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Exploring Competitive Strategies in Consumer Health

5/25/2022
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Consumer health is proving to be a very dynamic industry, as a focus on health has become paramount now more than ever before. Euromonitor International’s Competitive Strategies in Consumer Health examines key factors shaping the industry and propelling strong growth for companies. These include a greater focus on preventative health, with interest in the regular consumption of vitamins and dietary supplements, along with OTC products for the treatment of illness, digitalisation, democratising personalisation, and holistic sustainability, which are rising as an inclusive part of health and wellness.

A world moving towards holistic health, and companies supporting the cause

Consumer health is proving to be a resilient industry, with people focusing on holistic health to function well in everyday life, prevent the onset of illness, and treat diseases in order to build a wholesome, uninterrupted and long life. Leading companies such as Nestlé, GlaxoSmithKline, Bayer, Sanofi and Johnson & Johnson are adjusting their strategies to consider this “new normal” as the pandemic stabilises.

Key factors shaping the industry and propelling it towards growth

Despite change being the only constant, with uncertainty in the global economy brought about by the domino effect of the pandemic, the overall consumer health industry witnessed growth of 4% in 2021, with continued growth in vitamins and dietary supplements and recovery across other categories. Many companies are reviewing their strategies, mergers and acquisition activities, and brand and geographic portfolios. For example, Nestlé’s acquisition of vitamins and dietary supplements brands from The Bountiful Company stands out in terms of scale, while GlaxoSmithKline and Johnson & Johnson have announced the pending separation of their consumer health businesses for a more streamlined focus. In addition, we have identified five key factors that are shaping the industry and propelling it towards growth. These are:

Focus on preventive health

The COVID-19 pandemic led consumers to focus on long-term unmet needs around maintaining holistic health, including mental and physical support, rather than merely treating illnesses. For example, taking vitamins and dietary supplements more regularly and boosting immunity have become part of the “new normal” of “being healthy”. This greater focus is also seen through Euromonitor International’s Voice of the Consumer: Consumer Health Survey from 2021, in which 63% of consumers considered having a healthy immune system as being healthy, while 56% cited the absence of disease and 55% maintaining a healthy weight. To stay relevant and with the times, companies are responding to these wants and needs. For example, GlaxoSmithKline is splitting into two leading companies by the middle of 2022, one to continue as GlaxoSmithKline, with a focus on prescription medicines and drugs, and another containing its consumer healthcare range, under the name of Haleon, in an attempt to focus on the company’s various consumer health megabrands and hence deliver “better everyday health with humanity”.

Euromonitor Consumer Health Survey Results 2021

Source: Euromonitor International Voice of the Industry: Consumer Health Survey (March 2021)

Illness treatment 

Demand for illness and disease treatments recovered in 2021 across OTC categories. Systemic analgesics, especially acetaminophen, saw growth by providing symptomatic relief from COVID-19 and vaccine side-effects. The return of seasonal flu also led paediatric cough, cold and allergy remedies to witness 10% growth in current value terms in 2021. While demand led to recovery, innovation in this space will also contribute to propelling growth further. For example, in 2021, Johnson & Johnson announced it was separating its Consumer Health business from its MedTech and Pharmaceutical business of Janssen to further accelerate innovation, streamline business strategies and in turn better serve its customers and patients.

Digitalisation

The scope of digitalisation within healthcare extends from e-commerce to a broader omnichannel approach that uses technology to understand consumer trends, innovate around new product development, improve supply chain efficiencies, and connect with consumers through pharmacies, clinics and hospitals. According to Euromonitor International’s Passport Consumer Health, e-commerce witnessed growth of globally in 2020 alone within the overall industry, a trend which continued in 2021, with 4% growth. Meanwhile, brands are incorporating tech to better connect with consumers. For example, Procter & Gamble’s Vicks US website recommends products to consumers based on various factors, such as age and symptoms.

Democratising personalisation

Consumers are increasingly aware that each body is different, and may respond differently to health products, and as such they are demanding products that meet their specific health needs and priorities, hence the idea of democratising personalisation. According to Euromonitor International’s Voice of the Consumer: Lifestyles Survey in 2021, 51% of respondents stated that they want products and services that are uniquely tailored to them. An increasing variety of products have appeared with different mechanisms and approaches to engage directly with consumers’ unique health demands, with companies including HUM Nutrition, Ritual, Care/of, Nurish by Nature Made, and Get Roman seeing recent success.

Examples of brands personalising consumer health products.pngHolistic sustainability

Holistic sustainability is rising as an inclusive part of consumer health, as purpose-driven brands relate more to consumers. According to Euromonitor International’s Voice of the Industry: Sustainability Survey from June 2021, 53% of industry respondents stated being a purpose-driven business was a focus of company philosophy. Companies are hence highlighting holistic sustainability as part of their brand strategy, focusing on themes such as purposeful living and environmental stewardship as components tied into better health and wellbeing. Consumer health players from Nestlé and Procter & Gamble to Bayer and GlaxoSmithKline have published sustainability reports that highlight future goals, as consumers become more mindful of their environmental footprint, a trend which is set to continue in the future.

With many case studies, the report also showcases how leading companies are strategically focusing on specialisation, product innovation and acquisition to accelerate growth within wellness, OTC medicines, vitamins and dietary supplements, sports nutrition, and weight management and wellbeing.

For furhter insight, see our full report, Competitive Strategies in Consumer Health.

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