GSK eyes CBD market with Cann partnership

Cann Group has entered into an exclusive evaluation & option agreement with GSK Consumer Healthcare in relation to the potential commercialisation of Satipharm CBD capsules for OTC (S3, Pharmacist-only) distribution in Australia. GSK also has potential interest in first rights to negotiate exclusivity periods to assess its interest in taking up commercialisation rights in other markets globally. Cann has granted GSK the exclusive right to evaluate Satipharm (excluding Cann’s Rx CBD products) for 60 days after the delivery of Cann’s final clinical study report.

In consideration of this, GSK will pay Cann £100,000 (US$130,437) as a non-refundable payment. Key terms of any definitive sales & marketing agreement will be contingent on factors including the results of the 4-week Phase 3 clinical trial and path to regulatory approval, as well as GSK’s marketing evaluation. Recruitment for the trial, which will examine the efficacy of Satipharm for the short-term treatment of sleep disturbances and quality of life outcomes, is in progress and the results are expected in H2 2022.

As highlighted in our recently published Innovation in CHC report, global launch activity for CBD products has dropped off substantially over the past two years since the pandemic. Regulatory uncertainty also still hovers over the status of CBD in the key US market, another factor in NPD dropping sharply there. In the near future, we expect there to be a greater emphasis on quality over quantity. Further clinical backing for CBD and other cannabinoids – in the way GSK is pursuing with this Cann partnership – will be crucial to this next phase in the maturity of the category.

Source: Nicholas Hall’s CHC New Products Tracker

Nicholas Hall Writes: “This is a very important story. As Peter Crock, the Cann CEO, says: “Cann’s ability to produce a CBD capsule that presents as a regular pharmaceutical and has proven benefits in terms of stability and bioavailability has attracted interest from a number of potential distribution partners. We are delighted to have this opportunity to work with GSK Consumer Healthcare, which would bring industry-leading expertise and market access to our CBD product platform if we enter into a definitive exclusive agreement.”

Alright, it’s not a done deal yet, but there is an expectation that it will be concluded for Australia, and possibly other markets. It is highly significant in many ways:

  1. It’s the first major move since Australia approved CBD for certain OTC indications in February 2021 
  2. With all due deference to Nestlé, it’s the first instance of a major CHC company taking a direct interest in the CBD market
  3. There is some real science involved
  4. The sleep indication will be a sure-fire winner in a category that grew 13.2% in 2021 and still has massive unmet consumer demand

And finally, is it a sign of the greater freedom that the independent Haleon will have to enter “difficult” categories, which might not be possible for an affiliate of Big Pharma? All in all, this is a bold move, and one I hope will succeed.

We are pleased to announce that the latest edition of Innovation in CHC from CHC New Products Tracker is now published! This report showcases 100 major innovations from 2021, profiles best-in-class brands and highlights key ingredient and delivery format trends. To order your copy now, or for more information, please contact melissa.lee@NicholasHall.com.

CHPA Self-Care Leadership Summit

From Nicholas Hall’s Regional VP, North America, Liz Cummings

USA: “If there was ever any doubt, the world has learned what we knew all along – that consumer healthcare is absolutely essential to public health and that good healthcare starts with good self-care,” observed Consumer Healthcare Products Association President & CEO Scott Melville during his keynote at the CHPA annual Self-Care Leadership Summit last week.

Two areas of self-care – dietary supplements and diagnostics – were especially important to consumers during the pandemic, he noted, and CHPA’s membership expansion into those categories positions the association well to support the full scope of the industry in the future. One example is the data-driven Dietary Supplement Index (USA), which identifies supplements sales by region and provides a tool for the industry to educate healthcare providers and insurers to make the case for nutrition as essential to healthcare.  

During the meeting, the CHPA awarded its Ivan D Combe Lifetime Achievement Award to longtime industry leader – and former Chair – Gary Downing. Praised by many former employees at the event for his leadership, Downing has spent his career growing CHC companies, with a resume that includes sales and management at the Richards-Vicks Company. He later co-founded MedTech Labs, which eventually sold for a 400% rate of return, joined the Lansinoh Laboratories Board of Directors and became CEO of Insight Pharmaceuticals, then Clarion Brands, which was recently sold to Bridges Consumer Healthcare.

