Retail CHC growth set for mid-single digits in 2023

GLOBAL: The soon-to-be published market forecasts from Nicholas Hall’s Global CHC database DB6 indicate that the global retail CHC market is expected to perform well in 2023, advancing by 5.7%, softening slightly from the strong return in 2022 (+7.2%). Although likely to maintain good growth, we expect a slowdown in the comparatively high rates observed in categories such as cough, cold & allergy and analgesics, and expect others to maintain consistent performances or advance over 2022. Inflation remains a factor in many markets globally, impacting the nominal DB6 projections, and helping to keep the short-term outlook buoyant.

In the longer term, the market is forecast to grow by CAGR 27/22 of 5.2% and CAGR 32/27 of 5.7%, in part driven by Rx-to-OTC switch, most notably of erectile dysfunction and daily oral contraceptives. Projections for the broader CHC market, encompassing all channels and CBD is being finalised, but is expected to push the 2023 global projection to a higher level, and will continue to be spearheaded by the dynamic internet & mail-order channel. 

Nicholas Hall Writes: As you can imagine, I’m fully focused on this week’s London conference; and what a pleasure to be able to hold meetings face-to-face! It’s a year since we met in Athens, which felt like an enthusiastic group of friends and colleagues who had been let out of school after three years. One year on, my sense is that executives still do not travel as much as before and I know that the atmosphere will be very good in London. As well as excellent presentations, we’ve lined up amazing networking opportunities, and the delegate dinner will be held on a river boat, always a favourite destination for participants. 

In terms of content, there are too many highlights to list here, but I’m particularly looking forward to unveiling our new Strategic Narrative, showing the prevailing opportunities and relatively new threats to consumer health, which continues to hold up remarkably well. According to our lead story this week, 2023 is forecast to be well ahead of the pre-pandemic years, which is an outstanding achievement bearing in mind the many threats faced by our industry. Of course, store retail is only part of the picture, although by far the biggest. When we add in e-Commerce and CBD, and the less dynamic multi-level sector, our growth forecasts for the next 5 and 10 years will impress those within our industry and those looking in from the outside.

Hear from Frank Bacuet, Global Growth & Strategy Director at PricingOne, during our 33rd European CHC Conference, taking place in London next week! You can also expect to hear from experts from companies including J&J, Haleon and Perrigo. See the latest agenda here, or to register without delay, contact elizabeth.bernos@NicholasHall.com.

Stark 2023 growth warning from IMF head

The Managing Director of the International Monetary Fund has cautioned that 2023 is going to be a “tough year”, with one-third of the world economy expected to be in recession. The three big economies, USA, EU and China, are slowing simultaneously, translating to negative trends globally. Kristalina Georgieva added in an interview with the CBS News programme Face the Nation that, while USA is most resilient and may avoid recession, the strong labour market is a “mixed blessing” as interest rates could remain tight to lower inflation.

Meanwhile, half of the EU – severely hit by the war in Ukraine – will be in recession this year and China, which in 2022 slowed dramatically because of its zero Covid policy, will slow down further (+4.4% growth in 2023 projected) as the relaxation of restrictions leads to soaring coronavirus cases. Overall, IMF forecasts that Advanced Economies will grow by 1.1% in 2023, while Emerging Market and Developing Economies will rise by 3.7%, led by India (+6.1%) but dragged down by Russia (-2.3%).

When asked what leaves her hopeful, Georgieva said: “I know when we work together, we can overcome the most dramatic challenges. In 2020, the world came together in the face of tremendous threat and was able to overcome this threat. In 2023, we have to do the same.” 

Nicholas Hall Writes: For most of 2022 I wrote in CHC.Newsflash about a market performing surprisingly well, but there was an implicit warning that the party would come to an end one day. Kristalina Georgieva, head of the IMF, has issued a stark warning of tough times ahead economically, but that is light reading compared with Nouriel Roubini’s new book, “Megathreats”, which highlights the 10 trends that imperil our future. Known by some as Dr Doom, Roubini prefers to be known as Dr Realistic, but in my estimation he is Dr Right as he called out many past mistakes with great foresight, including the debt binge that has made the global economy today almost unmanageable.

