Clarkston’s consumer healthcare experts recently attended the 2023 Consumer Healthcare Products Association (CHPA) Annual Self-Care Leadership Summit. The three-day event brought together leaders, industry groups, service organizations, and manufacturing partners within the consumer healthcare space to discuss key industry trends and avenues for continued collaboration. Below, we outline some of the key takeaways from the 2023 CHPA Annual-Self Care Leadership Summit.
2022 Performance and 2023 Trends
Circana (formerly IRI) presented a state of the industry, sharing the performance of the consumer healthcare space in 2022, key trends for 2023, and an analysis on the competitive landscape. A few of the key points included:
- The industry has seen DTC-born brands hit the shelves at traditional brick-and-mortar stores, with Target serving as an incubator for many of these brands.
- Brands have also outperformed private label brands the past three years; however, private label began to make a resurgence in 2022.
- The industry overall continues to see growth, particularly in the grocery, mass, and eCommerce space, but that growth has been largely driven by price across all segments.
- eCommerce had the biggest growth in the past year – up 16% in 2022 – so it’s time to think of it as an omni-channel (just like grocery, mass, drug, etc.) rather than a trend, and companies should consider how this will shift their strategies.
- Cold and flu products continue to drive growth in the category, with mega brands across categories leading the way; however, product purchases are reflective of consumer mindsets, with growth in performance-enhancing drinks and a slow shift from vitamins to more protein and weight control products. Consumers are prioritizing health more and not just “acute” needs.
- The category saw explosive growth during the pandemic, so as growth normalizes and shifts to maintenance products, there is some “down” growth, but still overall category growth.
A Look at the Merger, Acquisitions, Spinoff Landscape
Consumer health continues to grow 3-4% year-over-year. Presenters were optimistic about the market for both strategics and private equity since companies held off on transactions at the end of 2022. There’s demand for single brands that have a unique position in the market, and the industry continues to watch the story of “the spins” GSK to Haleon; J&J to Kenvue (planned for 2023); and IPO (answering to shareholders). Further, the industry is seeing creativity in deal structures that are not full buyouts but rather majority ownership to de-risk the investment.
As consumer interest in their heart health, blood pressure, mental health, and circulation rises, the trend of “healthy aging” will come into focus, particularly as Boomers continue to age while also maintaining a growing interest in self-care and well-being. Healthy aging products – as well as products used to help consumers with their sleep, stress, and mental health – will continue to pique interest in the market for brands looking to expand their product offerings.
Leadership’s Role in Defining Culture
Providing timely feedback can be difficult, particularly as we continue to navigate hybrid working environments. Leaders, however, have a responsibility to provide constructive, timely, and consistent feedback to their employees to keep them engaged, motivated, and connected to the work they’re doing. In one study presented, only two in 10 U.S. workers feel connected to their organization’s culture. How can we fix this? Ginny Clarke, and executive recruiter, leadership strategist, and career expert, shared that it needs to start with a mindset shift for leaders who can build a foundation for talent. We should be assessing employees on their competencies, not just their experiences and pedigree. For example, asking a someone how they did something rather than just what they did. This shift in mindset for leaders can play a significant role in how they help to define the culture at their organization: one that values transparency, empathy, accountability, and employee development.
Sustainability in the Industry
Many factors are driving the demand for sustainability in consumer healthcare – consumers are seeking out sustainably sourced and packaged products, they’re creating their own definitions of what it means to be sustainable (and seeking brands that meet those needs), and they’re being mindful of greenwashing and how brands market themselves. In fact, 92% of consumers said sustainability is important to them today in their purchasing decisions. However, they’re also not willing to trade the efficacy of a product for a sustainable one, and ultimately while they want to feel connected to products, price still wins over sustainability.
For brands across the industry, recyclable packing has become table stakes. They also need to be mindful of the quality of the products they’re producing and the tradeoff for being more sustainable or environmentally friendly. We’re seeing that brands that play across multiple pillars of sustainability are outperforming others, and big brands (although late adaptors) are making a big impact, whereas private label is driving outside growth. For brands exploring ESG in their products, they’ll need to make sustainability a competitive differentiator in order to find success.
The Future of Consumer Healthcare: Takeaways from the 2023 CHPA Annual Self-Care Leadership Summit
Consumer healthcare is a growing and evolving space, as consumers are prioritizing their health and well-being perhaps more than ever before. So, what can brands in this space to do remain competitive and relevant? During the conference, it was shared that 42% of CP executives say the inability to integrate data from multiple sources is the main barrier of growth. In an increasingly competitive market – one with continued M&A activity, evolving consumer demands, and YoY growth – the ability to manage data and analytics and leverage that information to drive decision-making will be key to success.
To chat more about key takeaways from the 2023 CHPA Annual Self-Care Leadership Summit or to learn about our consumer healthcare consulting services, connect with us today.