The audience also appreciated with standing ovations the 40-year CHPA career of Phyllis Taylor, Sr Director of Membership and Sponsorship, when her retirement was announced by Melville. We at the Nicholas Hall Group of Companies send her our very best wishes for a happy next chapter with her family.

The CHPA meeting will be reviewed in detail in the forthcoming March / April issue of CHC Insight North America. To review the latest trends and developments across the region, please contact melissa.lee@NicholasHall.com to find out more, or to receive a sample copy of a recent issue.

Two Rx-to-OTC allergy switches approved by FDA

In a clear sign of a more favourable attitude to Rx-to-OTC switch, the US FDA last week approved two new allergy products for non-prescription use.

Lastacaft alcaftadine ophthalmic 0.25% solution (Allergan / AbbVie) is now available without a prescription online and in retail stores for individuals aged 2+ years with ocular allergies. As demonstrated in clinical studies, one drop works in as little as three minutes to provide relief from itchy eyes for up to 16 hours. Following the recent FDA Rx-to-OTC switch approval, the original patented prescription-strength formulation of Lastacaft is available in a 5ml multidose bottle containing a 60-day supply, as well as a twin pack with two 5ml multidose bottles.

Perrigo also received final approval last week from the FDA for the OTC use of Nasonex 24HR Allergy (mometasone furoate monohydrate 50mcg). This marks the first branded Rx-to-OTC switch for the company, which expects to begin offering the nasal spray later this year. Nasonex is a registered trademark of Organon and is used by Perrigo and its affiliates under licence.

Nicholas Hall’s Touchpoints: This development will no doubt lead to an increase in switch activity after House and Senate committee members cited concerns that “very few products in recent years have switched from prescription drugs to nonprescription drugs” and pointed out that the FDA is expected to “meet the goals of the Fall 2021 Unified Agenda and publish and subsequently finalise the proposed rule titled Nonprescription Drug Product with an Additional Condition for Nonprescription Use.”

The appropriations committees are also: “Concerned about dietary supplement products that are adulterated or misbranded, in particular with imported products. The agreement provides an increase of US$2mn in the FDA’s budget [US$6.1bn in total] to be used for inspections, as well as enforcement of the Dietary Supplement Health & Education Act of 1994”. My sense is that in the biggest market for both switch and dietary supplements, we could see a correction in the prevailing trend from treatment to prevention.

Take a look at the latest CHC innovations in our forthcoming 2022 edition of Innovation in CHC from CHC New Products Tracker. This report offers a look at Rx-to-OTC switch activity, as well as innovation by region, marketer and 20 individual countries. To pre-order your copy and save up to £1,350 with the pre-publication discount, or for further information on this report, please contact melissa.lee@NicholasHall.com.

NielsenIQ’s “Global Consumer Outlook”: Agility crucial in 2022

The pandemic may be entering its third year, but there are signs that governments are gearing up to living with Covid-19. NielsenIQ’s 2022 Global Consumer Outlook delves into consumer sentiment and spending, revealing how people will shop in the year ahead. With employment disruptions, supply chain breakdowns and varying recovery scenarios, the trends setting the tone for consumer behaviour in 2022 include:

  • Consumers will move towards an endemic mindset 
  • Virus variants will fuel different recovery trajectories
  • Inflation concerns will take a toll on consumers; prepare for continued global consumer spending constraints
  • New-found consumer priorities born out of the pandemic will not be compromised. Consumer prioritisation of health, wellbeing & financial security will take centre stage 
Source: NielsenIQ
  • Consumer spending intentions reflect a continued homebody lifestyle with cautious approaches intensified by inflationary pressures. Leisure & entertainment will continue to take a backseat against an ongoing Covid backdrop
  • Necessity will be a driving force. Consumers will bring added scrutiny on expenses that fall beyond priorities & necessities

For the full Outlook, click here.