So how will these megathreats affect Consumer Health? In one sense, we are privileged as healthcare is a must-have category, and self-care will fill part of the vacuum left by the inability of healthcare providers to meet the needs of a growing and demographically-unbalanced population, about which Dr Roubini also writes persuasively. But consumers can only spend the money in their pockets, regardless of whether it is earned or borrowed, which is why I am so concerned about the future of CHC brands and why generics and private labels are now seen as the new growth segment.

I’m also concerned about the viability of retailers and even e-Commerce platforms, as the economic crisis will lower customer footfall and push up costs including the cost of borrowing, forcing thousands of outlets to close. We are already seeing that as a sub-plot of today’s global medicine shortages. Partly this is a story of unpredictable demand caused by the afterwave of the Covid-19 pandemic, but it also seems to me that the supply chain has become very fragile as companies look for ways to cut costs by reducing inventory to breaking point. So our 2023 mission here at the Nicholas Hall Group is to reassess the Strategic Narrative for Consumer Health and offer advice to clients and the industry at large on how to survive mega- and microthreats.

We are pleased to announce that experts from Haleon, Perrigo and PAGB, plus our sponsors Pharmalinea will take the stage alongside Nicholas at our 33rd European CHC Conference! See the all-new agenda here. Taking place in London on 19-21 April 2023, save with the early bird booking discount when you book your place before 19 January! For more information, or for group booking discounts and sponsorship opportunities, please contact elizabeth.bernos@NicholasHall.com.

Global social media ad revenues stall

The winter update of the MAGNA (IPG Media Brands) Global Ad Forecast predicts that media owners’ advertising revenues will reach US$833bn in 2023, up 5% vs 2022. Despite challenging economic conditions, traditional media companies (TV, audio, publishing, out-of-home) saw ad revenues grow by 2.5% this year, while digital media companies grew by 9%. This is the narrowest growth gap ever observed by MAGNA, signalling that editorial media brands remain attractive and relevant as they now combine brand safety with cross-platform reach.

Multiple factors, including plateauing reach & usage and targeting limitations (as a result of Apple’s post-iOS 14 environment), combined to cause social media advertising to stall in 2022: global sales grew by just 4.4% to US$149bn, well down on the growth rates of 20-35% observed in the previous three years. TikTok is the only social media owner to post advertising growth, while incumbent social networks suffered flat or declining ad sales, especially in Europe and North America. MAGNA expects social media advertising to accelerate only slightly in 2023 (+6.8%).

Vincent Létang, EVP, Global Market Research at MAGNA and author of the report, said: “Advertising spending slowed down in the second half of 2022 because of economic uncertainty and issues affecting digital advertising formats, but traditional editorial media managed to grow by +2.5%. The gap in growth rates with digital advertising growth (+8.9%) was the narrowest ever measured by MAGNA, suggesting that the long-term transition to a digital-centric marketing landscape has slowed down following the Covid acceleration.“

Nicholas Hall Writes: “What are the ideal channels of distribution and communication post-Covid, when consumers clearly are omnivorous and want the best of all possible worlds and flexibility in choosing brands and spending their hard-won cash in this global recession? It seems that there has never been a greater need for searching questions about the validity of brand strategies and marketing execution, which is needed both within companies and in media like CHC.Newsflash.“

For more information on the news service, or to set up a trial of CHC.Newsflash or CHC.NewDirections to kickstart your 2023, contact melissa.lee@NicholasHall.com.

Humanity hits milestone of global population of 8bn

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

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

^{Source: UN}

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

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

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

Red Bull owner Dietrich Mateschitz dies

Billionaire global businessman, Formula One figure and philanthropist Dietrich Mateschitz has died at the age of 74 years. The co-founder and 49% owner of Red Bull was working in marketing at Blendax (now owned by P&G) when he discovered Krating Daeng – the drink that would become Red Bull – while travelling in Thailand. Following a few modifications, the iconic beverage was launched in Austria in 1987 and went on to become a global market leader among energy drinks. In a statement, Red Bull noted: “In these moments, the over-riding feeling is one of sadness. But soon the sadness will make way for gratitude – gratitude for what he changed, moved, encouraged and made possible for so many individual people. We will remain connected to him respectfully and lovingly.” 

