Market Movers in MAT Q2 2020

To mark the publication of our latest Market Movers update, which picks out 6 brands driving growth in the global CHC market in the MAT Q2 2020 period, as well as 6 brands in fast decline, our blog this week examines the trends that are driving these exceptional changes.

Among the fastest-growing brands, one common thread is immunity positioning, with at least four of the six products highlighted below – Dabur Chyawanprash (India), Yiling Lianhua Qingwen (China), Airborne (USA) and Arbidol (Russia) – boosted by heightened demand for products that boost immunity during the pandemic.

TCM Yiling Lianhua Qingwen, available in China as capsules and granules, was listed in 2020 in the country’s Novel Coronavirus Pneumonia Diagnosis and Treatment Scheme, while in April 2020, the National Medical Products Administration of China approved a new indication for “mild and common Covid-19” to be added on the basis of its originally approved indications. Sales for the brand in the MAT Q2 2020 period were up 68%.

Ayurvedic formulation Dabur Chyawanprash (Dabur) saw sales more than double (+169%) in MAT Q2 2020, driven by strong Covid-related demand and the launch of Dabur Immunity Kit in Q2 2020, to become India’s No.1 CHC brand. Likewise, umifenovir-based medicine Arbidol (OTCPharm), which is positioned for flu as well as acute respiratory and viral infections, also saw sales more than double (+103%) in the MAT Q2 2020 period and the brand now ranks in the Top 5 in Russia.

As for products that suffered falling sales in MAT Q2 2020, notable examples were tonics & cure alls in China – such as Dong-e E-Jiao – hit by rising raw material costs and falling demand, as well as ranitidine-based antacids – such as Sanofi’s Zantac 150 – owing to concerns around NDMA and Takeda’s Alinamin EX vitamin B supplement in Japan, affected by demographic changes and a fall in tourist spending.

If you would like to review the latest launches and NPD surrounding all the leading brands in the global CHC market, take a look at CHC New Products Trackerthe ultimate competitive intelligence tool! Featuring 26,000+ launches and innovations, products are graded with a star rating, and you can search according to your specific requirements. Please contact waisan.lee@NicholasHall.com to set up your demo.

CHC market shows resilience in Q2 2020

In the 12 months to end-June 2020, the global retail CHC market grew by 4.6%. This marked a slowdown vs MAT Q1 (+5.6%), but Celine Waller, Group VP, DB6, said “the market has remained far more resilient than many expected”. A boom in prevention categories such as antiseptics & disinfectants (+38.7%) and immune supplements (+38.6%) has helped to mitigate the effect of “pantry unloading” following consumer stockpiling in Q1, while strong US growth in Q2 offset weaker performances in China and Western Europe.

Western Europe decelerated to 1.2% triggered principally by a decline in CCA as lockdowns and increased hygiene measures resulted in reduced incidence of respiratory pathologies. Low growth in Germany (+1.5%) and the UK (+1.9%) offset moderate declines in Italy (-0.8%) and France (-1.3%).

Asia-Pacific slowed to 2.7% hindered by a weak performance in China and declines in both Japan (-2.9%) and Australia (-1.3%) caused by loss of revenue from Chinese travellers. However, India was up 11.3% driven by chyawanprash, which more than doubled thanks to its immunity positioning.

North America posted a 6.4% upturn with strong US growth spearheaded by VMS (+8.8%) and Derma (+8.4%) – the latter boosted by a doubling in sales of antiseptics & disinfectants.

Central & Eastern Europe achieved growth of 8.6% with inflation-driven growth in Russia (+10.9%) offset by a comparatively weak performance in Poland (+5.2%), while the Middle & East Africa experienced a slight slowdown (+6.9%).

Latin America grew by 11.8% with both Brazil (+12.0%) and Mexico (+11.0%) up by double digits. VMS was the key contributor growing by 16.7% in the region.

