OTC Innovation Report 2018

otcinaction

Lamenting the fact that Scott Gottlieb is stepping down as FDA Commissioner, Nicholas Hall commented in Friday’s OTC.Newsflash that: “Although producing few tangible results so far, FDA under Gottlieb has displayed a greater openness to finding new switch models at a lower cost and with shorter lead times, including the use of new technologies.” Nicholas Hall also said that “government support is vital to our industry” and that “more liberal regulations are at the heart of a successful self-care sector”.

A drop-off in switch activity over the past year is part of the explanation for lower levels of high-quality OTC innovation. In 2018, OTC New Products Tracker awarded just six products with 4 stars – eye care brands Lumify (USA) and Zabak Eye Drops (Poland), antacid Reza Band (USA) and antispasmodic Scopolan Compositum (Poland), plus Viagra Connect (UK) and allergy remedy Talerc (Brazil). Compared to previous years, this marked a falling-off in terms of 4-star innovations.

4*

The number of total OTC innovations (3,747) in 2018 was roughly in line with the previous year, and still much higher compared to 2014, 2015 and 2016. However, the number of 2* (528), 3* (94) and 4* (6) innovations was much lower, while the number of 1* innovations (3,119) was at an all-time high.

VMS continues to be a major source of innovation, with three of the Top 5 subcategories in 2018 – probiotics, multivitamins and hair & beauty supplements. Derma is another key source of innovation, with three of the Top 10 – acne remedies, eczema & psoriasis and lip care. The three other innovative subcategories which complete the Top 10 are sedatives & sleep aids, topical analgesics and sore throat.

subcats

Please contact us for the full report. You can also review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact requirements, now is the ideal time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

Advertisements

RB 2.0: E-commerce a key focus

OTCINACTION

With CEO Rakesh Kapoor retiring at the end of the year, and ambitious plans for RB 2.0 to be implemented within the next year, this is without doubt a transformational time for RB. Nicholas Hall believes RB 2.0 will lead to the “end-point of divesting the Hygiene Home business, and with the company quickly moving on to v3.0 and a major merger. I can think of at least four CHC companies that may want to be associated with RB v3.0, not all of whom could be considered equals, but who would be attracted by a cashless transaction and the benefits of scale.” 

RB released its full year results last week, with net revenue in 2018 up by 3% on a like-for-like basis, while Health grew by 2%. Within Health, the OTC segment rose by 5%, driven by innovations (Nurofen 24-hour patch, Strepsils flurbiprofen spray) and strong regional performances (Lemsip in UK, Luftal in Brazil, Moov in India and Tempra in Mexico). As part of its RB 2.0 mission, the company is planning to “supercharge” innovation even further, focusing on new categories (i.e. the launch of brain health supplement Neuriva later in H1 2019), new consumers and new channels (i.e. MegaRed and Move Free in e-commerce outlets in China).

Screen Shot 2019-02-25 at 11.48.54.png

In its 2018 results presentation, RB emphasised its “best-in-class digital and e-commerce capability” as a key driver behind RB 2.0 growth, highlighting the specific case of China where the company’s online sales already outweigh “offline” sales thanks to strong partnerships with the likes of Alibaba and JD.com. Innovations such as MegaRed CoQ10, Move Free Ultra and Move Free Advanced have been specially developed for the e-commerce channel in China and the USA. 

In its results, the company also reported that 9% of RB Health sales are generated in the e-commerce channel, which it says ranks second among its consumer healthcare peers, while its operating margin of 28% is way ahead of the consumer healthcare average. RB attributes its success in e-commerce to its FMCG heritage and its strong margins to the relatively high proportion of its portfolio devoted to Consumer Health vs key OTC competitors.

Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, our upcoming new Signature Report written by Nicholas, includes a chapter dedicated to reviewing M&A within the CHC industry. Exploring recent transactions, multiples and the buyers and sellers — with predictions of likely future deals — Nicholas also asks whether M&A actually works and examines the role of private equity. An essential read for all players striving to compete in this rapidly-evolving marketplace, for the full table of contents or to pre-order your copy, please contact melissa.lee@NicholasHall.com.

 

Vaping among middle-aged growing fast

OTCINACTION

According to a recent report by Mintel on e-cigarette and smoking control use in the UK, vaping among the middle-aged (45-54 years olds especially) has undergone a sharp rise. While only 13% of 45-54 year olds used e-cigarettes in 2016, this proportion has grown sharply to 20% in 2018, and this age group is also reported as being most likely (71%) to believe that vaping is fashionable.

Young people (18-24 year olds) are still the most prominent vapers; the share of e-cigarette use among this age group grew from 24% in 2016 to 28% in 2018. Although this represents a slower rate of growth compared to their middle-aged counterparts, over half of Brits (57%) still believe that too many young people vape.

UK vaping.jpg

Overall, about 19% of British adults vape, up from 17% in 2016, with men twice as likely to vape as women. Sales of e-cigarettes are reported to be performing well, with the market experiencing strong growth of 12% in 2018, to total £283mn (US$366mn). This is compared to a UK smoking control market declining by 1%, according to the latest OTC DASHBOARD MAT Q3 2018 figures, a trend caused by smokers turning to e-cigarettes rather than traditional NRT when cutting back on tobacco.