Nicholas Hall Writes: Red Bull is an outstanding marketing success, and not just because it has sold over 100bn cans worldwide since it was launched in 1987. But the story begins a lot earlier: pharmacist Chaleo Yoovidhya was the son of poor Chinese immigrants to Thailand. He set up TC Pharma which became a success with revenues of about US$300mn and a very nice business marketing stimulants in (I would have to say, boring) brown bottles labelled as Krating Daeng (Red Bull). The consumer audience consisted mainly of truck drivers who needed to stay awake at the wheel while navigating Thailand’s famous traffic jams. Chaleo always claimed that Krating Daeng was a stroke of “divine inspiration” when he launched the brand in 1976. Dietrich Mateschitz was the second “angel” to become involved in the progress of the brand. He bought a bottle to overcome jet lag during a visit to Thailand, saw the immense potential lying dormant within the brand, invested US$500,000 alongside the same amount from Chaleo, and simply reinvented Red Bull, making it an energy drink for sportspeople and other on-the-go individuals, and a sexy lifestyle product for young nightclubbers.

Chaleo died in 2012 aged anywhere between 80-90! He gave various birthdates, maybe to get more birthday presents, and was reputed to be worth US$5bn when he died. Unlike Chaleo, we can be sure of Dietrich Mateschitz’s age, but not his wealth. In 2008 Forbes estimated that Chaleo and Mateschitz were worth US$4bn, but presumably the company is worth a lot more now. I mention these eye-watering amounts just to prove that real innovation can pay back handsomely. And if you say that Red Bull is just 5 cups of flavoured coffee in a can, I think you miss the point that innovation is not just about formulation, but is the whole marketing clothing of a brand. That is especially true in consumer health, where product innovation is frankly quite limited.

And that raises another question: is Red Bull a CHC product? Well, energy is an OTC indication, and every sale of Red Bull is US1.65 (the global average price per can) not spent on, say, Berocca Boost. It remains an aim of our industry to offer consumers and retailers a non-addictive energy product with vast scale, but we are nowhere near … yet!

Join Nicholas and a group of industry experts to explore key trends impacting CHC at our Asia-Pacific e-Conference, taking place online on 23 November. The event will also include the presentation of our Regional CHC Creative Marketing Award. For more information, or to register, please contact elizabeth.bernos@NicholasHall.com.

Covid’s lasting impact on immune health perception

A report from Dutch-based health ingredients company Nutrileads highlights the fundamental change in consumer views on immune health in the wake of Covid-19. The report draws on data gathered by FMCG Gurus from surveys conducted with 45,000 consumers in 15 countries from 2019-22. Not only is immune health significantly more important to consumers, it is also perceived to have a far-reaching impact on long-term health and wellbeing.

For two-thirds of participants, immune health is their top health priority over the next 12 months – more than any other issue including digestive and heart health. In addition, 78% view poor immune health as being easily susceptible to long-term health problems, while 40% are taking a proactive approach to their immunity, even if they believe they are in good health. Consumers also expect more from immune health products; the top three claims they want to see on the product label are scientifically validated and clinically-proven (82%), multifunctional benefits (79%) and helps lead a healthy lifestyle (79%).

Comment from Nutrileads CEO, Joana Carneiro: This research shows us that the experience of living with the pandemic is likely to have a lasting effect. Consumers are more knowledgeable about immune health and place more importance on improving it on the longer term.

Nicholas Hall Writes: “The latest research gives us a better understanding of consumer perception of immunity after 2.5 years of Covid, and the sustained interest in using dietary supplements. But I still see a paradox in matching this consumer U&A data with the relative failure of specific immunity products such as antiviral nasal sprays … So why is it that consumers who fear Covid-19, and who subscribe to the concept of immunity, are content to rely on, say, a multivitamin – the category grew by 13.5% globally in Year 1 of the pandemic – and not divert to specialist products? I am still searching for an answer.”