We are pleased to announce Nicholas Hall’s Asia-Pacific webinar, which will be held on 12 November! Nicholas will be joined by several regional industry experts to explore key trends in the region, including a look at regional WOW! brands, growth prospects, distribution and much more. For further details, or to register, please contact elizabeth.bernos@NicholasHall.com.

How consumer shopping habits are changing

A recent report by Global Data in collaboration with Amazon describes changing consumer shopping habits during the Covid-19 pandemic. The report highlights a stark increase in online sales, but stresses that the online channel did not dominate during the peak of the pandemic — the majority of sales during lockdown were made at physical stores that remained open. In addition, the highest growth rates over the past few months are attributed to multichannel retailers, rather than pure-play online retailers.

The pandemic has catalysed closer integration of physical retail and online spaces, with many traditional retailers emphasising or introducing additional services such as curbside pick-up. These services have been well-received; almost 68% of US consumers say they will use curbside collection more, even after the pandemic has subsided. Also, in countries that have reopened post-Covid, there has been a “mini-rush” back to bricks & mortar retailers, highlighting how much consumers – especially in the US, UK and France – have missed the social interaction that physical stores offer.

As a result, the penetration rate for online is coming down as consumers resume physical shopping. According to the survey, penetration will remain elevated compared to 2019 but the peaks seen during lockdown were exceptional, not a new normal. If anything, the report suggests that the role of the physical store is actually being strengthened in some ways. In the USA, Global Data projects around 35.7% of non-food sales transacted online will be supported by a physical store this year – more than in 2019.

Comment from Laura Howard Werling, Market Analyst CIMA, Nicholas Hall Group of Companies: The Global Data report challenges the narrative that the pandemic, and subsequent growth of the online channel, spells the end for physical retail. Instead, retail stores have performed well over the past few months and are successfully utilising a multichannel approach to adapt to the disruption. Consumers have been satisfied with this approach and it should be no surprise: the modern consumer views online and retail stores as one market and navigates both spaces seamlessly to achieve maximum efficiency when shopping.

We are pleased to announce a special Q4 promotional event, which will run until the end of the year! For October only, we are offering a 25% discount on annual subscription rates for Insight and CHC New Products Tracker, alongside up to 50% on selected reports titles. Watch this space — more promotions will be coming in November and December! To find out more, or to make a purchase, please contact melissa.lee@NicholasHall.com

US Herb Market Report shows dynamism of immunity supplements

In this week’s blog, we look in more detail at the American Botanical Council’s 2019 Herb Market Report, which is based on US retail sales data provided by SPINS and the Nutrition Business Journal. According to the report, US consumers spent an estimated US$9.6bn on herbal dietary supplements in 2019, an 8.6% increase vs 2018.

For the first time, CBD made the list of 40 top-selling ingredients in the mainstream channel, where it ranked 9th at just under US$36mn, up 872% vs 2018. For the second year, CBD was the top-selling botanical sold as a dietary supplement in natural retail outlets.

Sales of immune health-related ingredients also rose sharply. In H1 2020, elderberry had the second-highest increase in the mainstream channel (+241%), making it the third top-selling ingredient; it was up 126% in the natural channel. Echinacea grew by 50%+ in both channels.

Other herbal & natural ingredients that have performed well include oregano (up 75% in the natural channel and 91% in the mainstream channel in H1 2020), which is positioned for respiratory symptoms such as cough, as well as astragalus root and mushrooms / fungi-derived ingredients with an immunity positioning. According to SPINS, sales of mushrooms (other) advanced by 84% in the natural channel and an exceptional 495% in the mainstream channel.

The report indicates that while dietary supplements with immunity positioning were the primary growth driver in the US market in the first half of 2020, other VMS ingredients also performed well, particularly those with a stress or sleep positioning. As of mid-June 2020, supplement sales appear to have levelled off; but if H1 2020 is any indication, the US VMS industry is on track for another record-breaking year.

For the full report, go the American Botanical Council’s website and download the PDF link.

Also, ensure that you have registered to join Nicholas online on 30 September for an all-new hot topics webinarYou will hear about key trends, including the impact of Covid-19, Distribution, e-Detailing and Sustainability. To find out more or register to join, please contact elizabeth.bernos@NicholasHall.com.

Assessing Covid-19’s impact on the VMS industry

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Despite various countries going into lockdown, governments are still allowing “essential” services and businesses to remain operational, putting the role of the dietary supplements industry in the spotlight. In some countries, like New Zealand, supplement marketers are allowed to maintain their operations as long as they are supplying “essential” businesses, such as pharmacies and supermarkets. However, according to the guidance provided by New Zealand Natural Health Products, health food stores do not fit the description of “essential” businesses.

The situation is similar but more complex in the USA, home to the world’s No.1 VMS market. While essential food and drug suppliers are open for business during Covid-19 restrictions, industry leaders are working to ensure that the same applies to speciality health food stores and cannabis dispensaries. No specific federal regulation is in place, but “essential business” status is being determined at state and local level. While California most decisively classified workers supporting cannabis and dietary supplement retail as essential workers, and Illinois added licensed medical cannabis dispensaries and cultivation centres to its essential healthcare operations list, not all states have set such guidelines.

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In a letter to state governors, industry associations including the Consumer Healthcare Products Association urge that supplement supply chains remain open in all states, arguing that now more than ever, consumers need essential nutrients to stay fit and healthy and proactively reduce their risk of chronic diseases without burdening an already overstretched healthcare system. They write: “As each of you plan your own approach to this challenging issue, we respectfully request you mirror White House / Centers for Disease Control & Prevention guidelines and make special accommodation for critical infrastructure industries that specifically include not only conventional foods but all subcategories of food, including dietary supplements, infant formulas, medical foods and spices & flavours.”

As for how the Covid-19 crisis will affect the VMS market, it’s clear that some categories stand to benefit more than others. Herbal & natural immune stimulants and vitamin C supplements are likely to see the biggest boost, as long as supply chains can be maintained. In certain markets, such as India and China, there is likely to be a rise in sales of country-specific natural remedies (Ayurvedic medicine and TCM) positioned for immunity support, though marketers will have to be wary of government clampdowns on products that are claimed to prevent or cure Covid-19.

For a full analysis of Covid-19’s impact on the global CHC market, pick up a copy of our all-new Hot Topic review Coronavirus 2020 and its potential impact on CHC from Nicholas Hall’s CIMA division. Buyers of this report will also receive a situation update in six months time. For more information, or to purchase your copy, please contact melissa.lee@NicholasHall.com.

Combination OTC painkillers gaining ground

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Following the approved switch of Voltaren Arthritis Pain by the FDA in mid-February, there was more positive news for GSK’s US analgesics portfolio over the weekend with the FDA approval of Advil Dual Action. This is the first FDA-approved OTC combination of ibuprofen and paracetamol (acetaminophen) in the USA, and GSK is expected to launch the product later this year.

Franck Riot, Head of R&D at GSK Consumer Healthcare, said: “For decades, many consumers have been using ibuprofen and acetaminophen (paracetamol) to get the benefits of both active ingredients when safely treating their headaches, muscle aches, backaches, arthritis and other joint pain. Now Advil, the No. 1 selling OTC pain reliever, will offer US consumers the first-ever alternative option – a single, fixed-dose combination pain reliever.” According to the reported clinical research, this fixed-dose combination achieves superior efficacy compared to the individual monocomponents of ibuprofen (250mg) and acetaminophen (500mg) alone.

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Dolostop Plus, another recent combination launch

Another combination OTC painkiller we tracked recently, formulated with both ibuprofen and paracetamol, is Kern’s September 2019 launch of Dolostop Plus in Spain. Indicated to provide symptomatic relief from mild to moderate pain in adults, these film-coated tablets are formulated with paracetamol 500mg and ibuprofen 150mg, with a stated dose of 1-2 tablets every 6 hours, and claimed to be the first and only OTC paracetamol and ibuprofen combination available in Spain.

