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The erstwhile baseball all-star and philosopher Yogi Berra, renowned for malapropisms called “Yogisms,” had two famous quotes that could apply to the 2023 consumer health care world as it emerges from COVID: “The future ain’t what it used to be” and “You can observe a lot by just watching it.”
Ed Rowland
The post-COVID future for consumer health care ain’t what it used to be — but what is it, and why?
Continuing the baseball analogy, could it be possible to apply the famous Moneyball approach and its further refinement: WAR (Wins Above Replacement), to consumer health care categories in the pre-, during and post-pandemic season?
Watch and observe
In the early 2000s, the small market Oakland Athletics baseball team and its general manager Billy Beane faced an ugly reality: almost no money. Instead of flailing against teams with deeper pockets, the A’s pioneered an analytical, evidence-based, sabermetric approach to assembling a competitive baseball team despite their minuscule budget. The Moneyball revenge-of-the-nerds concept ultimately led to a highly analytical approach for not only a team but also every player (read CHC category). WAR measures a player’s value in all facets of the game by deciphering how many more wins he’s worth than a replacement-level player in his same position. In the CHC world, this equates to understanding each category’s performance in the COVID world and what “facets” are most important. Baseball metrics meets the playing field of consumer health care categories.
The authors analyzed the following O-T-C “Players” (categories): topical analgesics, systemic analgesics, cough remedies, antacids and sleep aids. We marked the important dates for pre-COVID (Q1 ’20 and before), COVID (Q2 ’20 to Q3 ’22) and post-COVID (Q4 ’22 onward).
See presentation slides here
These Players enjoyed various degrees of growth and recovery according to analyses of sales data from Nicholas Hall’s DB6 Global CHC Database, which has provided performance metrics for the leading CHC Players worldwide for more than 20 years. The challenge to the industry is identifying the pre-existing and external facets affecting the Player before, during and after the pandemic to determine the WOR value for the next season. Our commentary today features three field conditions: channel distribution, innovation, and a catch-all X factor.
Liz Cummings
Channel mix investigates the expansion or reduction of e-commerce and brick-and-mortar distribution when assessing the Player’s performance. Innovation, usually an aspirational part of a growth plan, can have a huge impact when it is “real,” either through switch or a new molecule (or combination). It’s a rarer occurrence but can completely reset a Player. Finally, the catch-all X factor attempts to quantify a host of other eventualities including the economy, disease incidence, regulatory pressure and supply chain.
Foremost of all COVID period facets was the temporary spike in inflation. Broad market measurement had inflation topping 7% at one point in the COVID recovery, and almost all Players commanded higher salaries (price increases) post-COVID.
Post-game commentary
As Yogi said, “You can observe a lot by just watching it.” According to our analysis, there was no return to pre-COVID normal, and the graphs clearly show very distinct playbooks:
Up, Down, Back Up, & “New” Up, Gold Rush & Return to Market Gravity.
So, what does Up, Down, Back Up, & “New” Up look like? Systemic analgesics, cough remedies and antacids fit this descriptor, but the facets affecting each performance pre, during and post-pandemic were extremely differentiated (see charts). There was a pre-COVID norm, a huge initial COVID hit, followed by a rapid recovery ramp-up and then settling into a more defined (and different from pre-COVID) growth pattern.
Gold Rush & Return to Market Gravity describe topical analgesics and sleep Aids. These subcategories enjoyed an artificial COVID bump and then retreated to a more “normal” growth pattern. While both Players had been maturing after steep growth curves pre-pandemic — topical analgesics benefited from an extremely rare Rx-to-O-T-C switch, elevating the game with new technology.
It’s important to note CHC Moneyball and WAR is not advocating for smaller marketing budgets nor giving the sales team a buffet of facets to explain away missing a sales target. Sales isn’t getting an all-you-can-eat buffet of excuses. Marketing isn’t getting their budget slashed.
Overall, Yogi was right, the future (and present) ain’t what it used to be.
Liz Cummings is the Nicholas Hall Group of Companies North American regional vice president. Ed Rowland is the principal of Rowland Global LLC (rowland-global.com). He believes in the promise of global business and supports companies in their strategy, tactics and execution of international growth initiatives.
