STARK WARNING FROM WORLD OBESITY FEDERATION

Some 51% of the global population – or more than 4bn people – will be overweight or living with obesity within 12 years if current trends prevail. This is according to the World Obesity Atlas 2023, published by the World Obesity Federation, which also predicts that the global economic impact of excess weight and obesity will reach US$4.32tn annually by 2035 if prevention and treatment measures do not improve. At almost 3% of global GDP, this is comparable with the impact of Covid-19 in 2020. Other key findings include:

• Childhood obesity could more than double by 2035 (from 2020 levels). Rates are predicted to double among boys to 208mn (100% increase) and more than double among girls to 175mn (125%) and are rising more rapidly among children than adults

• Lower income countries are facing rapid increases in obesity prevalence. Of the 10 countries with the greatest expected increases in obesity globally (for adults & children), nine of those are from low or lower-middle income countries. All are from Asia or Africa

The World Obesity Federation calls for comprehensive national action plans to help countries act on new World Health Organization Recommendations for the Prevention & Management of Obesity. The Atlas report will be presented at a high-level policy event on 6th March 2023 to UN policymakers, member states and civil society.

^{Source: Semafor}

Nicholas Hall Writes: This week’s column is all about opportunities. And as I put my mind more and more to the New Paradigms 2023 report, scheduled for publication in July, I envisage a feature called “10 Steps to Heaven”, which will show the greatest sources of growth either by category or marketing strategy. A good example of this will be trying to understand how weight loss products can meet the needs of consumers.

Last week we wrote about the mounting problem of obesity, and my colleague Victoria Blake observed that there are 2bn overweight people on the face of this planet. The latest report warns that in 12 years that number could double, with 51% of the world’s population in the overweight or obese categories, with a huge incidence among children. With an absence of really effective pharmaceutical products – and as mediaeval torture instruments like the gastric band provide the only truly effective outcomes – this is surely a need that requires the combined creativity of our industry. Almost all weight loss products have failed, but there are some chinks of light. Weight Watchers seems to have achieved success over many years by putting more emphasis on the lifestyle aspects of losing weight, rather than a miracle ingredient.

Put more crudely, consumers respond better to being “nagged” than tantalised by a wonder product. Of course, there has to be a product or else there is no reason for any manufacturer to invest in nagging. And nagging was behind the past success of the Tony Ferguson Weight Loss System in Australia, which worked for consumers, delivered an amazing source of new profitability to those pharmacists who fully participated in the nagging process, and built a very successful business for Tony Ferguson himself, who was not a marketing guru but a pharmacist with two retail outlets.

The next issue of our sister publication CHC.NewDirections on 7th March leads with a focus on Nestlé Health Science’s collaborative efforts in identifying and testing weight loss solutions. NHSc and biotech start-up EraCal Therapeutics have entered into a research collaboration aiming to identify novel nutraceuticals relevant to control food intake, while Biomedical company Epitomee and NHSc have finalised patient enrolment for a study involving Epitomee’s weight loss capsule.

Senior health a priority for Megalabs

Megalabs has secured a US$70mn, 10-year loan from IDB Invest for expansion in eight regional markets including Argentina, Chile, Colombia, Ecuador and Peru. The company, which will particularly prioritise expanding production of essential medicines for the elderly, plans to launch 140 products by 2026. 

Comment from CHC Insight Latin America Editor, Jen Jones: As elsewhere, LatAm’s population is ageing rapidly and Megalabs highlighted UN figures showing that 145mn Latin Americans will fall into the 65+ years age bracket by 2030, equivalent to almost a fifth of the population. Among other regional marketers responding to this trend is Brazil’s Hypera Pharma, which indicated in 2022 that the senior demographic was key to its long-term, sustainable growth strategy.

According to the UN, the number of people aged 65+ for every 100 people aged 18-64 (known as the old-age dependency ratio) is set to grow from 13 in 2015 in Latin America & the Caribbean and Asia, to 20 in 2030. All other regions, with the exception of Africa, are showing a similar trend.