In several markets around the world, such as the UK, Russia, Japan and Indonesia, combination paracetamol + ibuprofen OTC remedies are already well-established, but these recent developments in the USA and Spain point to growing acceptance among global regulators about the safety of fixed-dose OTC analgesic combinations.

Where will NPD take the CHC market in the future? Find out in our upcoming report, Innovation in CHC: NPD & Innovation in CHC under the Spotlight! This report, drawing on Nicholas Hall’s CHC New Products Tracker, assesses the global picture of CHC innovation in 2019, featuring ingredient trends, delivery format trends, analysing innovation trends by region and by marketer, plus much more! To pre-order your copy and save with the pre-publication discount, or for more information, please contact melissa.lee@NicholasHall.com.

GSK and Alcon get FDA approval for US switches

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Following on from our recent blog highlighting the need for a new wave of Rx-to-OTC switches to kickstart growth in the global consumer healthcare industry, this week we cover the welcome news that the FDA has approved three drugs for non-prescription use. As well as GSK’s topical analgesic gel Voltaren Arthritis Pain (diclofenac sodium 1%), two Alcon eye care allergy products (available as solution / drops) have also switched to OTC status – Pataday Twice Daily Relief (olopatadine 0.1%) and Pataday Once Daily Relief (olopatadine 0.2%).

Karen Mahoney, Acting Deputy Director of the Office of Nonprescription Drugs at the FDA’s Center for Drug Evaluation & Research, said: “Approval of a wider range of non-prescription drugs has the potential to improve public health by increasing the types of drugs consumers can access and use that would otherwise only be available by prescription. This includes providing the millions of people that suffer with joint pain from arthritis daily over-the-counter access to another non-opioid treatment option.”

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Olopatadine is available OTC in a handful of other countries worldwide, but this is the first time it’s been switched in a major market. One of the countries where the ingredient can be purchased without a prescription is Singapore, which approved the Rx-to-OTC switch of olopatadine 0.1% and 0.2% in December 2016. More recently, Poland’s Office for Registration of Medicinal Products, Medical Devices & Biocidal Products (URPL) approved the Rx-to-OTC switch of Polfa Warszawa’s Starelltec Alergia eye drops (olopatadine 1mg / ml; 5ml bottle) in July 2019 and Adamed’s Oftahist eye drops (olopatadine 1mg / ml; 5ml bottle) in November 2019.

Voltaren currently ranks fifth among the world’s leading consumer healthcare brands, according to CHC DASHBOARD, and this switch could see it move up the rankings and even move ahead of its new GSK stablemate Advil into the No.3 position globally within the next few years. While the US switch of Voltaren has long been mooted, the news is all the more welcome at a time when the world’s No.1 CHC market is in desperate need of an injection of growth, and US arthritis sufferers are also in need of a wider pool of OTC non-opioid treatment options.

For the full story, be sure to read tomorrow’s edition of CHC.NewDirections, a weekly e-newsletter sent out every Tuesday. CHC.NewDirections focuses on innovation, science and regulation, and coverage spans Rx-to-OTC switch, CBD, relevant medical research, probiotics, medical devices, digital health / AI, e-cigarettes and much more! For more information, or to arrange a free trial, please contact Melissa.Lee@NicholasHall.com

Does CBG offer hope against antimicrobial resistance?

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According to a recent WHO press release, a lack of innovation in the development of new antibiotics, allied with declining private investment, is undermining efforts to combat drug-resistant infections. The breaking news from China of a sharp rise in diagnoses of an emergent strain of coronavirus, and new reported cases in Japan and Thailand, has raised fears of another outbreak similar to SARS in 2003, which infected more than 8,000 people and killed more than 700.

WHO has raised concerns about a weak pipeline for antibiotic agents, with 60 products in development (50 antibiotics and 10 biologics) that it deems bring little benefit over existing treatments and very few that target the most critical resistant bacteria (Gram-negative bacteria). However, some positive news came from an unlikely quarter over the weekend – an as yet unpublished study that found that CBG (cannabigerol) cured mice of MRSA infections as effectively as vancomycin, a drug widely considered to be the last line of defence against drug-resistant microbes.

