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54 HEALTH ALLERGIES ALLERGY SALES ALL OVER THE MARKET LIKE A RASH ccording to the Australian Institute of Health and Welfare, hay fever, or allergic rhinitis, affects an estimated one in five, or 4.5 million, Australians, both adults and children. It has been the most common allergic disorder in this country, mainly being caused by pollens, dust mites, moulds and animal hair. In the 52 weeks to 31 January 2021, the value of the Australian market for allergy products reached $324 million, growing strongly at 17.5 per cent, having grown 5.6 per cent in the previous 52 weeks. Pharmacies were the key distribution channel for this category, contributing more than 90 per cent of the sales. However, we saw grocery channel growth expedited in the 52 weeks to 31 January 2021 (growing at 38 per cent versus YA), driven by shoppers’ reduced shop visits in the pharmacy channel during Covid lockdown. Seasonal influence Hay fever is a seasonal allergic rhinitis. In south-eastern Australia you get it as we come into spring and early summer. As presented in the sales-trend chart, August to November has consistently been the peak allergy season across the year. It’s important that manufacturers make sure their products are visible on the shelf for this period, particularly in October, when sales peaked in both 2018 and 2019. New behaviours during Covid Apart from the previous two years, 2020 stood out as an unusual year for allergy, as it did for most other FMCG industries. Category sales increased dramatically in March 2020 when intense panic buying began shortly after the Covid breakout, and then decreased significantly from the peak, remaining flat from April to June. Through the IRI Shopper Panel, it’s found that ‘expandability’ has been derived from the panic buying month, primarily driven by ‘increased new category triallists’ and ‘existing shoppers spending more on the category’. These ‘new behaviours’ experienced by the category brought incremental growth when the allergy season kicked in, leading to a better YOY monthly performance in 2020 from June. Shopper dynamics According to IRI’s Shopper Panel, during the 12 months to 31 January 2021, allergy products could be found in 28 per cent of Australian households, up 2.4 percentage points compared with 12 months previously. Of those households, half would repeat purchase in a 12-month period. On average, shoppers were spending 16 per cent more on the category in the 52 weeks compared with the period to 31 January 2020, with more frequent shop visits (up by eight per cent versus YA). The largest consumer demographic group were people aged over 65 and predominantly female. The demand for allergy products has also grown strongly in both young and older families, with a two-percentage-point increase leading to 10 per cent and 13 per cent, respectively, of all allergy category sales across Australia over the 12 months to 31 January 2021. Manufacturer performance and private label rise Pharmaceutical giants Sanofi, Johnson & Johnson and Bayer are the leading players in allergy products across Australia. Their corresponding brands, Telfast, Zyrtec and Claratyne, have been growing faster than the category with above 20 per cent growth rate, respectively. All three brands have taken half the total allergy market share. On the other side, four out of the top 10 performing brands are private label brands, which in total accounted for 13 per cent of total market share in the 52-week period. Pharmacy owned brands, including Chemist’s Own, Priceline and TerryWhite Chemmart, also outperformed the category. If this growth in private label products continues, it will put pressure on manufacturers of branded products to reduce their prices, causing value to be lost from the overall category. What’s next? Increased demand for allergy products and a Covid-driven expanded shopper base bode well for future growth. However, pricing pressure driven by the rise of comparable private label products is becoming more severe. To avoid this drop in price and leakage for retailers, it’s crucial that branded products have a clear brand differentiation and retain high brand loyalty. Sources: IRI MarketEdge data, Australia Grocery Pharmacy, MAT to 31/1/21 IRI ShopperView, National, MAT to 31/1/21 By Joanne Liu. IRI Senior Associate Consultant Joanne Liu is a Senior Associate Consultant at IRI with nearly three years of experience in the field of market insights and consulting. Joanne has also worked in the market research industry in the Asia market providing insights to global FMCG clients. IRI is the leading provider of big data, predictive analytics and forward-looking insights for the FMCG industry. For more information, visit: iriworldwide.com. RETAIL PHARMACY • JUN 2021