^{Source: United Nations, World Population Prospects}

Nicholas Hall Writes: Our lead story this week is part of a rush of stories that proves our industry is at last beginning to take demographic marketing seriously. After years of speculation about its consumer and commercial benefits, we seem to mean what we say: that the consumer is at the centre of our industry and identifying the needs of small and not-so-small cohorts is very important. The number of babies being born each year is declining, which has massive implications in terms of population balance. It also presents a huge opportunity as consumers, we are told, are prepared to spend a significant amount on the Little Emperors and Empresses. Except it’s an urban myth, and we just don’t see dynamic growth in the paediatric sector.

The same is true of products for the elderly, which everyone knows is the fastest-growing population group, and by no means the poorest people, but often the ones with the highest disposable income. And yet we see so few brands that meet the needs not of geriatrics but of the active elderly. Here is not the place to restate in detail that there is not one cohort of older consumers, but at least three main groups: Working Seniors, The Active Retired and The Inactive Retired (and often terminally ill). I’ve written previously about the medical needs and high consumption of healthcare products among these groups, and about the mixed messages of extending the number of years lived but not the quality of life. This will be an important component of our New Paradigms 2023 report, which is subtitled “The Future Resumed”, and which will contribute to our Strategic Narrative for 2023. We will be discussing this in more detail at the London Conference in April, but it’s no secret that – having accurately predicted the likely growth rate in 2022, which was amazingly upbeat – our future forecasts will be more moderate.

Nicholas will explore key trends impacting the CHC landscape in the upcoming new edition of his signature New Paradigms report. Providing an essential strategic review of the industry, for more information when it becomes available, please contact melissa.lee@NicholasHall.com.

Food Intolerance as Infinity Zone for Future CHC Growth

The parents of a 15-year old who died in 2016 from anaphylaxis have set up a groundbreaking £2.2mn (US$2.7mn) oral immunotherapy trial focusing on children and young people with milk and peanut allergies. The 3-year oral immunotherapy (OIT) trial is the first major study funded by The Natasha Allergy Research Foundation, a charity set up by Natasha’s parents. The aim is to prove that everyday foods containing peanut or milk, which when taken carefully according to a standardised protocol under medical supervision, can be used as an alternative to expensive pharmaceuticals to desensitise patients. “This project presents a unique opportunity to establish immunotherapy as a practical treatment that will allow people with food allergies to live a normal life,” said Professor Hasan Arshad from the University of Southampton, which is leading the trial in collaboration with partner universities and clinical allergy centres.

Nicholas Hall’s Touchpoints: Anyone who has attended one of my recent Global Trends presentations will know that I am passionate about “The Future Resumed”, picking up the Infinity Zones from the CHC New Paradigms report I co-wrote in 2019. These are as attractive today as they were then, with just a two-year delay in progress caused by Covid-19. One of the most exciting prospects is what we now call Health through Digestion, a broader category than just gut health, and stimulated by fairly new research proving that probiotics can assist the vital work of the gut-brain axis and deliver benefits to other parts of the human body. Conversely, food allergy and intolerance can have a negative influence on other parts of the body, which is why it is surprising that the CHC market for these conditions is so poorly developed.

^{Source: Nicholas Hall’s New Paradigms For CHC 2019}

When I reach this part in The Future Resumed presentation, I refer to a number of high-profile deaths of mainly young people, such as Natasha Ednan-Laperouse, who inadvertently ate unlabelled foods with what for them were toxic substances. These are extreme examples, of course, and most of us will experience very mild side-effects, but let’s not forget that almost every person on this planet has at least one form of food allergy or intolerance.

