Dermatologicals in the US

2020 IMPACT

School closures negatively impact antiparasitics/lice treatments

Most categories of dermatologicals are expected to see positive growth in current value terms in 2020, although medicated shampoos and antiparasitics/lice treatments will continue to see declining sales. Given that closures of schools and other communal activities among children (summer camps, sports etc) will likely lead to lower incidence rates of lice in 2020, this category is projected to decline faster than in 2019, despite product innovations that include more natural formulations.

Self-treatment in lieu of doctor’s visits contributes to growth in OTC dermatologicals

High unemployment rates (and potentially the loss of employee-covered health insurance), tighter consumer spending and the fear of exposure to the COVID-19 virus are contributing to increasing demand among US consumers for self-treatment with OTC products. In addition, consumers are shifting their spending to focus on food and essentials.

Medicated shampoos negatively affected by home seclusion

COVID-19 is negatively impacting hair care categories in beauty and personal care and, similarly, in medicated shampoos in consumer health. It is not the case that psoriasis, seborrhoea or serious dandruff incidences have declined, but rather consumers’ daily lives are mainly home-based in 2020, relieving social pressure to treat these conditions.

RECOVERY AND OPPORTUNITIES

COVID-19 drives the e-commerce performance, but the channel will need digital support to sustain long-term growth

E-commerce has historically been seeing steady, but modest, growth in dermatologicals in the US, given that these products are perceived as meeting “need it now” demands. However, the impact of COVID-19 expanded the reach of e-commerce through click-and-collect, curbside pick-up, personal shopping services and same-day delivery from mass channels to US consumers, whose urgent needs for dermatologicals have not changed.

Long-term demand could be negatively impacted by declining birth rates

Stable demand for nappy (diaper) rash treatments is expected in 2020, but it may experience decelerating growth over the forecast period due to several factors. The declining US birth rate, which fell to 11.

Opportunity for differentiation through natural formulations

COVID-19 will impact dermatologicals differently across the various categories, with antiparasitics/lice (head and body) treatments on a downward trend, given school closures, but topical germicidals/antiseptics on an upward trend as more consumers self-treat and focus on health and wellness. However, regardless of positive or negative COVID-19 impact, a trend towards natural formulations could help product differentiation, as US consumers increasingly associate natural or cleaner formulations with health and wellness.