More than ever, consumers are relying on cost-effective, over-the-counter medications to address their health-and-wellness needs. Like nearly everything else these days, the pandemic has had a hand in this, but so, too, has the rising geriatric population in the United States, a group that heavily depends on OTC products to maintain their health.
According to Fortune Business Insights, the OTC market is expected to increase substantially from $157 billion in 2021 to $233 billion by 2028. The major areas of growth include analgesics, cough-cold and flu, vitamins and minerals (particularly those that offer immune-boosting properties), digestive aids, skin care, sleep aids, eye care, first aid, and weight loss.
And, when you consider the expanding number of people interested in self-care, natural, organic and eco-sustainability, it becomes clear why the OTC category is seeing exponential growth as of late.
Experts we spoke with said today’s younger generation possesses greater knowledge and understanding of their health-and-wellness needs, which has increased the demand for natural OTC products — especially homeopathics. A recent survey of over 5,000 natural product consumers found that 44% of participants are now taking more preventative health measures than they were a year ago. Nearly half said they will keep buying “healthier” products in the future.
Store brand interest peaks
Sales of private label OTCs have been on the rise as value-seeking consumers continue to look for healthcare products at an affordable price point. More consumers have come to realize these products are just as effective as their name-brand counterparts.
Consumers have grown increasingly comfortable buying private label OTC products online. A recent report found 25% of OTC sales take place online as convenience, breadth of products and the ability to price compare appeal to online shoppers.
“A majority of U.S. brands are being overshadowed as more consumers are choosing to buy OTC medicine from private label brands,” said Chris Beland, vice president and analyst at Stamford, Conn.-based Gartner.
“Such consumer trends have been reflected in the drastic increases in unit sales of private label OTC products and have also inspired new participants in the private label OTC space.”
Key private label OTC segments growing in popularity include pain, cough-cold, allergy, digestive aids, sleep aides and smoking ces-sation products.
“Consumers increased the number of private label products they purchased during the past year, making it almost essential for pharmacies to offer a comparable store brand,” said Ken Bianchi, executive vice president at Buffalo, N.Y.-based Safetec of America. He said this increased interest has led to a demand for more unique packaging options and sizes to help products stand out.
Bianchi said he believes the pandemic has forever changed consumer buying habits. “The pandemic has fueled the buy local and U.S.-made brand trends, accelerated interest in private label offerings, and pushed more consumers to seek out free-from, vegan and natural formulations,” he said.
Additionally, Bianchi sees more consumers looking to understand the ingredients in their topical ointments. “People are living differently, buying differently and, in many ways, thinking differently today. Consumers everywhere are looking at products and brands through a new lens,” he said.
Louis Machin, managing director of Lifelab Health in Coconut Creek, Fla. said the demand for certified organic OTC products continues to escalate as consumers flock to products featuring simple profiles, natural ingredients and free-from labels. This past year, sales of the company’s Honeyworks USDA organic cough syrups and throat sprays saw a marked increase, which he surmised, had a lot to do with their on-trend ingredient profile, featuring a unique blend of dark honey, ivy leaf extract and zinc. “These products also provide immune support, another feature consumers demand,” he said. The company has recently launched BerryWorks, black elderberry chewable tablets for immune support for children and adults.
When the WaxRx Ear Wash System was introduced in chain drug stores two years ago, it brought professional grade ear wax removal options that consumers had never seen. The timing could not have been more significant. “The new availability of a professional grade ear wax solution at the pharmacy created the opportunity for consumers to avoid the doctor’s office,” Garcia said. Looking to offer comprehensive ear care solutions for home use, retailers have been expanding their ear care offerings to include Doctor Easy’s WaxRx Refill and Earvana Ear Rinse for itchy ears to their lineups in the past year.
The pandemic provided valuable insight into the shifts in shopping behavior and the approach to mindful consumption. With e-commerce being the trustworthy hero throughout this pandemic, Gonzalez said it forced consumers to adapt. Online consumption quickly went from convenience to necessity because no other options were available, she said.
“Society as a whole now has the time and resources to shop mindfully — educating themselves, doing research, reading reviews, comparing products and pricing online before making a purchase,” Gonzalez said. “More and more, we are seeing consumers want products with clear, defined benefits in preparation for activities that fit their lifestyles.”
Earlier this year, Total Resources International launched 13 new products at Walmart Outdoors under its Be Smart Get Prepared line. Gonzalez said the comprehensive set addresses the different needs of first aid, safety and emergency survival for any outdoor situation. Be Smart Get Prepared represents a significant opportunity to make first aid relevant by encouraging consumers to become proactive instead of reactive, according to Gonzalez. “With an elevated and curated direction for outdoor safety, supported with purposeful, functional and playful packaging, the line targets millennials and Gen Z families,” she said. “Road trips, camping, hiking, heat relief, personal hygiene, pet care, blisters and insect repellant — we identified all the gaps and filled them in accordingly.”