Preventing or treating this widespread condition divides into three parts:

1. Diagnosis, which will tell us the foods and drinks to which we are allergic or intolerant. At the moment this is a clinical procedure, but there is no reason why consumer health products can’t take over and build a very successful early-stage franchise
2. Prevention. The second part is to avoid eating the particular foods to which we are intolerant, or if that is impossible to take some form of preventive agent, such as Lactaid (J&J) or Beano (Prestige)
3. Treatment. If prevention is not possible – and often it isn’t as we just don’t know what is included in restaurant and fast foods – there will be very high demand for treatment products. Indeed, along with products for sleep and mood, this is the greatest area of unmet consumer demand in CHC

I strongly believe that most of this market will roll out in the consumer sector, but our industry seems shy of investing in the necessary R&D and clinical work and unwilling to build successful brands in what could be a US$10bn market in 10 years’ time.

Our newly-published 2022 edition of CHC Yearbook offers a comprehensive overview of leading markets and companies, global retailing and category and brand reviews. To order your copy, or for more information, please contact melissa.lee@NicholasHall.com.

CHC trends in 2020

In Nicholas Hall’s recent signature New Paradigms report, there were 15 Infinity Zones identified as offering substantial growth opportunities for the consumer healthcare market over the next decade, against a backdrop of uncertainty in the industry caused by the recent wave of mega-mergers. These include the development of new CHC products for diabetes and food intolerance, as well as a further uptick in activity for probiotics, MedTech and e-Commerce. In this week’s blog, we look at three trends that may boost the consumer healthcare market in 2020.

CBD and beyond

2019 was the year of CBD, as evidenced by our CHC New Products Tracker service, which logged over 300 new CBD products in the US market alone last year. A recent article in US pharmacy trade publication, Drug Store News, suggests that CBD is just the tip of the cannabinoid iceberg, with various other cannabinoids set to take off over the coming year. These include cannabigerol (CBG), which is said to produce a stimulant effect, cannabinol (CBN), claimed to show benefits as a sleep aid, and cannabichromene (CBC), claimed to be an effective pain reliever.

Veganism on the rise

A UK-based campaign that has received a lot of celebrity endorsements, Veganuary, is encouraging people to try veganism in the month of January. One of the benefits of the rise in veganism for VMS marketers is increased awareness of the nutrients we require, many of which can be lacking in a vegan diet. For instance, several leading proponents of veganism like The Vegan Society recommend taking vitamin B12 supplements while adopting a vegan diet. Our CHC New Products Tracker service has also recorded a strong rise in vegan-friendly supplements in the past two years, a trend that looks set to accelerate in 2020.

Uptick in switch activity?

One of the trends responsible for the slowdown in global CHC market growth these past 3-4 years is the drop-off in Rx-to-OTC switch activity, especially in the world’s No.1 market, USA. There are signs this is about to change – for example, Viagra is due to lose its final patents in the USA in 2020. In Japan, the world’s No.3 CHC market, there has been a similar falling off in switch activity, with just two ingredients approved for reclassification in 2018 and 2019. However, 2019 saw the first ingredient to be switched under a new system set up by Japan’s drugs agency, MHLW, which has nominated over 30 ingredients as eligible for switch. With the Tokyo Olympics also on the horizon in summer 2020, this year could see a revival in Japan’s sluggish CHC market.

With options available for complete access to all 20 markets covered by CHC New Products Tracker, or a subscription for selected categories or countries, contact waisan.lee-gabell@NicholasHall.com today to find out more or set up a free trial!

Focus on China: Trade agreement with USA imminent?

Some welcome news for the global economy which broke over the weekend, as announced by the US trade representative, is that the US and China are “close to finalising some sections” of an interim agreement to ease trade tensions between the two countries. This is also a welcome development for OTC marketers, including RB, whose newly-appointed CEO Laxman Narasimhan recently stated that the company’s disappointing Q3 performance was primarily due to issues in USA and China.

Growth in China’s OTC market slowed to 5.3% in the MAT Q2 2019 period, owing to a low key cough & cold season and a weakening economy. Nicholas Hall was a speaker at the Global Self-Care Federation (GCSF) conference – a joint meeting of the Chinese, Asian and global CHC associations, held in Beijing last week – and wrote: “It is always valuable to come to the second-largest CHC market, which in just a few years will be the world’s biggest economy. There are major opportunities here, but increasing challenges too as the Government takes a tougher line on pricing and distribution, without easing the regulatory barriers.”

