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.
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.
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.
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.
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.
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