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OTC Pediatrics - US - August 2012

The OTC pediatrics category has estimated total U.S. 2012 sales of $1.4 billion with an increase of 7.5% versus a year ago. As impressive at that figure is, it would undoubtedly be even larger if not for a number of recalls in recent years from high-profile companies such as Johnson & Johnson. Any type of recall can be a cause for concern, but when it involves products where the end user is a child, it can test a parent’s confidence in a product and ultimately their brand loyalty. That being said, there are other market factors that will influence the future performance of OTC pediatrics. As the healthcare debate rages on in this country with some uncertainty as to how it will ultimately be decided, consumers will likely be responsible for more effectively managing their healthcare. It is quite possible that this will lead to more use of OTC pediatrics, as families with children are typically on a tighter budget and may be reluctant to make a doctor visit unless it is absolutely necessary. When dealing with minor ailments, OTC pediatrics may indeed suffice.

Given the size of the category, it is clear that OTC pediatrics is an important market to both manufacturers and retailers. With this in mind, Mintel has taken an in-depth look at the category to examine the factors that have the greatest potential to both negatively and positively impact it. Among the critical topics examined in this report are:

  • What market drivers are likely to have the greatest impact, and what can manufacturers and retailers do to effectively manage challenges and maximize opportunities?
  • What do purchasers of OTC pediatrics consider to be the most important factors when making a purchase decision? In general, what is their attitude toward private label given the troubles that some name brand manufacturers have had in terms of quality control?
  • Which segments have been performing best, and which ones have been holding the category back? Who are the top brands and what are they doing to stay on top?
  • Which retail channels are conducive to the sale and merchandising of OTC pediatrics? How have the various store formats been performing of late, and what if anything can be done to operate more effectively?
  • What are some of the leading brands doing in terms of marketing strategies, and what lessons can other marketers learn from them? What role, if any, do emerging marketing tools such as Facebook and YouTube play in trying to connect with key target audiences?
  • How much of a role do demographic factors (e.g., age, household income, gender, and race) have on consumers’ buying habits?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market
                            • Figure 1: Total U.S. retail sales and fan chart forecast of OTC pediatrics, 2007-17
                          • Market factors
                            • Children’s population trends points to more concentrated target audience
                              • Figure 2: Households by presence of children, 2001-11
                              • Figure 3: Population of children under age 14, by age, 2007-17
                            • Large number of uninsured children favors OTC medications
                              • Centers for Disease Control and Prevention Childhood Health Statistics
                                • Hispanics high in OTC children’s medicines usage
                                  • Figure 4: U.S. population by race and Hispanic origin, 2007-17
                                  • Figure 5: Population of households with children, by race and Hispanic origin of householder, 2011
                                • Retail channels
                                  • “Other” retail channels largest; drug stores fastest growing
                                    • Figure 6: Sales of OTC pediatrics, by channel, 2011 and 2012
                                  • Market leaders
                                    • Johnson & Johnson moves down the list as other brands take over
                                      • Figure 7: Manufacturer FDMx market share of OTC pediatrics, 2011 and 2012
                                    • The consumer
                                      • Parents interested in fast-acting, long-lasting, easy-to-take attributes
                                        • Figure 8: Importance of product qualities in selecting children's remedies, April 2012
                                      • Underlying consumer attitudes create foundation for OTC market
                                        • Figure 9: Attitudes toward children's remedies, April 2012
                                      • What we think
                                      • Issues in the Market

                                          • How will the Johnson & Johnson brand recover from a series of recalls?
                                            • How can brands encourage use in a category based on need, rather than want?
                                              • What impact will changes to healthcare coverage have on the OTC pediatrics market?
                                                • What role do marketing tools such as Facebook and YouTube play in connecting with key target audiences?
                                                • Insights and Opportunities

                                                  • Expand isotonics into baby electrolytes
                                                    • Innovation could spur category growth
                                                      • Growth of retail medical clinics increases sales opportunities
                                                      • Trend Applications