Nicholas Hall’s Touchpoints: The NielsenIQ 2022 edition of “Global Consumer Outlook” is timely as we start to think again about a possible end of the pandemic. The NielsenIQ team concludes: “In the year ahead, agility will be critical. Retailers and brands that consider different trajectories and recovery scenarios will be better placed to address consumers’ changing priorities, states of cautiousness and increasingly constrained wallets. They must ensure their offerings can morph and resonate with how the landscape will continue to evolve in the years to come.”

One of the trends that we have observed in the USA, but not in other regions to the same extent, is a prioritisation of healthcare spend by consumers on products with tangible benefits. So for the first time in some years, we’ve seen more of the growth categories focusing on treatment than prevention. Is this a blip or the start of a longer-term trend? It’s too soon to tell!

An added complication is the weakness of the global economy and the predicted rise of inflation, which are putting more pressure on consumers, who in general will have to prioritise their shopping even more than in the past. So which consumer health products will they purchase in what may be a slimmed-down overall shopping basket? And a further knock-on effect may be a reduced interest in supporting sustainable products. The survey reported in our third lead story (below) is encouraging, but the practicality might be that consumers with less disposable income then before may not be able to prioritise these products, even though this remains their ideal.

These and many other issues are in the front of our minds at the moment as we begin to scope the 4th edition of our New Paradigms report (subtitled “A Return to the New Normal”) later in 2022.

Immunity: DSM and Sprim reports highlight evolving consumer needs

According to The Immunity Report, recently published by DSM, some 40% of consumers now buy supplements online. This offers convenience, choice and the chance for shoppers to conduct their own research. The digital space also provides more opportunities for tailored products and services vs the broad support offered in-store. Some 76% of global consumers who find nutrition-genetic testing appealing would do it to improve immunity.

In the digital space, supplements can also be more easily tailored to consumers’ lives and habits via online subscription services, which would interest 62% of nutritional supplement users. These can be based on factors such as demographic, lifestyle or season. As well as tailored convenience for the consumer through immunity products suited to them, subscription services can help brands to keep connected with consumers beyond delivery and learn more about their needs over time. One of the interesting findings in the report was how “pill fatigue” among consumers has led to a surge in demand for other delivery formats like gummies, drink shots and stick packs.

Separately, a recent survey conducted by Sprim involving 1,000+ participants across USA, Mexico and Brazil found that, with the pandemic driving interest in immunity, there has been a profound rise in demand for supplements. However, in a saturated market, consumers are becoming more discerning with their purchasing power.

The Sprim report presented five key takeaways, providing a foundation for companies in the immune support category seeking to serve the needs of this evolving consumer:

  • 61% began or increased their purchasing of dietary supplements for immune support in the wake of Covid-19
  • Scientific / clinical trial evidence was the most important consideration when choosing an immune support supplement
  • Vitamins C & D are the most popular ingredients for immune health
  • While most consumers in Mexico & Brazil purchase their supplements from drugstores, those in USA primarily buy theirs from online mass market stores
  • Feeling “tired & rundown” is the #1 buying trigger for immune supplements across all regions

Now is your last chance to save up to 50% off several Reports titles as part of our special end-of-year Reports saleending on 31 December! To find out more, or to create your custom discounted reports package, please contact melissa.lee@NicholasHall.com.

Q3 Results Round-up: C&D and Prestige

In this week’s blog, we look at the latest quarterly results of two Top 20 global CHC marketers, starting with Church & Dwight, which reported net sales of US$1.3bn in Q3 2021, up 3.7%. Online sales grew by 2.2% (on top of 102% growth in Q3 2020), accounting for 14.2% of total sales.

  • Consumer Domestic net sales were US$998.1mn, up 4.6% driven by household and personal care sales growth and acquisitions. Organic sales increased by 2.8%, owing to higher price and product mix (+6%), partially offset by lower volume (-3.2%). Vitafusion gummy vitamins were among the growth drivers
  • Consumer International net sales were US$227.0mn, a 6.3% increase, mainly driven by European organic sales performance (+8.8%), Global Markets Group organic growth (+6.9%) and currency gains. Despite continued lockdowns, organic sales increased by 2.3%, primarily owing to higher volume. Growth was driven by Waterpik oral care products and Sterimar nasal spray in Europe and Sterimar, Femfresh intimate wash, Vitafusion and L’il Critters gummy vitamins in the Global Markets Group

Comment: Reflecting ongoing trends, CEO Matthew Farrell noted during an earnings call that “Vitafusion gummy vitamins saw huge consumption growth in Q3, up 24%. Consumers have made health & wellness a priority. It appears that the new consumers that came into the category are staying, because if we look at the last year, Vitafusion household penetration is up almost 10%.”

Vitafusion remains a huge growth driver for C&D

As for Prestige Consumer Healthcare, revenues grew by 16.3% (+10.5% on an organic basis) in fiscal Q2 2022 (Jul-Sep 2021) to a record US$276.2mn.

  • North America OTC Healthcare sales were US$251.7mn vs US$216.6mn in the comparable quarter. This was driven by a strong performance across a majority of key brands vs their respective categories and increased demand in certain Covid-impacted categories such as motion sickness and travel-related channels
  • International OTC Healthcare sales totalled US$24.5mn vs US$20.8mn. The increase related primarily to a rise in consumer activity in Australia, which drove a sharp spike in demand for Hydralyte and other Covid-impacted brands, along with a foreign currency benefit of US$0.5mn

Comment from CEO, Ron Lombardi: Our record Q2 built on the strong results delivered in Q1 as our leading brands and business strategies enabled us to benefit from a higher-than-anticipated rebound in Covid-impacted areas, as well as strong consumer demand. The strong performance is broad-based with market share gains, revenue and earnings growth and is a testament to our focused execution in the current environment. Furthermore, TheraTears [acquired from Akorn on 1st July 2021] added incrementally to our strong results and we were pleased with the quick and seamless integration that is now complete.

Save the Date! We are delighted to announce that we will be heading to Athens on 4-6 May 2022 for our 32nd European CHC Conference & Action Workshop! Contact elizabeth.bernos@NicholasHall.com to reserve your space today!

Nielsen IQ: OTC pack size trends 2019-21

In this week’s blog, we share some insights and research from one of our partners, Nielsen IQ, on how purchasing patterns for OTC medicines have evolved in the US market over the past 2-3 years.

In 2019, prior to the Covid pandemic, all size ranges of OTC medications were growing 2-5%, with the larger packs slightly outpacing the smaller pack sizes. As the outbreak began, wellness concerns and “stocking up” behaviours increased, leading to accelerated growth rates of the largest sizes. In the back half of 2020, many shoppers were able use their stockpiled OTC medication purchases from earlier in the year.

Additionally, cold and flu incidence was low owing to less social interaction and the wearing of masks. As the vaccine has become widely available in 2021, normal activities are resuming but all OTC medication sales are down compared to the unsustainable growth of a year ago.

Source: Nielsen IQ. *Pain Relief, Upper Respiratory, Gastrointestinal, Sleeping and Alertness Aids.

The importance of extra large and super size pack sizes has increased consistently since the start of the pandemic. This growth traces across all the top OTC categories and to all forms of pain relief and sleep. The GI extra / super size gains are from liquids, while tablets are driving the CCA / upper respiratory growth.

The upsizing is also seen in shopping patterns. While there were 5 million less OTC medication shopping trips in 2020 compared to 2019, the number of trips in which shoppers purchased an extra or super large pack increased by 10.4 million (+3%), while smaller size trips were down to 15.4 million (-3%).

NielsenIQ Client Director Anna Mayo discussed Healthier Growth for OTC during our recent North American e-Conference 2021. If you were unable to join, contact us to purchase a recording of the session. Next on the agenda is our APAC e-Conference 2021 on 23 November. To find out more about either meeting, please contact elizabeth.bernos@NicholasHall.com.