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One of our recent blogs looked at the potential of a new emerging class of cannabinoids beyond CBD – including CBG, CBN (cannabinol) and CBC (cannabichromene) – and this new study boosts the attractiveness of the cannabinoid industry even further. Eric Brown, the microbiologist who led the research at McMaster University said cannabinoids were “clearly great drug-like compounds”, but noted it was early days in assessing the compounds for use in the clinic.

Brown found that CBG and other cannabinoids did not work well against gram negative multi-drug resistant bugs. However, the study shows that when CBG is used along with small quantities of polymyxin B, an existing antibiotic that targets “the cytoplasmic membrane of Gram-positive bacteria”, the cannabis compound wiped out the drug-resistant pathogens. “We are now pursuing the required paperwork to work with a wide variety of cannabinoids,” Brown said.

What is the current regulatory status of CBD in global markets? Find out in Nicholas Hall’s upcoming report, CBD 2020: The 20 Most Important Questions about CBD in the Future of CHC! You can also read about the main challenges faced by CBD players, the current and forecast size of the market, and much more! Pre-order your copy before 30 January to save with the pre-publication discounted rate! To find out more, or purchase your copy, please contact melissa.lee@NicholasHall.com.

CHC trends in 2020

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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.

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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!

Update on Walgreens Boots Alliance deal

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Since the global financial crisis, mega dealmaking has gone out of fashion but could now be making a comeback with Stefano Pessina’s planned leveraged buyout of Walgreens Boots Alliance, described as potentially the “largest private equity deal on record”, according to the UK Financial Times. Days after it emerged that Walgreens Boots Alliance had held preliminary talks with private equity groups regarding a potential US$70bn deal to go private, shares in the US-based company rose again on reports that KKR had made a formal approach.

Pessina has a 16% stake in the company and already teamed up with KKR to take Alliance Boots private in 2007, though this time there is a far more challenging amount of debt to be raised in the high-yield bond market, which will be a test of market appetite for a deal of this magnitude. Nicholas Hall commented: “Last week I wrote about the possibility of WBA’s delisting from the stock market and going private: “The general view is that this deal is just too big; and yet, and yet!” Seems I was right to be cautious about writing off what might be Stefano Pessina’s magnificent swansong and the world’s largest private equity deal.”

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Walgreens Boots Alliance is the global leader in the retail pharmacy sector, operating just under 20,000 stores in 11 countries and recording revenues of US$136.9bn in the year to end-August 2019. WBA’s US retail pharmacy business accounts for 76% of this total, but operating income has declined by 20.5% owing to drug reimbursement pressures and increased competition from Walmart and Amazon. In addition, WBA’s international retail pharmacy business reported weak growth owing to a “challenging UK market”. According to a report in Forbes, the advantage of going private would be a chance to arrest the decline in WBA’s share price, down nearly 10% this year, as the deal would take the company away from the public eye and could make it easier to focus more on pharmacy point-of-care services.

Separately, under an agreement with Mitra Adiperkasa (MAP), a leading lifestyle retailer in Indonesia, WBA is to create a Boots branded pharmacy-led, health & beauty retail business in one of the world’s most populous countries. The first stores are expected to open in H2 2020. “Boots is a great addition to our diversified brand portfolio, which will help MAP further unleash the power of its 360° retailing strategy,” said Group CEO, VP Sharma. “We are confident that the combination of Boots cutting-edge products together with MAP’s solid competitive advantages will elevate the unique Boots experience to a whole new level in Indonesia.”

Announcing Nicholas Hall’s Reports End of Year SaleUp to 25% off – valid until 31 December. We are pleased to announce a special End of Year offer for our CHC Reports! Until 31 December, we are offering a 15% discount on the 2019 Reports Catalogue, plus an additional 10% discount on orders for multiple reports. If you would like additional information on any of our publications, or would like to place an order, please contact Melissa.Lee@NicholasHall.com