                                                          • Trend: Suite Life
                                                            • Trend: Factory Fear
                                                              • 2015 Trend: East Meets West
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • OTC pediatrics climbs to new highs
                                                                    • Figure 10: Total U.S. retail sales and forecast of OTC pediatrics, at current prices, 2007-17
                                                                    • Figure 11: Total U.S. retail sales and forecast of OTC pediatrics, at inflation-adjusted prices, 2007-17
                                                                  • Fan chart forecast
                                                                      • Figure 12: Total U.S. sales and fan chart forecast of OTC pediatrics, at current prices, 2007-17
                                                                  • Market Drivers

                                                                    • Key points
                                                                      • Children’s population statistics present opportunity and challenge
                                                                        • Figure 13: Households by presence of children, 2001-11
                                                                        • Figure 14: Population by age, 2007-17
                                                                      • More than eight million uninsured children in America
                                                                        • Childhood health statistics
                                                                          • Hispanics biggest OTC children’s medicines users
                                                                            • Figure 15: U.S. population, by race and Hispanic origin, 2007-17
                                                                            • Figure 16: Households with children, by race and Hispanic origin of householder, 2011
                                                                        • Competitive Context

                                                                          • Key points
                                                                            • Private label have positive perception
                                                                              • Prescription medications favored over OTC
                                                                                • Food and beverages that tout functional benefits
                                                                                • Segment Performance

                                                                                  • Key points
                                                                                    • Category’s largest segments posting sales gains
                                                                                      • Sales of OTC pediatrics by segment
                                                                                        • Figure 17: Total U.S. sales of OTC pediatrics, segmented by type, 2011 and 2012
                                                                                    • Segment Performance—Cold/Cough/Flu/Allergy/Sinus Remedies

                                                                                      • Key points
                                                                                        • Segment continues upward trajectory
                                                                                          • Sales and forecast of cough/cold/flu/allergy/sinus remedies
                                                                                            • Figure 18: Total U.S. sales and forecast of cold/cough/flu/allergy/sinus remedies, at current prices, 2007-17
                                                                                        • Segment Performance—Vitamins

                                                                                          • Key points
                                                                                            • Vitamins growth streak continues
                                                                                              • Sales and forecast of vitamins
                                                                                                • Figure 19: Total U.S. sales and forecast of vitamins, at current prices, 2007-17
                                                                                            • Segment Performance—Baby Electrolytes

                                                                                              • Key points
                                                                                                • Baby electrolytes segment treading water
                                                                                                  • Sales and forecast of baby electrolytes
                                                                                                    • Figure 20: Total U.S. sales and forecast of baby electrolytes, at current prices, 2007-17
                                                                                                • Segment Performance—Internal Analgesics (Liquid/Tablet)

                                                                                                  • Key points
                                                                                                    • Tylenol recalls a pain for internal analgesics market
                                                                                                      • Sales and forecast of internal analgesics
                                                                                                        • Figure 21: Total U.S. sales and forecast of internal analgesics, at current prices, 2007-17
                                                                                                    • Segment Performance—Gastrointestinal/Stomach Remedies

                                                                                                      • Key points
                                                                                                        • Declining sales make manufacturers sick to their stomach
                                                                                                          • Sales and forecast of gastrointestinal/stomach remedies
                                                                                                            • Figure 22: Sales and forecast of gastrointestinal/stomach remedies, at current prices, 2007-17
                                                                                                        • Segment Performance—Miscellaneous Health Remedies

                                                                                                          • Key points
                                                                                                            • Segment could use another booster shot of growth
                                                                                                              • Sales and forecast of miscellaneous health remedies
                                                                                                                • Figure 23: Sales and forecast of miscellaneous health remedies, at current prices, 2007-17
                                                                                                            • Retail Channels

                                                                                                              • Key points
                                                                                                                • Consumers switching from ‘other’ channels
                                                                                                                  • Sales of OTC pediatrics by channel
                                                                                                                    • Figure 24: Sales of OTC pediatrics, by channel, 2011 and 2012
                                                                                                                • Retail Channels—Supermarkets

                                                                                                                  • Key points
                                                                                                                    • Supermarkets ringing up strong OTC pediatrics sales
                                                                                                                      • Supermarket sales of OTC pediatrics
                                                                                                                        • Figure 25: Supermarket sales of OTC pediatrics, at current prices, 2007-12
                                                                                                                    • Retail Channels—Drug Stores

                                                                                                                      • Key points
                                                                                                                        • