It was only a year ago that people were bracing themselves for another spike in swine flu.
Despite a steady decline in the number of outbreaks since July, the paranoia hadn't abated, compounded no doubt by general anxiety over the state of the economy. But it never happened. And neither did the expected increase in sales of winter remedies.
Having experienced a 13.2% hike in value in the year to August 2009, sales fell by 1% by both value and volume year-on-year [Kantar Worldpanel 52w/e 8 August 2010]. Worst hit were cold treatments, which slipped 6% by value and volume, and decongestants, down 4% by value and 3% by volume.
Of course, swine flu wasn't the only factor to blame. In fact, it wasn't even necessarily the biggest. That plaudit has to go to the recession, which made people reduce the amount they spent on cold and flu treatments and the type of remedies they bought,
"Cold treatments took the biggest dive as these products are comparatively expensive and some shoppers chose to buy analgesics [painkillers] coupled with other remedies as an alternative," says Kantar analyst Tim Nancholas. Eight out of the top 10 cold and flu remedy brands experienced a fall in sales as a result, the notable exceptions being own-label and Karvol, suggesting children's health is the one area where people aren't prepared to trade down from a brand to own label.
The same could certainly not be said for branded cold and flu products. Market leader Lemsip lost 9.2% of value sales and 13.8% of volume sales year-on-year [SymphonyIRI 52w/e 7 August 2010]. Sales of closest rival Beechams, meanwhile, fell 6.8% by value and 9.0% by volume. "There was a lot of media hype about swine flu but we saw fewer incidents than in previous years," says Carla Speering, senior brand manager, cold and flu, for Beechams owner GlaxoSmithkline.
People were already prepared, adds Stefan Gaa, marketing director for Lemsip supplier Reckitt Benckiser UK. "Swine flu didn't hit as severely as was feared, and when people came into the season they had already stocked up," he says.
While the major brands have been looking decidedly peaky, own-label cold and flu remedies have been hale and hearty, rising 3.9% by value and 7.5% by volume [SymphonyIRI] as consumers trade down from brands.
"People have become more savvy about active ingredients, opting for a non-branded medicine rather than paying more for a branded one," says SymphonyIRI senior insight manager Russell Jones.
In order to help suppliers persuade people to buy back into branded products, "brands need to work harder to convince people why they should opt for a branded product," he says. One way a brand can do this is by highlighting how quickly a product can take effect, he suggests.
Brands aren't the only ones that need to raise their games. High street specialists are also struggling to compete, partly as a result of the upsurge of interest in cheaper own-label goods. It's perhaps no surprise that Boots and Superdrug now under-index when it comes to winter remedies.
"As own-label offers improve and supermarkets improve their range and offer in-store pharmacies, there is less reason for people to make a special trip to Boots or Superdrug," says Jones.
Despite the market's heightened price sensitivity, there are potential growth areas, such as cough liquids. Although volume sales have slipped 2% over the past year, value sales are up 3%. This has been driven by shoppers opting for premium, value-added products, says Gaa. Kantar's Nancholas adds that they have benefited from a trend for shoppers to buy healthcare products targeted at specific ailments.
The real success story of the past year, however, has been the cough/throat lozenge market, which has risen 5% by value to £60m and 4% by volume [Kantar]. That they are used to relieve a wider range of conditions than cold and flu remedies is one reason for this, suggests Gaa, while Nancholas points to their relatively low price points and the fact they are also stocked in the confectionery aisle.
Sales of some key brands are thriving. Fisherman's Friend Original Extra Strong grew14% in value in the year to August 2010 [Nielsen] and owner Lofthouse says sales of the sugar-free blackberry variant rose 43% in the same period.
NPD has also boosted the sub-sector's performance. Reckitt Benckiser says the Handy Tubes format it launched for Strepsils last October has performed "exceedingly well", for example. And the brand is currently rolling out a Warm variant that contains wasabi, ginger and plum and is designed to give a comforting sensation similar to a warm drink (rsp: £2.54 for 16 and £3.82 for 24). The flow of NPD has continued with launches from suppliers such as Halls and Covonia (see boxout).
And innovation hasn't been confined to existing product areas, with Manflu a soothing drink for sickly fellas rolling out to 400 Sainsbury's stores this month.
Suppliers of tissues and hand wipes have also been busy with NPD over the past year following a boost in consumer awareness during the swine flu outbreak.
"Many consumers bought Sani+Hands during the outbreak," says Ian Anderson, marketing director of the antibacterial hand wipes brand, which he claims saw record growth during the pandemic.
Tissue category sales are now the highest they have been ever been, and are already up 3.6% on last year, according to Kleenex marketing manager Marc Zander.
"Swine flu certainly raised awareness," he says. "Because there was such media hype last year we got more supermarket support and more in-store features for facial tissues," he adds. The brand will build on these opportunities with a major push for Kleenex Balsam and the launch of Kleenex Pocket, an ultra-thin pack.
Things may also be looking up for the rest of the winter remedies market, Zander suggests, as "after a weak cold and flu season you tend to get a stronger one".
The Department of Health is certainly taking the threat seriously and has urged people to be prepared. In a statement issued last month it warned that swine flu will be circulating again this winter, and has extended the list of those being offered flu jabs to include the pregnant.
And while few people would welcome a strong flu season, it may be just the shot in the arm winter remedy brands need.
Focus On Winter Remedies