Spotlight on WBA, plus US and UK retail

In its latest results, Walgreens Boots Alliance announced that fiscal 2021 sales from continuing operations rose by 7.5% on a constant currency basis to US$132.5bn, exceeding expectations. In Q4 fiscal 2021 (June-August 2021), sales increased by 11.8% to US$34.3bn.

  • United States had Q4 sales of US$28.8bn, up by 6.6%. Retail sales grew by 6.5%. Comparable sales were up 8.1%, reflecting an 8.9% rise in comparable pharmacy sales and 6.2% growth in comparable retail sales. Excluding tobacco & e-cigarettes, sales increased by 7.2%, reflecting broad-based growth across all categories. In particular, health & wellness sales were 14% ahead, aided by cough / cold & flu, at-home Covid tests and vitamins.
  • International sales rose by 61.8% to US$5.5bn, including a favourable currency impact of 9.2%. Sales were up 52.6% (CC), including higher sales associated with the formation of the company’s wholesale j-v in Germany. Excluding this, sales rose by 9.3% (CC), reflecting the ongoing recovery in the UK market, where Covid restrictions were lifted in July 2021. Boots UK comparable retail sales were up by 15.0%, with footfall on the high street recovering although still below pre-Covid levels. Boots.com continued to perform ahead of expectations, with digital sales in Q4 more than doubling vs pre-Covid levels.

Both the US and UK CHC markets struggled for growth in the MAT Q2 2021 period – as per the chart below – but there were signs in the WBA results of a strong recovery in retail pharmacy sales in both markets in July and August 2021.

WBA has also announced its new consumer-centric healthcare strategy to drive sustainable, long-term growth. The plan features the launch of Walgreens Health, a technology-enabled care model powered by a nationally-scaled, locally-delivered healthcare platform. Walgreens Health will bring equitable, personalised, healthcare to communities across USA in-store, at home, in the doctor’s office and via a mobile app. WBA’s aim also includes reimagining retail through expanded health & wellness offerings and mass personalisation; accelerating WBA brands and digital offerings; and expanding the Transformational Cost Management programme.

In addition, WBA has increased its ownership stake in VillageMD from 30% to 63% to advance its strategic position in the delivery of value-based primary care, a fast-growing segment of the healthcare system. The US$5.2bn investment will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in 30+ US markets by 2025 and 1,000 by 2027, with more than half of those practices in medically underserved communities. 

Now is your final chance to enter our Nicholas Hall’s CHC Marketing Awardstaking place during our APAC e-Conference 2021 on 23 November! If you wish to put your brands in the spotlight, enter your campaign before 22 October. To find out more about this online meeting or awards criteria, please contact elizabeth.bernos@NicholasHall.com.

MAT Q2 2021: Global CHC Market Trends

The latest update from Nicholas Hall’s CHC database DB6 indicates that in MAT Q2 2021, the retail (bricks & mortar) CHC market returned to growth following a decline in the previous reporting period – the first seen since DB6 records began. Overall global CHC sales were up 1.7% to US$151bn.

In terms of performance by geography, the Americas returned to positive growth (+1.3%), with a flat performance in North America bolstered by LatAm markets, including double-digit growth in Brazil (+10.6%). USA remains the clear No.1 CHC market globally, and grew modestly (+0.2%).

Asia-Pacific was the best performing region (+4.8%); while it continues to be impacted by loss of revenue from overseas visitors in key markets Japan (-4.0%) and Australia (-5.5%), high single-digit increases in China and India helped to lift the topline.

Source: Nicholas Hall’s global CHC sales database DB6 (all values at MSP).

Europe continues to decline (-2.0%), still heavily impacted by retraction in CCA and analgesics in Western Europe in particular. Key markets Germany (-8.5%) and UK (-10.8%) fell significantly, although this was partly offset by a positive trend in C&E Europe (+3.6%), with Russia maintaining mid-single digit increase (+4.1%) and Poland returning to growth after a decline in the previous reporting period.

