By Sharon Terlep
Americans' growing fixation on self-care has them spending
billions to treat conditions from insomnia to itchy skin without
doctors or prescription drugs. Now Procter & Gamble Co. is
trying to seize on the trend.
The maker of Pampers diapers and Gillette razors, a decade after
getting out of the drug business, is making a push into wellness
and self-care -- growing pockets of the health-care industry --
with products such as vitamins and supplements, nonprescription
sleep aids and all-natural menopause treatments.
"People are more curious and taking their health into their own
hands, which is definitely a change from what was the norm," said
HongJoo Sun, chief executive of Kindra, a line of hormone-free
lotions and supplements designed to ease symptoms of menopause. The
brand, which was launched online Thursday, is the first product of
a pairing between P&G's venture arm and M13, a venture-capital
firm. Developed by P&G, it is a small piece of the
consumer-goods giant's plan to enlarge its health-care unit, which
includes expanding a portfolio of brands acquired this year from
Merck KGaA of Germany.
"It's not uncommon now for even a young person to have a pill
box that they whip out in the open that has a combination of things
they're taking to help their hair, their face," Ms. Sun said.
Consumers are increasingly drawn to finding their own health
solutions in vitamins, supplements and natural treatments, as
traditional medical care becomes more expensive and interest grows
in chemical-free remedies. Alternative medicine isn't new but has
become increasingly mainstream as both higher-end retailers such as
Whole Foods and mass-market chains from drugstores to big-box
retailers push the products.
Retailers have been stocking up on what are known as wellness
products, while companies -- from startups to established firms --
pump out new products.
Globally, consumers in 2017 spent close to $1.8 trillion on a
range of wellness-related categories, including personal care,
beauty, anti-aging, healthy eating, nutrition and weight loss -- a
roughly 4% increase from two years earlier, according to the Global
Wellness Institute, an industry research nonprofit.
P&G's rivals have dipped into wellness. Clorox Co. last year
acquired dietary-supplements company Nutranext. Unilever PLC, maker
of Hellmann's mayonnaise and Dove soap, this year agreed to acquire
OLLY Nutrition, with products such as vitamins and protein
bars.
P&G, having recently reversed a decadelong sales slump,
considers health-care to be a key part of its strategy to maintain
growth and improve profitability. And it is adding health-related
products after offloading other businesses in recent years,
including dozens of beauty brands.
P&G finance chief Jon Moeller said self-care is an
attractive area because the products are relatively high-margin and
used daily by consumers. He added that the business is likely to
grow as the population ages and as Americans look for alternatives
to traditional medicine as they foot more of their own health-care
costs.
Wall Street isn't yet convinced the efforts will take off in a
big way. Bernstein estimates that P&G's health-care business
will grow more than 20% over the next three years, but will account
for 13% of sales, up from 12% today.
A year ago, P&G's health-care presence included
over-the-counter products such as cold treatments Vicks and NyQuil,
dental brands Crest and OralB, and a 51% share in a joint venture
with Teva Pharmaceuticals Industries Ltd. that sold
over-the-counter medicines, vitamins and supplements outside North
America.
P&G this spring paid $4.2 billion to acquire the
consumer-health business from Germany's Merck, adding vitamins and
food supplements while dissolving the Teva joint venture.
The deal came after P&G had discussions with Pfizer Inc. to
acquire its consumer health-care business. The Pfizer talks ended
without a deal, and the business -- which includes Advil pain
medicine and ChapStick lip balm -- was combined into a joint
venture with drugmaker GlaxoSmithKline PLC.
Mr. Moeller said P&G could eventually sell the Merck brands,
which include Femibion supplements for women, Seven Seas cod liver
oil and Nasivin nasal decongestant, in the U.S. They are currently
sold in 40 international markets.
Meanwhile, the company is working to develop products that aid
in do-it-yourself health care. This summer, P&G launched
ZzzQuil, a variation of NyQuil cold medicine, which causes
drowsiness but isn't intended to be used as a sleep aid. Mr.
Moeller said the company realized many people, eschewing
prescription sleep aids, were using NyQuil to sleep. ZzzQuil is an
antihistamine, contained in many allergy medicines, but it doesn't
include a cough suppressant. P&G also now sells a melatonin
supplement to aid in sleep under the same name.
The joint venture that launched Kindra, the menopause treatment,
also is developing Bodewell, a steroid-free treatment for skin
problems such as psoriasis and eczema.
Under that partnership, M13, the venture firm, takes on products
acquired or developed by P&G. If the business meets certain
profitability and revenue targets, P&G buys it back at a preset
premium.
Kindra's Ms. Sun said the brand changed its name from P&G's
original Pepper & Wits label to come across as less medical and
more relatable as women seek treatments outside of conventional
medicine.
"People are educating themselves more," she said.
(END) Dow Jones Newswires
November 18, 2019 08:54 ET (13:54 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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