In just over a month, you can log on to hear from Nicholas and industry experts during our Asia-Pacific e-Conference on 23 November! Topics on the agenda include the go-to-market model, self-care collaborations and sustainability through accessibility. For more information, or to register, please contact elizabeth.bernos@NicholasHall.com.

Hologic Survey: Women’s Health Worsened in 2021

The 2021 Hologic Global Women’s Health Index, a survey of almost 127,000 women and men in 122 countries, shows that health situations for women did not improve in the second year of the pandemic and many worsened. Hologic launched the survey in 2020 in partnership with Gallup to assess how female health & wellbeing needs were being met.

Preventive care, which is still inaccessible to many women, remains the weakest of all health dimensions: some 60% of women in 2021 (equating to a population greater than 1.5bn) reported that they were not tested for four of the most frequent, fast-growing, and / or deadly conditions globally: just 12% of women were tested for any type of cancer, 34% for high blood pressure, 19% for diabetes and 11% for STDs / STIs. Emotional health is also a key dimension, with a growing body of evidence that it can affect cardiovascular health and other physical health risk factors.

^{Source: Hologic Global Women’s Health Index report}

Nicholas Hall Writes: It’s a sad fact that women were more stressed, worried, angry and sad in 2021 than at any other point in the past decade, according to this insightful survey, with 43% of the sample claiming to have experienced worry and 41% stress during much of the day before the survey was conducted.

The Hologic Chairman, Stephen MacMillan, commented: “No matter what pandemics, wars or other crises roil our societies, we must commit ourselves to improving the health of women, because they form the backbone of our families, communities and societies.” That is so true! Yet looking through the narrower lens of consumer health, we offer very few specialist products for women beyond feminine intimate health.

Log on to hear from Nicholas and experts from Bayer, Havas Health and more at our Asia-Pacific e-Conference on 23 November! You can expect insights into sustainability, the Go-To-Market model and self-care collaborations. This online event will also include the presentation of our Regional CHC Creative Marketing Award. For more information, or to register, please contact elizabeth.bernos@NicholasHall.com.

Global CHC market +2.6% in MAT Q3 2021

The latest update from Nicholas Hall’s CHC database, DB6, shows that in MAT Q3 2021, the store retail CHC market advanced by 2.6%, a continued improvement over results seen throughout the year (vs -0.6% and +1.7% for MAT Q1 and Q2 respectively).

• Vitamins, Minerals & Supplements (+6.1%) maintains its position as the fastest-growing category, albeit at a slightly slower rate. Stabilising immune-associated segments still contribute to a healthy topline performance as consumers continue to bolster natural defences; this, coupled with improvements in other subcategories (notably a return to growth for probiotics) has helped to keep the largest major category buoyant

• Lifestyle CHC growth advanced to +5.9%, with eye care — the largest subcategory — returning a mid-single digit increase (+5.4%); this, alongside sustained double-digit increases in sedatives & sleep aids (+13.8%), as well as smaller categories such as emergency hormonal contraception and erectile dysfunction, boosted the topline

• Gastrointestinals growth improved (+5.2%) with all subcategories once again seeing an upturn over the previous reporting period — a return to some “normalisation of life” (travel, dining out, etc.) has helped the wider category advance

• Analgesics saw a further improvement overall (+3.6%) boosted by systemics returning to growth (+1.9%) after successive negative results, as well as consistent gains in topical formats (+7.2%)

• Dermatologicals slowed further to +0.6% (vs +3.9% MAT Q2 21), a trend heavily impacted by the performance of antiseptics & disinfectants — the subcategory now declining by 9.8% following high growth levels seen in the peak of the pandemic