Nicholas Hall Writes: “In 2020 we saw the market grow across the board during the first half, ease back in the second half, perform very badly in Q1 this year and return to growth in Q2. Is this a trend? Is it as simple as drawing the line forward to the point where we regain the pre-pandemic 3.7% retail sector growth rate? We all have our own point of view, but it would be a brave soul prepared to make a firm prediction. So in the best tradition of being a thrusting brand manager, I’m going to hedge my bets until I see the Q3 figures from DB6.

We are pleased to announce that Nicholas Hall’s DB6 mid-year update for 2021 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.

North America Conference Report

Nicholas Hall’s North America e-Conference was held last week, with various speakers giving inspiring presentations on the latest trends in the CHC market, innovations, rising brands, keys to brand success, modern marketing strategies and future growth categories.

Nicholas Hall began the webinar by unpacking current key trends in the industry, such as high interest in probiotic & prebiotic products and CBD, despite markets for both flatlining. He examined how many jumped on the immunity bandwagon in response to the pandemic, with brands such as elderberry-based Sambucol experiencing great success in 2020, but also how this category has seen a slowdown in the first few months of 2021. Nicholas concluded with a look ahead at Infinity Zones (future growth categories), which include probiotics, food allergy & intolerance, cannabis, sexual health and obesity (among others).

The following talks focused on the non-prescription imperative, and how the current challenge of access to health treatment in the USA may best be addressed. Mary Alice Lawless discussed the new and exciting capabilities of Biograph by Amwell, which uses fully customisable, layered frameworks for proper implementation of labelling strategies and allows for communication and education to be personalised to an individual profile. Jim Parker and Joseph McGovern discussed the issue of undertreatment in the USA and the steps that can be taken to increase and improve access to treatments on a non-prescription basis, including CHC product development and advances in technology to help consumers self-diagnose conditions and ensure proper self-selection. Clark Richardson finished this section of the webinar, concluding that the next crops of OTC switch candidates will require different tools to help consumers safely select and use medications, and that comprehension studies, self-selection studies and actual use studies must be undertaken.

The Non-Prescription Imperative: Switch to return as key driver of US OTC growth

Next up, Douglas Stukenborg gave insight into the keys to success he discovered when helping to create the Welly plaster brand. His tips included the need to start with the problem in a category rather than the answer, to limit/leverage distribution to manage risk and to launch fast & fix fast. Second in the segment on Challenger Brands, Daniel Hassan described how brands IB Gard, REMfresh and Fiber Choice became successful while 85% of new CPG brands fail. His advice included building enduring brands in the drug free space, creating patented prescription-quality innovations, winning support in the medical community, and providing science to allow educated consumers to believe in products and to allow doctors to recommend products.

Anna Mayo and Corinne Shindelar then discussed online sales trends, movement towards subscription services for vitamin products, the increasing popularity of click and collect and DTC brands, the trend towards clean and natural and plant-based products among younger consumers, the growth of the natural/organic industry, the increase in herbal supplement sales in the USA and the growth of consumer interest in GMO-free, cruelty free and vegan products. Finally, Michelle Bottomley described the “Modern Marketer’s Tool Kit”, with focus shifting from product-centric to consumer-centric, and from product sales to consumer portfolio growth. She also discussed how modern marketing can flex across a continuum of art & science to utilise multiple channels and integrate all communications to give 360-degree surround of the target consumer with a seamless, personalised experience at every point of contact. Steve Sowerby rounded off the conference with a helpful summary of each speaker’s contributions and some interesting closing thoughts for the industry moving ahead.

If you were unable to join, contact us to purchase a recording of the North America session. Next on the agenda is our APAC e-Conference 2021 on 23 November and the Latin America e-Conference 2021 on 14 December. To find out more about these conferences, entry submission criteria for any of the awards, or to book your place, please contact elizabeth.bernos@NicholasHall.com.