Latin America a ray of CHC light

otcinaction

As reported in our MAT Q2 2019 update, the Emerging Markets have produced mixed performances in recent quarters, with consumer healthcare growth in both China and India impeded by a relatively low-key cough & cold season and weakening economies. Over the weekend, it was reported that India’s economic growth slowed further in the third quarter, highlighting the depth of the downturn afflicting a nation that was only recently revelling in its status as the world’s fastest-growing large economy. 

One region that continues to produce above-average consumer growth, however, is Latin America – CHC sales grew by 8.3% in the MAT Q2 2019 period – and Nicholas Hall recently returned to São Paulo for our 5th Latin American Consumer Healthcare Conference. Reflecting on his trip, which also included a workshop in Mexico City, Nicholas Hall said “the topics that aroused most curiosity at these meetings were e-commerce, cannabis, probiotics, industry consolidation and, inevitably, regulations, with Brazil travelling in one direction (liberalisation) and Mexico the other.

Strong growth in Brazil has been also been fuelled by higher levels of launch activity, with our OTC New Products Tracker service showing a strong spike in the number of innovations recorded in 2018, totalling just over 250.

Brazil 2015-18.jpeg

Below is a summary of some of the Key Learnings from our Latin American CHC Conferences:

• As we enter the 4th industrial revolution, it is important to question traditional business models & sales strategies

• Innovation is not limited to NPD (new product development); within an increasingly saturated market with tough regulatory obstacles, we should explore new business models & sales strategies

• Traditional market research methods are deeply flawed but the wealth of consumer data that advancing technologies (such as wearables) provide could be a goldmine of opportunities

• LatAm lags behind other global regions in eCommerce owing to regulatory hurdles, high levels of fraud & a lack of consumer trust in online platforms

• Precision marketing – using online influencers & product placement – can help connect with more clustered consumers

• While HCPs might be interested in features, consumers want benefits!

• Content marketing – particularly focusing on preventive healthcare – could be key to improving low levels of health literacy and the burden this places on national healthcare services

A detailed write-up of both our São Paulo & Mexico City conferences will be included in the next issue of Insight Latin America. To receive a copy of this article, contact Melissa

Food intolerance category shows huge promise

otcinaction

For the next instalment in our series of blogs on Nicholas Hall’s Infinity Zones for future CHC growth, we take a closer look at the growing issue of food intolerance, driven by unhealthy eating and the rise of processed food with additives, as well as changing diets across the world. Currently a driver of GIs growth, food intolerance has the potential to break out and become its own OTC category, and Nicholas Hall is urging CHC companies to seize this huge opportunity in the face of any future competition that might come from mainstream food companies, as was the case with functional foods.

A 2016 Nielsen study showed a high prevalence of food intolerance across various regions – the percentage of those who say someone in their household has food intolerances / allergies was 22% in Europe, 31% in North America, 34% in Latin America and 42% in Asia-Pacific, with children more likely to suffer than adults. Food intolerances (lactose, cruciferous vegetables, gluten, fructose, etc) can cause a variety of challenging symptoms for those affected, and new product development is catering for this fast-growing market.

Screen-Shot-2017-03-28-at-8.12.39-pm

Lactose intolerance is the most established niche, with lactase supplements (an enzyme that helps digest lactose) generating sales of roughly $65mn in 2018. Lactase supplements are fairly well-established in North America and Europe, with J&J’s Lactaid a key brand in the USA, while Latin America – especially Brazil – remains a current hotbed of innovation. Other intolerances are also increasingly being catered for with new products such as GluteoStop (Ineo Pharma) in Germany / Switzerland and Glutenam (Named) in Italy for glucose intolerance, and Fructaid (Pro Natura) in Germany for fructose intolerance.

Marketers of diagnostics and probiotics have also recognised the potential of this category. Lykon has launched MyNutrition 100 in Germany and UK (retailing for between $110-125), an at-home kit positioned to test for food intolerance across the 100 most common foods, while Montefarmaco extended probiotic brand Lactoflorene in Italy in 2019 with Lactoflorene Digest, claimed to promote the balance of intestinal flora that can be compromised by digestive disorders such as lactose intolerance.