Judy Stenmark kicked off proceedings at the GSCF 2019 conference

Nicholas Hall also wrote that: “Among the many presentations during the 2 days, some of which lasted for as little as 15 minutes – this was truly a conveyor belt conference, with only one panel discussion and no questions from the floor – a presentation that stood out for me was from Conba, a company about which I knew very little. Hu Jiqiang, Chairman of Conba Group, made the startling claim that Conba will become the biggest producer of medical cannabis in China and possibly the world … And, of course, the presentation by Alibaba Health was one to sit up and listen to at the end of an exhausting two days. This really is a game-changing company as I discuss in my New Paradigms report.“

The rise of Chinese marketers within the global OTC rankings has been a notable trend in 2019. Our latest MAT Q2 2019 data shows that China Resources 999 now takes 9th position globally, and grew by 7.3% in the year to end-June 2019. Additionally, as explored in one of our recent blog posts, By-Health has broken into the global Top 20 and now claims 15th spot. This company has bucked the trend of decelerating growth in China, with sales growing by 31% in MAT Q2 2019. China accounts for over 90% of By-Health’s OTC portfolio turnover, with Australia accounting for the remainder.

Some of the latest innovations and technologies impacting CHC will be at the forefront of the agenda at next month’s OTC.NewDirections Executive Conference, which will take place in London on 14 November, with speakers from key players including Mundipharma, J&J and Bayer. Please contact jennifer.odonnell@NicholasHall.com to book your place or find out more. If you are unable to join us, you can always view Nicholas’ opening address live at 09:05 GMT here

PPoC initiatives key to future CHC growth

For the final instalment in our series of blogs on Nicholas Hall’s Infinity Zones for future CHC growth, we turn to the topic of Pharmacy Point-of-Care (PPoC). As our recent blog on e-commerce indicated, internet & mail order sales of OTCs are growing fast but store-based sales still account for 78% of the global OTC market. In an increasing number of markets, PPoC initiatives are providing new, speedy and effective alternatives for consumers unable or unwilling to wait for a GP appointment. Below is a summary of some PPoC initiatives in recent years from all four corners of the globe.

In February 2019, PTS Diagnostics and Kroger Health, which operates 2,100+ pharmacies and clinics in the USA, announced the full rollout of CardioChek Plus analysers for point-of-care blood testing to help identify individuals at risk of heart attack, stroke and diabetes. The CardioChek Plus system accurately tests lipid profile and glucose simultaneously with one fingerstick, enabling a more seamless process for the customer. It measures total and HDL cholesterol, triglycerides and glucose, providing on-site results in as little as 90 seconds.

In Vietnam, Chris Blank and his team at Pharmacity have the ambition to reach 1,000 stores in just 1,000 days. But, as Nicholas Hall said, it’s more than just store openings that is propelling Pharmacity to national dominance – it has carefully figured out the offline and online needs of its customers and is working hard to build traffic in each store, so the proposition is for vertical as well as horizontal growth. Ultimately, Pharmacity will succeed by delivering holistic PPoC solutions to the unmet health needs of its customers.

Turning to Europe, LloydsPharmacy (Celesio / McKesson) started offering sore throat tests for people aged 18+ years in 600 stores across England, Scotland and Wales in November 2018. Pharmacists ask questions and examine the throat to determine the possible cause of pain. If necessary, they will take a swab test to check for infection. If the results are negative for Streptococcus A, the pharmacist is able to offer advice, as well as a range of OTC treatments.

As for Latin America, Brazil’s ANVISA approved a resolution in late 2017 that allows any health establishment nationally, including pharmacies and drugstores, to administer vaccinations, providing that they meet certain requirements. This follows a number of local legislation changes permitting pharmacies to offer a greater number of services – among them, the application of vaccines, health monitoring with point-of-care testing and self-test equipment – in the states of Sao Paulo, Amazonas, Para, the Federal District and the city of Sao Paulo in November-December 2017.

