Increased demand globally for immunity boosting products against the backdrop of the COVID-19 pandemic saw sales at Bayer Consumer Health’s Nutritionals category leap ahead by a third in the first quarter.
Sales of Nutritionals – which Bayer defines as multivitamins and dietary supplements – advanced by 32% to €351m ($382m) in the opening three months of 2020 as turnover from the products rose across all four of Bayer’s reporting regions.
In particular, Bayer said double-digit gains for Nutritionals in Asia Pacific and Latin America had been the biggest growth contributors to group Consumer Health sales, which advanced by 13.5% adjusted for currency and portfolio effects to €1.4bn. As reported, Consumer Health sales edged up by 0.2% due to divestments.
“Significant increases” in demand for in Nutritionals had also been recorded in Europe, Bayer noted, with business also up in North America, thanks to higher sales of the One A Day vitamin range.
Bayer Consumer Health head Heiko Schipper said the rise in Nutritional sales was due to an increase in consumption rather than just stockpiling. COVID-19 had triggered a habit change in dietary supplement use among consumers, he suggested. “I think we know it ourselves, we take more of those [products] in these days,” Schipper noted.
Nutritionals was not the only Consumer Health segment to receive a boost from COVID-19 in Q1, with Bayer’s Pain & Cardio and Allergy & Cold categories also posting double-digit rises.
Bayer's Consumer Health Sales In Q1 By Category
|Allergy & Cold
|Pain & Cardio
|Total Consumer Health
*Other category includes the divested sun care, prescription dermatology (outside the U.S.) and foot care businesses
Allergy & Cold sales advanced by 16.5% to €361m, driven by “substantial” increased demand in the US, particularly for Claritin, while turnover from Pain & Cardio brands jumped by 17.6% to €214m.
It was “too early to say” the proportion of these gains linked to consumption rather than inventory build, Schipper admitted. “This is the million-dollar question,” he noted. “We are very closely monitoring that with consumers and customers.”
Consumers were definitely looking to “act immediately on the first cough that they have,” Schipper said, as they “really want to avoid just getting sick because they don't want to end up at the doctor or at the hospital.”
With demand for consumer health products substantially increasing as the COVID-19 pandemic began to take hold globally in March, Bayer said the company's global supply chain had enabled it to respond very flexibly to significantly higher volumes and shifts in the product mix. Only in China had the company faced some supply disruption in connection with COVID-19, Bayer noted.
Looking at Consumer Health’s Q1 performance on a regional basis, sales in North America increased by 13.7% to €583m, thanks largely to the gains for Claritin and One-A-Day.
Europe/Middle East/Africa turnover advanced by 14.3% to €490m, thanks to increases for all Nutritionals brands sold in the region, plus growth recorded by the Bepanthen skin-care line in Germany and the Middle East.
Asia/Pacific sales moved forward by 6.1% to €192m, driven by Nutritionals, while turnover in Latin America jumped by 22.3% to €133m, due to supplement sales, particularly in Brazil, Mexico and Ecuador.
Turning to earnings, Bayer said Consumer Health’s EBITDA before special items had increased by 3.8% to €301m, as a result of the substantial rise in sales and a positive effect from efficiency measures introduced in 2018. Divestments and higher marketing expenses had weighed on earnings in Q1, the firm noted.