Growing consumer interest in natural OTCs is mirroring widespread consumer interest in seeking more natural and less synthetic products across many categories, from food and beverages to personal care products to OTCs. Natural OTCs are drug-free and may contain natural, plant, or herbal ingredients, or be homeopathic, and are used to support, prevent, maintain, or treat minor ailments such as colds, insomnia, aches and pains, or skin problems. Retailers merchandise natural alternatives near OTC medication sections or even within the same planogram. Retailers are increasingly dedicating prime areas of stores to natural OTCs, such as high visibility end-cap displays as the example below from a Target store shows. Online sales of natural OTCs are also growing fast along with sales through natural and specialty stores focused on natural products, such as Whole Foods, Sprout, and Trader Joe’s.

While natural OTCs are small, accounting for less than 3% of overall OTC market sales, their growth rate has far exceeded the OTC industry’s overall growth. For example, over a recent three-year period, the overall OTC market grew by a CAGR of 1.6% while natural OTCs were up by a CAGR of nearly 6.0% over the same time frame. Price points for natural OTCs are often higher than traditional OTCs, and they are often indicated for regimen use, making them strong sales generators for the companies producing them.

Natural and homeopathic products are growing at a strong pace, particularly in the children’s cold medications market, since many traditional OTC cold medicines have their use restricted to children ages 4 and up or ages 6 and up. That leaves parents of young children seeking alternatives and natural brands, such as Boiron’s Oscillococcinum, Zarbee’s cough syrups, and Hyland’s Complete Cold and Flu are filling the need.
Another area where natural products are experiencing rapid growth is brain health supplements that contain omega 3s, amino acids, fish oils, and other ingredients claiming to help boost memory and cognitive function. Brands like Quincy Bioscience’s Prevagen, KeyView Labs’ Procera, and Nordic Naturals’ Ultimate Omega are garnering interest from consumers seeking to maintain brain health and prevent dementia and Alzheimer’s disease. In addition to middle-aged and older consumers using these supplements to prevent or delay dementia, a growing consumer base of parents of children with learning disabilities is emerging. These consumers are interested in using these brain health supplements to help their children do better academically.
Natural OTC products for pain relief are also poised for growth. Arnica montana is a natural plant-based topical ingredient used for pain relief. Boosted by a wider retail distribution into mainstream mass retailers and increased online sales, the Arnicare brand by Boiron experienced double-digit sales growth from 2014 to 2015 as aging baby boomers seek natural products to help with pain management. Curcumin, another natural ingredient that is derived from the spice turmeric, is seeing a surge in sales for its anti-inflammatory properties and help with pain management.

Probiotics, increasingly used for digestive health and boosting immunity, is another concept that consumers are embracing. Growing probiotic brands include Align (Procter & Gamble), Culturelle (i-Health), and Florastor. Along with probiotic brands promising to boost immunity, other natural brands such as Emergen-C (Pfizer), Airborne (Reckitt Benckiser), and Zicam (Matrixx Initiatives) that contain vitamin C and/or zinc are being used to enhance respiratory immunity or reduce the duration of cold symptoms. Many of these brands have also seen large surges in sales with the addition of gummy product forms to their lines.

Depending on the brand and company, as much as 70% of sales of natural OTCs can be derived via non-mass retail channels. Online e-tailers, natural and specialty stores, health food stores, large vitamin and sports supplement chains, and integrated pharmacies often drive the lion’s share of brand sales for natural OTCs. The marketing mix used to support these natural brands is often a combination of traditional means, as well as newer, more targeted mediums. For example, many brands aimed at children will use mom blogs online to spread word-of-mouth publicity and recommendations, as well as YouTube videos to demonstrate product benefits and advantages. Other brands are being detailed to general care and specialty physicians, including ENTs, and are promoted through traditional means including product samples, coupons, and traditional media advertising.

There are a plethora of natural OTC ingredients making claims of helping to support, maintain, and alleviate common conditions such as cough and colds, allergies, hot flashes, insomnia, pain, digestive issues, and skin conditions. Products containing elderberry make claims for treatment of flu symptoms, royal jelly products claim to help allergy and asthma symptoms, cur cumin for inflammation and pain, omega 3s for brain and cardiovascular health, melatonin for sleep issues, and zinc for cold symptoms. The list of “hot” ingredients and herbs is lengthy and changes regularly, product claims are often rather nebulous, and studies on the effects of these ingredients often have conflicting results. New ingredients abound from egg shell membranes purported to help osteoarthritis and joint health, to frankincense that supposedly reduces inflammation, boosts immunity, and fights cancer, to royal jelly, which is a milky substance derived from Queen worker bees and is said to help fight asthma and allergy symptoms, insomnia, pancreatitis, premenstrual syndrome, and a host of other conditions.

The increased attention paid to natural OTCs by both consumers and retailers has prompted Kline to update its research on this segment of the market. Research about this growing market will be revealed in the upcoming Natural OTCs: Impact of Non-drug Products on the U.S. OTC Market report that is currently underway and includes extensive research with consumers, as well as many in-depth interviews with business stakeholders including manufacturers, distributors, retailers, brokers, etc. to provide a well-rounded view of the most important market drivers. Kline’s research methodology provides subscribers with accurate, realistic sales estimates through all retail outlets including natural and specialty retailers, online, health food stores, warehouse clubs, as well as mass retailers. This report will be published in June 2016. For more information about this study, please contact us.

Share this:

Posted in .