TOP 10 CONSUMER HEALTH COMPANIES 2017 BY VALUE (USD MILLION)

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  1. GlaxoSmithKline Plc – 3.7
  2. Johnson & Johnson Inc – 3.5
  3. Bayer AG – 3.3.
  4. Sanofi – 3.1
  5. Pfizer Inc – 2.5
  6. Herbalife Ltd – 2.0
  7. Reckitt Benckiser Group Plc (RB) – 1.7
  8. Amway Corp – 1.6
  9. Procter & Gamble Co – 1.5
  10. The Nature’s Bounty Co – 1.2

Source: Euromonitor International

Increasing Consolidation in Consumer Health

The healthier lifestyle movement has driven broad growth in consumer health sales. 2017 saw a deepening of the competitive consolidation that defined the consumer health industry over the review period.

Overall, the combined share of the top five companies increased by 2.3 percentage points over 2012-2017. A vast majority of that consolidation came in the OTC space, while the marketplace for vitamins and dietary supplements, sports nutrition and weight management and wellbeing products were decidedly more open, due to lower barriers to entry, fewer regulatory hurdles, and the proliferation of trendy nutrition and wellness opportunities, which have bolstered the success of niche companies focusing on fast-adapting consumer trends.

Connected Digital Consumer Health

The rise of digital consumer health is growing at a rapid pace as apps and e-commerce tools are promoting healthier lifestyles through diagnostic monitoring and self-education pathways. Personalisation to subscription services is connecting the growing cohort of healthy consumers on their health journey. Engaged consumers expect to be able to access personal health information wherever they are and use this information to make purchase decisions. Businesses are increasingly experimenting new ways to engage with the consumer during the buying process through interaction via social media, health, and fitness micro influencers and digital health solutions.

Middle-Class Support for Private Labels

As disposable incomes decrease in middle-class households worldwide, the demand for consumer health products is also weakening. This is in direct effect of prevention products, as many consumers are optimizing their limited resources and view supplementation as a cost-effective way to sustain longer healthy living.

However, private label products are becoming increasingly attractive to younger consumers that are swayed less by brand loyalty especially in cases when they do not actively feel the benefit of paying more for a particular brand. In addition, many private label offerings such as Walgreens, Boots or Target, have improved their marketing, packaging and messaging, to the point that many consumers value and trust the brand legacy of these retailers as much as or more than longstanding drug manufacturers. Again, however, consumers driven by price factors can also be swayed by greater outreach from market leaders in the form of smaller, sampler pack sizes and greater availability in cheaper discount outlets.

As a result, larger FMCG companies are acquiring smaller labels, direct-to-consumer firms, and niche positionings. Innovation and cross-pollination among smaller firms are rampant and Euromonitor International predicts to see more consolidation in 2018.

Moving forward, the adoption of healthy living as a proactive lifestyle choice will become a way of life for many consumers globally, encompassing a broader, more holistic sense of health that includes mental, physical, spiritual, and emotional and environmental factors. Companies who can meet these attributes and needs will drive increased revenue while building a meaningful relationship with the consumer.

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