Food intolerance will 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 in more detail 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.

East to power global economy in 2019

OTCINACTION

According to the latest research from the Economist Intelligence Unit (EIU), several countries in Asia-Pacific, the Middle East and Africa will produce the highest economic growth in 2019, while North America, Europe and even Latin America will lag behind. There are some exceptions to this trend (like Poland and Ireland in Europe, which are forecast to outperform the global economy in 2019) but the general picture shows that the highest GDP growth will be in the east.

Although there are concerns about the economic slowdown in China – see our blog just before Christmas and the recent letter from Apple CEO Tim Cook to investors – the country is expected to remain among the best-performing economies in 2019, with a growth forecast of 6.3%. The EIU revised up slightly its China forecast for 2019, following the agreement reached between the US and China at the G20 to delay planned tariff actions. However, it remains uncertain whether a bilateral trade deal will be reached.

Screen Shot 2019-01-07 at 09.30.37.png

China’s troubles may actually be providing a boost to neighbouring Asia-Pacific markets, such as Vietnam, which offer an alternative manufacturing location. Also, as we’ve highlighted on the blog previously, several African markets have likewise been boosted by their growing status as manufacturing hubs, notably Kenya. As for India, it is forecast by the EIU to be among the Top 5 fastest-growing economies in 2019, continuing its strong 2018 upturn – according to the latest OTC DASHBOARD data for the MAT Q3 2018 period, India is the fastest-growing OTC market in Asia-Pacific, up 8.8%.

At the other end of the scale, key Latin American markets Venezuela and Argentina are forecast to be among the Top 5 worst-performing economies in 2019, while Mexico and Brazil are also expected to perform below par this year. However, high inflation has helped to boost OTC growth in these markets. As for Europe, several western European markets are forecast to produce low growth, while Japan, Turkey and South Africa are all expected to produce growth in the 0-2% range, with the US performing slightly better.

Join Nicholas Hall and The CHC Training Academy in Vietnam on 28 February. Focusing on the central theme of Winning Together in Consumer Health, this unique workshop will enable you to develop essential skills to succeed in the new era of collaborative partnership approaches between retailer and supplier for strengthening categories together, plus deep insights on key stakeholders. Don’t delay — book your place before 17 January to save with our generous early bird discount! To find out more, please contact elizabeth.bernos@NicholasHall.com

Latin America: Focus on Brazil

OTCINACTION

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

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

Screen Shot 2018-12-03 at 09.29.54.png

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

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

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

MAT Q1 2018: Global OTC growth steady at 4.1%

DB6-5a731024e8b11

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.

 

Striving for Success in Latin America

OTCINACTION

Though it still only accounts for a small share (just under 6%) of the global OTC market, Latin America remains by far the most dynamic region, with growth of 12% in the MAT Q2 2017 period. As the second-largest market in the region after Brazil, Mexico has seen its OTC growth accelerate in recent quarters thanks to rising consumer confidence throughout 2017, and its vibrant capital – Mexico City – was the venue for our 3rd Latin American Conference held last week.

Focusing on the theme, “Striving for Success in Latin America”, the conference was opened by Nicholas Hall and his annual keynote speech, highlighting key trends across the region – such as an increasing consumer preference for prevention, the widespread use of social media and a lack of regulatory improvement – and the impact these will have on the future of the industry.

