The overall OTC market has not shown much excitement as of late, especially with low to no growth, manufacturing plant shut downs and brand recalls. However, in the nutritional products segment of the market, there is rapid growth and excitement and there have been several high profile acquisitions in this space recently showing that many companies are moving into this area in order to bolster their traditional OTC businesses. In late 2012, Reckitt Benckiser and Bayer dueled for Schiff with Reckitt Benckiser the victor after bidding over $1 billion for the maker of MoveFree.
In late 2012, Reckitt Benckiser and Bayer dueled for Schiff, with Reckitt Benckiser the victor after bidding over $1 billion for the maker of MoveFree and MegaRed supplement brands and Sustenex and Digestive Advantage probiotic brands. The nutritional products area is not one that Reckitt Benckiser competed in prior to the acquisition, but one that is adjacent to its OTC Mucinex and Delsym brands and home health business focused on the Lysol line.
In the summer of 2012, Church & Dwight acquired Avid Health for $650 million. Avid Health is the parent company of Northwest Natural Products and Nutrition Now, makers of gummy vitamin brands Vitafusion for adults and Lil Critters for children. This also marks a new category for Church & Dwight with other major consumer brands like Orajel, First Response, and Arm & Hammer.
In 2011, Royal DSM acquired Martek Biosciences, parent company of Amerifit and iHealth, for over
$1 billion. Royal DSM now markets the Culturelle probiotic and Estroven herbal brand in the U.S. as a result of this acquisition.
With the large size of these deals, it is clear that these acquiring companies are forecasting strong growth from these brands and markets in the coming years. These brands and market segments have been driving strong gains recently. For example, the combined markets for laxative probiotics and nutritional probiotics have grown by double digits recently and include brands such as Align (Procter & Gamble), Culturelle (Royal DSM), Sustenex and Digestive Advantage (Schiff/Reckitt Benckiser), Centrum Pronutrients Probiotics (Pfizer), One-A-Day Trubiotics (Bayer), Nature Made Digestive Health Probiotics (Otsuka), and Provella (Upsher Smith). Furthermore, the MoveFree (Schiff/Reckitt Benckiser) glucosamine and chondroitin joint health brand has posted gains of nearly 20% over the past year and over 60% the prior year. Schiff’s MegaRed Omega 3 brand posted gains of 150.0% in sales in 2012.
Sales, market share, growth, and forecasts for all of these companies, brands, and markets are provided in Kline’s Nonprescription Drugs USA 2012 study. The report also provides analysis of each of these acquisitions and an interactive database.