Sector Report

Sector Thesis

Growth of the Consumer Health market (valued at $350B) is being driven an aging population, an elevated focus on preventive healthcare, and an expanding middle class. However, growth trends have been obfuscated by volatility caused by the COVID-19 pandemic. In our view, many larger consumer companies have not focused on innovation, creating an opportunity for middle-market brand aggregators. These middle-market brand aggregators, in turn, have successfully embraced social media, influencer marketing, and AI-driven sales strategies.

Over-the-Counter (OTC) Medicine

• The OTC market has experienced significant volatility due to the impact of the COVID-19 pandemic on demand for cough, cold, and flu products. Demand trends are starting to normalize in 2024.

• Rx-to-OTC switches have been a focus in the OTC market. The FDA has been actively encouraging Rx-to-OTC switches, and brands scheduled to come off-patent could be profitable targets.

• Women’s health products are growing faster than the overall OTC market, and the recent Rx-to-OTC switch of Perrigo’s contraceptive, Opill, has created a new category in this space.

Vitamins, Minerals & Supplements (VMS)

• VMS demand has normalized to a historical growth rate in the mid-single digits. Post-COVID, general awareness of preventive health has continued to be an underlying driver of demand.
• Nutritional support programs and active lifestyle supplements, including proteins and multivitamins, are emerging as a new driver among a growing number of patients using GLP-1 medications.

Personal Care & Wellness (PCW)

• The PCW market exceeds $5B+ annually, with an expected annual growth of ~6%. The market consists of a very broad spectrum of products ranging from health, appearance, fitness, nutrition, mindfulness, and sleep — beyond the traditional categories of OTC and VMS.
• We have been monitoring the ongoing trend towards “clean” personal care — consisting of shampoos, deodorants, beauty supplies, and other products being made with natural ingredients. This a largely unregulated term created in response to the otherwise limited regulation in many of these industries.

We hope you find this information valuable. If you’d like to discuss further, please reach out to our Research team or Head of Research Don Hooker.