Merck’s Consumer Health division has demonstrated significant growth in 2014 via innovations in its existing product portfolio, success in consumerizing new brands and in extending its geographical reach.
Under the leadership of President and CEO Uta Kemmerich-Keil, the Consumer Health division is pursuing a ‘3x3’ strategy of establishing a minimum of 3% market share and at least 3 strong brands per key market. This strategy is being executed via a focus on existing brands, new brands as acquired or allocated, and geographic expansion into emerging markets with significant growth potential. ‘3x3’ has enabled the Consumer Health division to remain the fastest growing division at Merck, as demonstrated by recently published Q2/2014 performance figures.
Commenting on the performance, Uta Kemmerich-Keil said: “This year has seen consistent and sustained growth at Merck’s Consumer Health division across both our existing portfolio and via the newly allocated brands incorporated since the start of 2014. Through geographical expansion in fast growing emerging markets and a relentless focus on product innovation excellence, we are proud to remain the fastest growing division at Merck. The division remains committed to implementing the ‘3x3’ strategy which has delivered significant results to date and which will remain the cornerstone of our business strategy moving ahead.”
Organic growth
A key driver of success has been the focus on evolving existing brands to meet patient expectations through innovative product development approaches. This year in Germany, for example, Merck’s Consumer Health division has extended its Nasivin® brand through the launch of Mentholfresh – a new formulation of the product designed to deliver a menthol kick. The evolution of this product has resulted in 90% consumers reporting that the new product is highly effective.
In France, Merck Consumer Health has responded to evolving consumer needs by developing Bion® ‘Equilibre’, a product which has been developed to meet the growing demand for magnesium supplements. Launched in September 2014, Bion Equilibre was developed through a scientific approach which combined magnesium complex with a bioactive ingredient, TriBion® and vitamins, specifically designed to combat tiredness and fight stress.
In the UK, Merck Consumer Health has revitalized its Seven Seas® nutritional supplement to focus on the gender specific needs of older consumers interested in staying fit and healthy through products which meet their needs. Under the concept of ‘Perfect 7’, Merck is successfully telling the story of how its products can slow down the ageing process in 7 ways, with specific benefits to both men and women.
Inorganic growth
The division has not only seamlessly integrated the two new brands Neurobion® and Floratil® which joined the Consumer Health portfolio from the Merck Serono division as of January 2014, but it has already successfully started consumerizing those. So, the business is now moving on from embracing the inorganic growth through the shift of both brands to generating incremental organic growth on both franchises.
A successful example comes from Indonesia where Merck’s Consumer Health division worked with the Indonesian Neurologist Association to highlight the health risks posed by nerve damage. The project focused on raising public awareness, especially with the under 30-year old consumers, and looked at how neurotropic vitamins can repair damaged nerve cells. This activity supported the excellent performance of Neurobion and cemented its position as a market leader in the sector in Indonesia.
The transformation of the Consumer Health division in Brazil, with the integration and beginning consumerization of the Neurobion and Floratil brands, already delivered positive results in 2014 through three key pillars: First, Merck’s OTC brands considerably gained visibility in 6,200 Brazilian drugstores and pharmacies, thanks to an important point of sales activation exercise, where the training of clerks and brands presence enhancement played a pivotal role.
In addition, the full dedication of medical detailing teams to Consumer Health brands significantly improved the delivery of the Neurobion and Floratil brands to physicians. Finally, the national roll-out of an appealing Floratil TV Commercial, successfully aired in the North of the country since Q3 of 2013, drove up Floratil sales up to +42% vs. 2013 (YTD), simultaneously offering a new brand positioning to consumers.
Geographic expansion
Also in Brazil, Merck’s Consumer Health division launched in August 2014 its Bion 3® brand – a probiotic multivitamin product which occupies a leadership position in other key markets including Chile, Belgium and France. The launch illustrates the importance of the third pillar of the ‘3x3’ strategy, in expanding the division’s footprint in key emerging markets through established, leading products. In conjunction with the organic growth efforts on existing brands like Cebion® and the integration and consumerization of Neurobion and Floratil, the Bion 3 launch makes Brazil – one of the most important emerging OTC markets globally – a role model for applying the Consumer Health ‘3x3’ strategy.
Consumer Health remains Merck’s fastest growing division
In the second quarter of 2014, the Consumer Health division reported healthy organic growth of 8.5% (countered by negative currency impacts of -5.2%) to € 184.7 million over the same period in 2013. Key brands driving this growth include Neurobion across regions and Femibion® in Germany. The second quarter of 2014 also demonstrated a profit (EBITDA pre one-time items) increase of 16.7% to € 41.4 million versus € 35.5 million for the same period one year ago.
About Merck’s Consumer Health Division
Brands of Merck’s Consumer Health division, such as Neurobion®, Floratil®, Bion®, Nasivin®, Seven Seas®, Femibion®, Kytta®, Sangobion®, Sedalmerck®, and Cebion®, are innovative leaders in key markets, backed by science and trusted by consumers worldwide. The division Consumer Health is with its around 2,000 employees globally active in over 40 markets. Since 2014, the portfolio comprises of brands with annual total sales of over $ 1 billion. Consumer Health is a division of the Merck Group with global headquarters in Darmstadt, Germany.
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About Merck
Merck is a leading company for innovative and top-quality high-tech products in the pharmaceutical and chemical sectors. Around 39,000 employees work in 66 countries to improve the quality of life for patients, to further the success of our customers and to help meet global challenges. We generated total revenues of € 11.1 billion in 2013 with our four divisions: Merck Serono, Consumer Health, Performance Materials and Merck Millipore.
Merck is the world´s oldest pharmaceutical and chemical company. Since 1668 our name has stood for innovation, business success and responsible entrepreneurship. The founding family remains the majority owner of the company to this day. We are Merck, the original, and hold the global rights to the Merck name and brand. The only exceptions are Canada and the United States, where we are known as EMD.
Source: Merck