Screen Shot 2017-11-13 at 11.41.04

Summarising his speech in 9 key points, Nicholas Hall said: “We must manage our brands in a more effective way if we are to sustain the current rate of growth, bearing in mind that Latina will probably be a late adopter of many features of the New Paradigm, including digital marketing for CHC products:

  1. With the flood of new products each year, it is essential that our brands stand out in a sea of mediocrity, by clear positioning that demonstrates both new functional benefits and emotional benefits
  2. Most successful brands in Latina and globally are old brands — the CHC market is unique in rejecting new brands in favour of those that are tried and tested; we should search for hidden gems that can be dusted off and given a new lease of life
  3. There is a constant reference from all quarters to the need for more innovation and I agree!! The best strategy is to bolt on a new ingredient, with an improved positioning, to a famous and trusted brand name
  4. There are many opportunities in LatAm: we have conducted Gap Analyses in many countries, including Brazil and Mexico. We found lots of open gaps with unmet or only partially met demand, many in adjacent categories, as most launches are in the mainstream categories rather than emerging niches — please contact my colleague Ekaterina Panteleeva (ekaterina.panteleeva@NicholasHall.com) for more information on the way we conduct Gap Analysis
  5. TV is still the main medium, but not without problems of loss of viewers, so we should test-market more for optimum spend
  6. The retail sector is consolidating fast, yet we don’t engage with the big chains through modern Key Account Management programmes, and the concept of Category Captaincy is hardly known; not least we must work with the big chains to manage the inevitable growth of private label
  7. There has been much talk of liberalisation, but the regulations are still quite drastic and are preventing more Rx-to-OTC switches, especially in Brazil
  8. Overall, the region is growing well at 10% (constant currency) in the past 5 years and is forecast to grow by 8% in the next 5 years
  9. So let’s work hard to maintain double-digit growth. To misquote President Trump, “Let’s make CHC great again!”

Monica Feldman also provided an insightful regional overview, reminding us of the major differences between certain markets (such as mass market vs pharmacy sales) and the growing prevalence of digital health. Hector Bolanos and Juan Knobloch both emphasised the importance of lobbying government for an improved regulatory framework in Mexico, while Henry Adler discussed diversification strategies as a means of avoiding regulatory delays in Brazil.

Rodrigo Arcila drew attention to Colombia’s dynamic Rx-to-OTC switch environment and rapidly-advancing national health system, while the day’s final speaker, Anne Engerant, focused on how OTC companies can help combat wider public health issues, such as antibiotic resistance, and promote responsible self-medication. Day 1 closed with a panel discussion moderated by Monica Feldman: Roy Bateman and Maria Barros y Muradas debated the mid-term future of the industry, including digitalisation and the evolution of POS, before the floor was opened to questions.

This week, Nicholas is back in India for the 2017 Annual Conference in association with CubeX. As consumers exist in a volatile, uncertain, complex and ambiguous marketplace, we can say that today’s self-care landscape is a VUCA world, which is why this year’s theme is Consumer Healthcare in VUCA World. With seats still available, you can secure your place now by emailing conference@cubex.co.in

Bion 3 Senior launched in Chile

OTCinActionheader

Last month, Merck KGaA rolled out Bion 3 Senior in Chile. The product – which contains vitamins B, C + D plus minerals, probiotics and ginseng – is a blend specifically tailored to the needs of people aged over 50 years.

The product has previously been advertised on TV using the slogan, “¡Activa tu vitalidad!” (Activate your vitality!), and has also featured in advertorials explaining how the body’s immune function tends to weaken with age.

The latest ad, which came out earlier this month, features a man restoring a motorbike for his mother, who had to give up doing so herself once her son was born. The ad then says “Los soñadores nunca envejecen. Encuentra tu fuerza interior en bion3.cl/senior”, which translates to, “Dreamers never age. Find your inner strength at bion3.cl/senior”. Followed by “Siempre hay tiempo para tus sueños“, meaning “There’s always time for your dreams”.

Nicholas Hall’s report on Healthy Ageing: The Expanding OTC Market for 50+ Consumers explores the existing market for Healthy Ageing OTCs, as well as identifying opportunities for future growth. Taking a detailed look at OTC offerings for 50+ consumers in 12 key markets across the globe, reviewing key brands, sales and strategies, this exclusive report could be groundbreaking for your OTC marketing scheme. For more details, contact ian.crook@NicholasHall.com or CLICK HERE!