OTC indies, companies that are driving significant growth are either early adopters of a particular health trend such as Suja Life or Health-Ade Kombucha or companies that are breathing new life into iconic brands such as Infirst, Focus Consumer Healthcare, and Foundation Consumer Healthcare. These brands, collectively, generated almost $1.8 billion in manufacturer-level sales in 2018, representing more than 13% in year-over-year growth, finds the just-published OTC Indies: U.S. Analysis of Independent OTC Companies study by international market research and management consulting firm Kline.
This report analyzes almost 70 mid-to small-tier OTC companies with promise and/or iconic brands. Over the course of collecting data and conducting in-depth interviews, several trends important to the OTC industry have emerged, including digital outreach and social media utilization.
“In the OTC market, where year-over-year growth remains low to flat, brands are embracing digital marketing to help drive stronger gains. For smaller brands seeking more bang for their marketing buck, digital marketing represents a great equalizer. It’s a more efficient strategy to reach a greater swath of target demographics, and when done well, digital marketing can take on a life of its own by going viral,” comments Laura Mahecha, Industry Manager of Kline’s Healthcare Practice.
For instance, PharmaCare, with its line of elderberry, immune system-boosting supplements, certainly benefited from a strong cough/cold/flu season last year, but it was a social media post that broke the bank. The company recorded a 2018 sales lift of 237.7%.
In early 2018, during one of the most virulent flu seasons on record, PharmaCare’s immune-system booster Sambucol was promoted along with Boiron’s homeopathic flu remedy Oscillococcinum by a single consumer to fight off flu and cold symptoms. The simple post went viral, and within two weeks, Sambucol was sold out.
“That kind of viral social media activity doesn’t happen in a vacuum, however. PharmaCare has made a commitment to building its brand identity across the digital space, including through social media,” says Mahecha.
Another trend is related to the ongoing popularity of natural, clean, and organic products. When such terms are applied to an OTC or supplement brand, it usually equates to pretty explosive growth. When backed by authenticity, those claims appeal to a broad swath of consumers, from young to old, from those looking to improve their health status to those looking to keep their good health intact.
It’s not all about natural. For several venerable brands experiencing a resurgence in growth, it’s the entrepreneurial spirit and industry know-how associated with many seasoned executives who have left larger OTC players and have formed small, independent companies that are driving strong gains.
There are many brands to watch on the market. One example of a rapidly growing company is Irwin Naturals, a producer of soft gel-based herbal formulas sold in more than 90,000 retail outlets and online. Since 2015, Irwin Naturals has pursued aggressive new product launches which have driven sales gains into the triple digits, albeit from a small base. In 2018, the company appointed a new CEO, Marc Washington, who is known for his successful track record of transforming and scaling wellness businesses.
Identifying these market disruptors and learning the factors that make them resonate with consumers and retailers is crucial. Kline’s OTC Indies: U.S. Analysis of Independent OTC Companies report looks closely at each of them and offers many more examples of digital marketing and other strategies and how they propel growth for independent OTC companies. To learn more about this study, contact us or request a report SAMPLE.