The consumer healthcare market
This year has been marked by an overall slowdown in market performance. We saw volume across total FMCG decline to -0.2% in the year to 1 July 2017, accelerating to -1.0% in the final 12 weeks. After a prolonged period of nearly 4% solid value growth in the OTC market, this too slowed to just 0.4% with volume showing an actual decline of 1.5%.
The economic and political uncertainty around Brexit has contributed to shoppers feeling a little less confident than they did a year ago, and becoming a little more cautious when it comes to their spend. Consumers are also more demanding than ever before driven by developing tastes, lifestyle trends, desire for convenience, greater social awareness and evolving technology.
In spite of this, there was some specific category growth in OTC and surprisingly, we have the British summer to thank for it. This year’s data reinforce the impact of seasonality on growth in the OTC market.
Hayfever recorded +11.3% value growth this year and eye care achieved +5.3% value growth compared to this time last year. Early summer 2017 was exceptionally warm and as a result recorded higher pollen counts. As temperatures soared and people spent more time outside enjoying the sun, visiting local parks and attending barbeques, so too did the demand for smaller categories such as bite and sting (+14.6%), sunburn (+11.5%) and burn remedies (+17.7%), all of which recorded double-digit growth.
The biggest decline in the OTC market in 2016-17 came from a more commoditised category, pain relief, with a similar impact in the cough, cold and sore throat category. Adult oral analgesics declined by -1.8% in comparison to last year and paediatric analgesics declined -4.2%. Perhaps not surprising given the good weather in early summer, cough liquids declined by -6.5% and medicated confectionery by -1.1%. Overall, however, pain relief and cough, cold and sore throat medications are bigger, more established categories and therefore more greatly impacted by wider market trends such as changing shopper behaviour, retailer strategies and the growth of discounters.