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THE BACKGROUND

Brands have been working hard to respond to consumers' desire for maximum-strength cold remedies that they can carry around with them. Last year, GlaxoSmithKline launched a £6.6m campaign to support its Beechams All in One Liquid Pocket Packs in November, using the strapline 'Until there's a cure, there's Beechams'. This was closely followed by activity from Benylin in December, promoting its redesigned Cold & Flu Max Strength range, an extension of its cough-medicine brand.

It may have been a mild winter so far, but it will not have stopped consumers succumbing to colds or flu and reaching for remedies to ease their symptoms.

While the incidence of colds remains stable and cases of flu are declining as a result of the more widespread availability of the flu vaccine, the OTC (over-the-counter) cold and flu remedy market, including decongestants, has grown 10% over the past two years to a value of £198m in 2006, according to Mintel.

Cold and flu remedies account for two-thirds of the value of the total sector, while decongestant sales were up 26% between 2002 and 2006.

The sector's growth has been driven by product development and brand activity, which has targeted the premium market, focusing on maximum-strength and convenience products.

Consumers in this sector tend to put their faith in familiar brands: 88% of sales are of products from the leading manufacturers - Reckitt Benckiser, GlaxoSmithKline (GSK) and Pfizer.

These companies benefit from the fact that many purchases are driven by shoppers seeking a product to treat their ailment quickly, and are therefore more likely to stick with brands they trust.

'Brands that have a well-established heritage help promote confidence in a category where consumers have traditionally been more reliant on professional recommendation than self-selection,' says Julia Redman, brand manager of Vicks.

'We have found that price is not a purchase barrier - consumers want to stay healthy and are willing to spend money on products that will help them do this and that they trust,' she adds.

Indeed, the growth of the sector over the past few years has also been fuelled by the emergence of cold and flu prevention products such as Vicks First Defence, which claims to stop colds developing.

The Procter & Gamble product took the category in a fresh direction, claiming that if it was used at the first signs of a cold, it could shorten the duration of the illness by preventing the spread of the virus. P&G claims the nasal spray added £5m incremental value to the sector.

GSK is the leading cold and flu remedy manufacturer with its Beechams and Day and Night Nurse brands. Beechams is aimed at more moderate symptoms, while the Nurse products are intended for 12-hour relief when the condition is at its worst. Its most significant product development last year was the launch of its All in One pocket packs in November.

Reckitt Benckiser has grown significantly in this sector with its acquisition of Boots Healthcare International. The purchase has brought brands such as Nurofen Cold & Flu and Karvol, which is sold under the Crookes Healthcare brand, into the same stable as leading brand Lemsip. The latter was extended with four launches last year and given revamped packaging.

Pfizer has successfully extended its cough brand Benylin into this sector and last year invested £7m in the launch of Benylin Cold & Flu max strength sachets and capsules.

The 35- to 64-year-old working population is most likely to turn to this type of medication and ABC1s are more confident than DEs in self-treating flu. Men and young adults are most likely to go without treatment, while the over-65s often opt for old-fashioned remedies.

However, while the range of cold and flu products on the market has grown, many consumers still choose not to use any treatments. About one in four people do not treat their symptoms and of those who do self-treat, many do so with a general analgesic rather than a specific cold and flu remedy. There is therefore clear room for growth in the market.

As smokers suffer from more colds than non-smokers, though, the ban on smoking in public places may lead to a decline in smokers and therefore the number of colds they suffer.

Market growth

The sector's growth forecast of 24% for the five years to 2011 is bigger than the 14% seen in the previous five and the market is expected to be worth £228m by 2011, according to Mintel.

This is likely to be driven by the development of premium and value-added products such as maximum-strength medicines, convenience and anti-viral cold and flu prevention products. The greater affluence among consumers will support these premium products and contribute to total market growth.

COLD AND FLU REMEDIES AND DECONGESTANTS BY SALES AND MARKET SHARE

2006 2002 02-06
pounds m % pounds m % % chng
Cold and flu remedies 127 64 115 67 10.4
Decongestants 71 36 56 33 26.8
Total 198 100 171 100 15.7

Source: Mintel


COLD AND FLU REMEDY BRANDS BY SALES AND MARKETSHARE

2006 2002 02-06
pounds m % pounds m % % chng
1 Lemsip 43.0 35 41.0 36 4.8
2 Night/Day Nurse 35.0 29 32.5 28 7.7
3 Beechams 16.0 13 14.5 13 10.3
4 Sudafed 6.0 5 5.6 5 7.1
5= Nurofen Cold & Flu 4.0 3 4.0 4 0
5= Benylin Day & Night/ 4.0 3 2.8 2 42.9
Benylin 4 Flu
5= Boots Cold and Flu Treatments 4.0 3 4.1 4 -2.4

Source: Mintel


COMPLAINTS SUFFERED FROM IN THE PAST 12 MONTHS (% of respondents)

2006 2004 2002
Colds 60.3 61.0 59.3
Flu 17.3 19.5 21.2
Sinus 15.2 16.8 15.3
Catarrh 16.4 18.1 17.4
Stuffy nose 35.0 38.3 35.8

Source: GB TGI, BMRB Summer 2002 & 2004 & Quarter 3 2006/Mintel
Base: 25,000 adults aged 15+


ATTITUDES TOWARD COLD AND FLU REMEDIES JULY 2006 (% of respondents)

I tend to get a cold or flu 36
at least once every year
I'll ignore it until it goes naturally 29
I take a general painkiller 24
I take a remedy designed for colds 20
I always seem to get a cold 13
or flu if people around me have it
I always take the same brand/product 13
I go to my GP 10
I go to the chemist and ask advice 10
I never get a cold or flu 8
I get medication the next time 4
I'm doing a big shop
If the brand I want is not there, I'll 3
shop elsewhere rather than buy another

Source: BMRB/Mintel
Base: 1040 adults aged 15+

ANALYST COMMENT - SARAH PHILLIPS EUROPEAN HEALTHCARE DIRECTOR, RESEARCH INTERNATIONAL

With general health and wellness higher than ever on consumers' agendas, you would expect the cold and flu remedies market to be booming. And it is - up 18% over the past five years. But this success is perhaps less stable than it looks. Colds are ailments with a particularly high level of non-treatment at 26%, and while flu is more serious, its incidence is falling as consumers opt for vaccination.

One consequence of consumers adopting a health agenda may be that minor ailments, such as colds, are seen as personal failures. Individuals may prefer to battle through a cold rather than admit they have one, perhaps by increasing their consumption of fruit and vegetables rather than resorting to medication. It is notable that many consumers prefer to use analgesics rather than specific remedies - another sign that colds are not seen as serious enough by many to merit their own remedies.

Prevention rather than cure may be a better way to reach these consumers - 45% are proactive in their approach to health, and new products such as Vicks First Defence nasal spray and Kleenex anti-viral tissues are already targeting them.

Another possibility is to align pharmaceutical brands with established remedies, tapping the consumer desire for authenticity now driving almost every sector. Trusted brands could offer hot toddies or herbal remedies.

The trend toward functional foods could work in remedy brands' favour too: there is already a tea in Argentina with cold-prevention ingredients.

Emphasis on these areas wouldn't just broaden brands' product base, it would reinforce their image as a caring friend, not simply a quick fix.