OTC product categories experience mixed fortunes

OTC product categories experience mixed fortunes
Product launches and marketing investment, which have been curtailed by the COVID-19 pandemic, will be turned back on in 2021, says Amit Shukla, global head, consulting services and thought leadership at IQVIA Consumer Health

16 February 2021 - Deborah Wilkes

One of the most intriguing aspects of the COVID-19 pandemic in 2020 was the widely differing performances of OTC product categories, says IQVIA Consumer Health’s Amit Shukla.

The vitamins, minerals and supplements (VMS) category recorded very strong sales growth as people sought to boost their immunity and fortify their health, comments Shukla, and the Skin category benefited from people protecting themselves by sanitising every possible touchpoint.

By contrast, he continues, sales of Cough, Cold & Respiratory products dropped as social distancing and school closures reduced the incidence of allergies and coughs, colds and flu.

Shukla also notes that sales growth for Digestive remedies was curbed by people in most countries cooking healthy food at home.

Surging sales ahead of lockdowns

Shukla – who is global head, consulting services and thought leadership at IQVIA Consumer Health – tells OTCToolbox that “pandemic fear” was behind a worldwide surge in sales of VMS and skin products in March 2020 ahead of lockdowns. VMS sales increased by 54% while skin sales rose by 32%.

The surge subsequently subsided, as the pantry-loading had been excessive and people were still using up the products in August 2020.

The start of the flu season in September 2020 sparked more panic buying, says Shukla, but this time retailers and manufacturers were better prepared to meet the surge in demand.

According to IQVIA Consumer Health’s figures for the 12 months ended 30 September 2020, the global OTC market grew by 2.3% to USD130 billion at manufacturers’ selling prices (click here to read the News story).

Growth was led by the VMS & Tonics category, which recorded sales up by 9.1% (see Figure 1 below).

Figure 1: Breakdown of global OTC market in the 12 months ended 30 September 2020 – worth USD130 billion at manufacturers’ selling prices – by product category, showing value share and value growth. VMS is vitamins, minerals and supplements. Figures are based on sales at manufacturers’ selling prices. Growth figures use the latest exchange rates across all time periods with local currency growth aggregated into dollars (Source – IQVIA Global OTC Insights/OTCToolbox)

 

IQVIA Consumer Health says the VMS category performed strongly throughout the first nine months of 2020, recording growth of 16.1% in the first quarter, 6.6% in the second quarter and 11.5% in the third quarter. That compared with growth of just 2.5% in the fourth quarter of the previous year.

The Skin category also recorded strong growth of 7.1%.

By contrast, sales of Cough, Cold & Respiratory products dropped back by 2.4%. The second worst performing category was Digestive with a sales rise of 1.3%.

Prospects for 2021

Looking at the prospects for 2021, IQVIA Consumer Health says sales growth for VMS and Skin products is expected to settle at a more reasonable level of between 5% and 7%.

Noting that this is still above the OTC market average, the market researcher says some changes in behaviour will stick around and may well become permanent.

IQVIA Consumer Health says three other big categories – Cough, Cold & Respiratory; Pain Relief; and Digestive – are expected to recover as people begin to go out and travel more, and children return to school.

The market researcher also highlights that product launches and marketing investment, which had been curtailed by the COVID-19 pandemic, will be turned back on.

Click here to contact Amit Shukla by email.

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