Don’t miss out on your final chance to benefit from our pre-publication discount when you pre-order Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself! Analyse each aspect of the CHC industry, with a focus on crucial issues including Healthcare trends, Innovation, M&A, Switch and much more. Nicholas will also unveil all the “infinity zones” he has identified as being paramount 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. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

Food intolerance category shows huge promise

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.

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.

eCommerce expansion led by Amazon limits store-based growth

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?“

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.

Prevention better (and growing faster) than cure

For many years now, Nicholas Hall has been highlighting how OTC subcategories focused on prevention are growing faster than those directed towards treatment or intervention. This long-term trend in the CHC industry continues to take root, thanks to the growing power of categories like probiotics (another Infinity Zone, covered in last week’s blog).

At this year’s Vienna conference, Nicholas Hall presented a slide of the fastest-growing OTC subcategories by CAGR (2014-18), comparing those focused on prevention with those centred around treatment, and this showed that seven of the Top 10 most dynamic subcategories in recent years had a preventive focus. Sexual health is a relatively new driver of this trend, with two subcategories in the Top 5 – erectile dysfunction and emergency hormonal contraception.

Vitamins, minerals & supplements have long been the main driver of this prevention trend, with probiotics and vitamin D the two key subcategories. Innovation and niche product positioning (i.e. to prevent allergies, candidiasis, age-related illnesses, etc) have helped fuel probiotics growth, while the dynamism of vitamin D sales has been driven by rising awareness of the high levels of deficiency in many markets and the benefits  of supplementation.

Herbal memory & brain health is an increasingly attractive subcategory, as exemplified by RB’s recent launch of Neuriva, a new product designed to support “brain fitness” and prevent cognitive decline. Royal jelly is taken widely in Europe and Asia-Pacific as a way to prevent fatigue, while just outside the Top 10 in CAGR terms are magnesium, zinc, pregnancy vitamins and hair & beauty supplements. According to OTC New Products Tracker, the latter was the fifth most active OTC subcategory in 2018 in terms of launch activity, with 150 innovations.

Last chance to pre-order 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.

Probiotics the main CHC growth driver in Europe

As part of our series of blogs on the 10 Infinity Zones for future CHC growth outlined by Nicholas Hall, this week we take a closer look at the fast-growing probiotics category. As Nicholas mentioned in his keynote speech at this year’s Vienna conference, probiotics is a category that has moved from adjacency to mainstream, producing more value growth in Europe in the past 5 years (additional US$364mn in sales) than any other OTC category.

In 2018, global sales of probiotics totalled US$4.2bn, representing 10.8% growth. This was a slightly better performance than the previous year (sales of probiotics were up 10.4% in 2017) but still marks a deceleration compared to the recent peak in 2016 of 13.6% growth. Looking at global product innovation trends, thanks to our OTC New Products Tracker tool covering 20 key markets, there are also indications that probiotics expansion may have hit a temporary plateau, with roughly the same number of innovations in this category in 2017 (277) and 2018 (270).

However, the appearance of new probiotics niches looks set to energise further growth and innovation going forward. As highlighted in our recently published Lower GIs report, the development of probiotics with novel positioning (IBS, hangover, etc) and for specific life stages (infancy, pregnancy, etc) are expanding the category’s appeal even further. Recent examples of new probiotics for kids include Zarbee’s Naturals Baby Daily Probiotic Drops (J&J) and Biocodex’s launch of Florastor Baby.

Personalisation will also be an important future growth driver for probiotics. Despite the increasing number of proprietary bacterial strains, the probiotics category is still largely characterised by a one-size-fits-all approach. As scientific understanding of the microbiome advances, however, we may soon reach a stage where tailored probiotic strains are recommended for people with specific host microbiomes or diets. This sort of precision therapy could also eventually see a growing number of probiotics regulated as medicines rather than dietary supplements.

How is regulation of consumer healthcare products set to evolve in future? Find out in the chapter dedicated to regulation in Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself. Other chapters will look at issues surrounding the CHC market including digital engagement, M&A, healthcare trends and much more! You also have the option to 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.