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.

MAT Q3 2019 Top 10.jpg

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.

MAT Q2 2019 Top 10.jpg

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.

Q3 2018: Global OTC growth steady at 4.3%

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According to the latest MAT Q3 2018 figures from DB6 – released at the end of last week – the global OTC market maintained 4.3% growth in the year to end-September 2018. As our graph below shows, the world’s two largest OTC markets, USA and China, still overshadow the rest of the Top 10 and growth for both markets in Q3 was faster than any of the other Top 5 countries.

US growth was up slightly to 2.6% (vs 2.5% MAT Q2 2018), where a slower performance in CCA was offset by improvements across all other major categories. Asia-Pacific grew by 4.9%, with mixed performances among the top markets. While growth remained steady in China and India, Japan sales continued to weaken (+0.3% vs +0.6% MAT Q2 2018) and Australia remained subdued (+0.9%).

Top 10 CHC markets MAT Q3 2018

Top 10 Markets Q3 2018.jpg

Half of the Top 10 markets are still located in Europe, though growth for the two biggest – Germany and Russia – was in the 1-2% range in Q3, while for the other three – France, Italy and the UK – it was in the 2-3% range. Overall, Europe’s OTC performance remained constant, increasing by 2.9%. Western Europe was up by 2.4%, with France continuing to advance but Germany hindered by weak CCA sales, while growth in Central & Eastern Europe was up 4.1%.

Middle East & Africa growth was stable at 6.6%, with double-digit growth in Turkey (+12.9%) still behind the strong upturn. Latin America (+12.8%) growth remains driven by high levels of inflation, with the largest market Brazil up by 10.8%. Commenting on the Q3 results, Nicholas Hall said: “This [Brazil] is the world’s 8th largest CHC market, and will probably overtake Italy in 2019. The economy is totally flat and inflation is running at almost 5%; in that sense CHC is holding up well in this very important market.

Nicholas Hall’s DB6 MAT Q3 2018 figures are now available! DB6 features over 24,000 records and covers 10,000+ brands and more than 2,500 companies, offering complete coverage across 64 countries. To find out more about this essential service, or for a free demonstration, please contact kayleigh.griffinhooper@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.

 

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’).”

DB6-MAT-Q3-2017-Dashboardlogo

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.”

Q1 2017: Early analysis of the global OTC performance

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Nicholas Hall’s global OTC database, DB6, has just published its latest figures relating to the Q1 2017 performance of the OTC market, and below are some standout trends based on early analysis of the data. Over the coming weeks, our OTC INSIGHT research teams will be compiling the latest trend info at a regional and Top 20 country level, and we’ll alert you as soon as this analysis has been uploaded to the OTC DASHBOARD website.

1. Russia returns to higher growth (+18.2% MAT Q1 2017 vs +11.3% full-year 2016)

A key factor in the slightly improved performance of the global OTC market in the 12 months to end-March 2017 (+4.5%) vs full-year 2016 (+4.3%) was higher growth in Russia. While a modest upturn in the world’s No.1 OTC market, USA, was offset by decelerating growth for both No.2 market China and No.3 market Japan, it was the European countries – largely No.5 Russia, but also No.4 Germany – that accounted for the improved performance of the global OTC market in Q1 2017.

2. CCA growth at the heart of Europe’s revived fortunes in Q1 2017

Global CCA sales were up 4.7% in 2016, thanks to a strong end to the year, and this trend continued into the first quarter of 2017, with growth accelerating to 6.3% in the MAT Q1 2017 period. Europe was largely behind this upsurge, with CCA growth in Western Europe showing a marked improvement (+3.8%), while Central & Eastern Europe was the biggest source of dynamism (+17.8%), led by Russia and Poland. This trend extended to the rest of the northern hemisphere, with North America also reporting higher CCA growth (+4.4%) in the MAT Q1 2017 period, with Canada especially vibrant (+6.9%).

3. Global Top 5 stays the same, but J&J may overtake Sanofi by mid-year

While the Top 5 global OTC marketers – GSK, Bayer, Sanofi, J&J and Pfizer – remain fixed in position and adrift from the rest of the competition, the battle for the No.3 spot between Sanofi (+3.8%) and J&J (+4.1%) continues to intensify. On current trends, it looks as though J&J may overtake Sanofi by the end of Q2 2017, and we will confirm the outcome of this battle later in the year.

In the meantime, please check your weekly briefings and OTC DASHBOARD‘s Charts & Graphs archive for more early analysis of the Q1 2017 results over the coming weeks.