In his latest message to the consumer health industry, Nicholas Hall wrote about the importance of true innovation, including the following points:

• Embrace the outer adjacencies of consumer health, of which sexual health, e-cigarettes / vaping and medical cannabis are the most interesting, potentially adding another 20-30% to CHC market sales; BUT, every time I propose these categories to a client, all I hear is a sharp intake of breath, followed by a nervous giggle

• Refocus on organic growth, which means more differentiation of the new products we launch. Our OTC New Products Tracker (see below) has recorded 17,000 launches in the past 6 years, of which 99 appear to be game-changers and another 1,000 have a genuine point of difference. But I’m sorry to say that for many of the other 93%, the marketers would have done better to keep their money in the bank, even at 0.1% interest.

Review 17,000+ new launches and innovations with OTC New Products Tracker, the ultimate competitive intelligence tool! Products are given a star rating, with “me too” items ranked 1*; launches / line extensions in a new category / adjacency 2*; major launches / line extensions with strong new benefits / positioning 3*, and 1st Rx-to-OTC switches in a category, creation of a new OTC class or other major leaps in innovation 4*. With a recently-released major update including eye-catching new graphics and powerful search filters that help you visualise and explore the vast archive according to your exact requirements, now is the ideal time to set up your free trial. For a demo or more information, contact waisan.lee-gabell@NicholasHall.com.

Sleep disorders on the rise globally

OTCINACTION

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.

Screen Shot 2018-11-05 at 10.41.59.png

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

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

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

Asia-Pacific Creativity in Consumer Healthcare Award

Panadol 1st

Systane 2nd

Bactidol 3rd

Worldwide Digital in Consumer Healthcare Award

Insto 1st

OBH 2nd

APAC New Product of the Year in Consumer Healthcare Award 

Scotts DHA Gummies 1st

Dimetapp Ultra Plus 2nd

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

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

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

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

J&J Focuses On Consumer Innovation In Africa

OTCinActionheader

As part of its ongoing commitment to Africa, J&J has announced the launch of the Africa Innovation Challenge. The project will support Africa’s growing ecosystem and help develop consumer health solutions for local towns.

Earlier this year, J&J announced its global public health strategy in Cape Town, South Africa. The operations expand upon the company’s presence in Africa, which began in 1936.

“Our goal is to improve the health and wellbeing of families and communities around the world,” said Josh Ghaim, J&J’s Chief Technology Officer, Consumer R&D. “With its focus on consumer healthcare, the Africa Innovation Challenge will help to surface important issues impacting local communities. We look forward to engaging with the continent’s top entrepreneurs and scientists, and through collaboration, helping advance their ideas and bringing meaningful solutions across three very important healthcare areas.”

Johnson-and-Johnson-Africa-Innovation-Challenge-2-770x473.jpg

The Africa Innovation Challenge seeks ideas focused on three critical health areas, promoting early child development and maternal health; empowering young women; and improving family wellbeing.

Challenge participants with successful solutions will receive up to US$100,000 in funding and mentorship from scientists, engineers and researchers in the J&J Consumer Research & Development organisation.

The news of J&J’s latest innovative challenge comes alongside the recent decision to drop ‘McNeil’ from their OTC business name, opting for J&J Consumer instead.

To apply to the challenge and review the applicable terms and conditions, please visit the Africa Innovation Challenge website. The deadline to submit applications is 17th January 2017.

OTC DASHBOARD is your sole Nicholas Hall & Company source of regular updates on the OTC market in Africa and the Middle East. Explore our Rest of World section for the latest content.

OTCs in Action Episode 39: OTC launches modest but meaningful in Denver

OTCinActionheaderOTCs are in Action this week in the beautiful city of Denver, Colorado, where the National Association of Drug Stores is convening its Total Store Expo. Sunday morning, NACDS Chairman of the Board, Randy Edeker, chairman, CEO and president of the Hy-Vee pharmacy chain, told the story of how he always researches his illnesses and how to treat them, so when he went to the doctor, she joked, “Why do you come here?” He replied, “I can’t write a prescription”.

Products to help consumers take charge of their health are everywhere at this trade show. National Pharma’s Naramin (diphenhydramine) in pre-filled single-dose “whistle” dispensers; TempTraq (Blue Spark Technologies), a single-use, wireless, wearable thermometer patch for kids; and Go Drive with Energy! (Fusion Biotech) dietary supplement specifically formulated for drowsy drivers, are among the many new products promoted.

NEW_GoDrive-20ctThese products are not exactly the game-changers industry might expect from an Rx-to-OTC switch, for example. However, they are true OTCs in the sense that they solve real problems with practical applications for self-treatment. Naramin allergy treatments are fun and portable for on-the-go families; TempTraq makes temperature monitoring easier for parents, and Go Drive with Energy! targets tired drivers with a unique product. Maybe they will have a Go Write with Energy! launch next year for journalists worn out from hours of walking the show floor.