• Cough, Cold & Allergy remains negative, with sales retracting by 5.3% in the 12 months to end-Sept 21. However, the macro trend continues to improve over the previous reporting periods (-14.5% and -9.7% for MAT Q1 and Q2 respectively) as incidence of typical seasonal pathologies rises vs a low comparator in 2020, with many players reporting improvements in quarterly terms

In terms of geographies:

• Americas advanced by 2.4% (vs +1.3% MAT Q2 21) – N America now displaying a positive trend with continued improvements in USA & Canada. LatAm markets remain strong, with another double-digit result in Brazil (+12.1%), the most robust of the Top 20 markets

• Asia held on to mid-level growth (+4.8%) in the reporting period; while the region continues to be impacted by loss of revenue from overseas visitors in key markets Japan (-2.1%) and Australia (-2.9%), steady single-digit increases in China and India helped to maintain the topline

• Europe’s performance has flattened; Western European markets are improving (-2.0% vs -4.4% MAT Q2 21), impacted by the analgesics growth trend returning to positive, plus a softening decline for CCA over the previous reporting period. CEE markets advanced further, aided by mid-single-digit gains in Poland (+4.8%)

Nicholas Hall commented: Good news! My colleague Kayleigh Griffin-Hooper tells me that the latest DB6 data show that the store retail CHC market continued on a path to recovery in the 12 months to end-September. Broadly speaking, the majority of markets are returning to slightly stronger growth – or softer declines – compared to MAT Q2. Trends remain heavily influenced by the impact of Covid-19 across several healthcare segments – both positively and negatively – resulting in low level advances on a global level.

In three months’ time, when we have sales data for the Internet channel, it will be interesting to see whether this high-growth sector fully balances the softness in store retail sales.

We are pleased to announce that Nicholas Hall’s DB6 MAT Q3 2021 update is now available! Subscribers can access over 150,000 pieces of data, with more than 30,000 records covering 13,000+ brands and 3,000 companies across 63 countries. To find out more, or to set up a free demo, please contact kate.holdcroft@NicholasHall.com.

WHO highlights shortage of innovative antibiotics

The world is still failing to develop desperately-needed antibacterial treatments, despite the urgent threat of antibiotic resistance, according to a World Health Organisation report. None of the 43 antibiotics in clinical development sufficiently address drug resistance in the most dangerous bacteria. The majority offer limited clinical benefit over existing treatments, while 82% of recently-approved antibiotics are derivatives of older products with well-established drug-resistance.

WHO highlights 27 non-traditional antibacterial agents, ranging from antibodies to bacteriophages, and therapies that support the patient’s immune response and weaken the bacteria’s effect. However, while there are some promising products in development, only a fraction will make it to the market, owing to economic and scientific challenges. The low return on investment from successful products has limited the interest of major private investors and most large pharma players, and the small to medium-sized companies driving the pipeline often struggle to finance their products through to regulatory approval. 

_{Source: World Health Organization}

Nicholas Hall Writes: “Just when you thought it was safe to go back in the water (to quote the movie “Jaws”), the World Health Organisation reminds us that there could be more and worse to come. The worldwide pharma industry has responded magnificently to Covid, and if a fraction of that effort went into the search for new antibiotics, we could perhaps avoid the next and possibly much worse pandemic, when superbugs attack mankind. I’m not referring to hacking from within the Dark Web, but bacteria for which existing antibiotics will be unable to cope! One medical expert has described this as making Covid look like a vicarage tea party!

To quote WHO: “Opportunities emerging from the Covid-19 pandemic must be seized to bring to the forefront the needs for sustainable investments in R&D of new and effective antibiotics … We need a global sustained effort including mechanisms for pooled funding and new and additional investments to meet the magnitude of the AMR (antimicrobial resistance) threat.” So I hope that Big Pharma will recycle the windfall from Covid vaccines into new antibiotic research, otherwise we will have many more years of lockdown!”

Immunity will be the focus of our next round of regional hot topic webinars, starting with a focus on Asia-Pacific on 19 May, followed by the Americas on 23 June and Europe on 21 July. Please contact elizabeth.bernos@NicholasHall.com to find out more about these upcoming sessions.