted a strong performance (+18.0%), primarily driven by price inflation.

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Nicholas Hall’s Christmas Card: The global CHC market will struggle to reach 4% growth in 2019, at least in the Retail sector. By next March we will have 2019 data for all three channels, including Direct and Internet, and it will be interesting to see whether the industry matches the 5% growth achieved in 2018. Looking at the market very simply, there are three short-term drivers: a strong cold & flu season, and it does seem as though we will be sneezing a lot more in the months ahead; Rx-to-Switch, but 2019 is the second year of no significant switches, although Sanofi’s statement about Cialis and Tamiflu is welcome for the future; and the Emerging Markets, all growing significantly less than in the past as proved by our Q3 data.

Explore the Emerging Markets, Industry Consolidation and many other pressing issues in Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon! Nicholas also unveils his 15 ”Infinity Zones” that are crucial to the future growth of the industry in this essential report. You can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas for an additional GB£10,000. For more information, or to order your copy, currently available with a 15% discount until 31 December only, please contact melissa.lee@NicholasHall.com

Stada to rise up OTC rankings

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Two major M&A deals agreed in the past week look set to elevate Stada into the consumer healthcare global Top 20. In this week’s blog, we look closer at the details of each deal and, based on the calculations of our DB6 data division, where Stada may end up in the rankings once both deals are closed.

As part of Takeda’s goal to divest around US$10bn in non-core assets, the company has agreed to sell to Stada around 20 selected OTC and Rx products marketed in Russia, Georgia & CIS countries, for US$660mn. The portfolio comprises cardiovascular, diabetes, general medicine, respiratory and OTC supplement entries, and includes Russia’s leading systemic cardiovascular, Cardiomagnyl (aspirin + magnesium hydroxide).

Stada will acquire the rights, title and interest to the products in Russia, Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan and Uzbekistan, while under a manufacturing & supply agreement, Takeda will continue to manufacture the products on Stada’s behalf. The deal is expected to complete in Q1 2020 and, based on current assumptions, could elevate Stada into the No.7 position in Europe.

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Stada already takes the No.9 position among Europe’s Top 10 OTC marketers

Stada has also entered into an agreement to acquire Walmark from Mid Europa Partners for an undisclosed sum. Based in Czech Republic, Walmark is a leading consumer healthcare company in CEE with a direct presence in nine markets, while its products are available in 40+ markets globally. The company’s portfolio spans multiple categories, and key brands include Proenzi joint health range, Urinal urinary health brand, Biopron probiotics for gut health and Martians paediatric supplements. 

Stada’s Head of European Markets, Steffen Wagner, commented: “We are significantly strengthening our presence in Central Europe — especially in Czech Republic, Slovakia, Romania, Bulgaria and Hungary — as a result of this acquisition. We are also looking at ways in which we can market the Walmark brands outside of the current core geographies.” Again, the deal is expected to complete in Q1 2020, and the combined impact of these two acquisitions may raise Stada up as high as the No.14 position in the global OTC rankings.

You can now take a first look at the speaker line-up of industry experts who will be joining Nicholas Hall in Athens next year for our 31st European CHC Conference, taking place from 28th to 30th April! To reserve your seat at the early-bird discounted rate, or to find out more, including information on sponsorship opportunities, please contact Jennifer.ODonnell@NicholasHall.com or Lianne.Hill@NicholasHall.com

Global OTC market still subdued in Q2

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New figures from Nicholas Hall’s OTC sales database DB6 reveal that, in MAT Q2 2019 (the 12 months to end-June 2019), the global OTC market remained subdued, recording an increase of just 3.6% to total US$137.9bn in turnover. North America generated growth of 2.6%, with USA (+2.7%) improving slightly compared to MAT Q1; however, the market continues to be held back by a lack of switch activity. Canada performed poorly with sales up by just 2.1%.

In Europe (+2.1%), the OTC market also remained sluggish, with most key markets posting low single-digit growth, while Russia (-0.6%), France (-1.4%) and Switzerland recorded declines. Germany (+0.1%), Italy (+2.6%) and the UK (+1.1%) all managed modest increases. Poland was the one bright spot with a rise of 7.9%, driven by high levels of NPD and Rx-to-OTC switch activity. Looking at the Middle East & Africa, Turkey (+15.8%) remained the fastest-growing of the Top 20 markets, driven by high inflation.

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As for Asia-Pacific, growth decelerated to 4.2%, with slowdowns recorded in China (+5.3%), India (+7.5%) and Australia (+1.6%), while sales in Japan (+0.9%) remained flat. Both China and India were impeded by a comparatively low-key cough & cold season and weakening economies. Latin America (+8.3%) continued to be the best performing region, with the two largest OTC markets Brazil (+7.7%) and Mexico (+9.3%) showing resilience in the face of a challenging macroeconomic landscape.

Vitamins, minerals & supplements still generate the largest share (30%) of the global OTC market by major category, but growth slowed in Q2 to 3.7%. Key categories like probiotics and multivitamins reported slowdowns in Q2 2019, especially in the USA, which is struggling this year to replicate the strong performance of its dietary supplements market in 2018.

Nicholas Hall’s Future Opportunities & Growth Drivers in VMS – A Strategic Review of Vitamins, Minerals & Supplements is now available! This all-new report analyses a range of VMS categories including multivitamins, probiotics, OTC tonic drinks, mineral supplements plus many others, alongside looking at the latest trends, brand studies and launch activity. Click here to purchase your copy or to take a look at the full table of contents! To find out more about this key report, or to order your copy, please contact Melissa.Lee@NicholasHall.com

eCommerce expansion led by Amazon limits store-based growth

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Continuing our series of blogs on the 10 Infinity Zones for future CHC growth outlined by Nicholas Hall, in this edition we take a closer look at eCommerce, following the news that Amazon has become the world’s most valuable brand, according to the 2019 BrandZ Top 100 Most Valuable Global Brands ranking released by WPP and Kantar.

Commenting on the latest DB6 MAT Q1 2019 figures, which show that global bricks & mortar OTC growth decelerated to 3.7%, Nicholas Hall said that “Amazon goes from strength to strength, and takes a 75-90% share of all eCommerce sales of CHC products, depending on whom you listen to. These are the glory days for the so-called GAFAA companies (Google, Apple, Facebook, Amazon, Alibaba), but will it last?

Top 10 country MAT Q1 2019

The rise of eCommerce is one of the factors causing the slowdown in store-based OTC sales, which now total US$136.7bn. According to Celine Waller, VP, DB6, store-based sales account for 78% of the global OTC market, with direct sales generating 14%. Internet & mail order currently accounts for 9% of the “all channel” universe, with sales dominated heavily by VMS supplements in China and USA.

However, this channel has seen a CAGR of 20% since 2014 and will continue to increase dramatically in importance over the next decade. In China, Alibaba continues to prosper from the Chinese government’s attempts to promote eCommerce and regulate the so-called suitcase trade (daigou), while Amazon remains supreme in the US market.

To help keep our clients abreast of these changes, this year we have introduced an “all channels” version of the DB6 dataset, which reports on topline sales of direct sales (MLM), Internet & mail order plus key brands in selected leading markets. eCommerce will also 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 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.