Consumer Health: Quarterly Statement Q1 2021

March 2021

In mid-March 2021, Euromonitor International published revised Q1 forecasts for consumer health in the context of a slightly more positive macroeconomic outlook. The implications of this revision are expected to be muted for consumer health, as it is highly income inelastic; thus the forecasts have not changed much in this update. Considerable uncertainty remains due to the speed of the global vaccine deployment and the stickiness of behaviours once countries ease restrictions.

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Key findings

Forecasts from 2021-2025 are largely unchanged during quarterly review

Euromonitor International’s Q1 update for 2021-2025 shows a very slight revision to consumer health forecasts compared to baseline expectations published in September 2020. Updated industry forecast growth is steady, with a value CAGR of 2.5% now forecast, instead of 2.6% for the five year forecast. This negligible difference underscores the limited effect of macroeconomic factors on consumer health sales.

Uncertainty reigns, but likeliest scenario is return to strong growth in 2021, followed by a healthy performance thereafter

The Q1 update reflects the positive impact of the vaccine rollout that has begun in many countries. As a result, the baseline expectation for the Q1 update is for widespread vaccine deployment by at least Q3 2021 in developed economies, thereby providing the space for consumer health growth through lower restrictions to movement and socialisation. The model continues to project consistently strong industry performance thereafter, as behaviours revert to pre-COVID norms.

2020 growth re-estimated downwards to account for full-year effects of COVID-19

The Q1 update includes adjustments to full-year 2020 growth to reflect substantial changes to some categories’ performance in Q3 and Q4 2020, after Euromonitor published its baseline expectations in September 2020. In particular, the Q1 update reflects the collapse of cough and cold remedies that occurred in the second half of 2020 due to continued lockdowns and social distancing measures.

Leading competitors taking no chances and are placing their bets on their strongest brands

Despite the positive forecasts for consumer health, considerable uncertainty remains around future waves of COVID-19 infections, the pace of the global vaccine programme, and the behaviours of consumers post-vaccination. As a result, global consumer health companies have announced plans for brand divestments and rationalisation to focus planning on core brands and categories that have a history of steady growth and are likeliest to withstand uncertain near-term scenarios.

Introduction

Scope
Key findings

Q1 Consumer Health Update

New quarterly forecast lowers future consumer health growth slightly
Income elasticities for consumer health are low across-the-board
Forecast scenarios present very different pictures for consumer health
Emerging economies seeing slight downward revisions in Q1 review
Q1 revisions reflect further declines to cough and cold remedies
Expectations for cough and cold remedies drop in nearly all countries
US category revisions point the way for near-term growth projections
Leading players planning for 2021 by trimming the fat
Expectations for 2021 are for a return to stronger growth
Health concerns surfaced during COVID-19 to spread in the forecast
Factors to watch in 2021

Q1 Macroeconomic Update

Global baseline outlook: Downside risks to the recovery have declined
Uncertainty remains high, but with a more optimistic tilt
Real GDP annual growth forecasts and revisions from last quarter, AE (%, percentage points)
Real GDP annual growth forecasts and revisions from last quarter, EMDE (%, percentage points)
COVID-19 scenarios summary

About Our Industry Forecast Model

About Consumer Health quarterly forecast updates
Euromonitor International and COVID-19: forecasts and analysis
Data and reporting timeline for Consumer Health
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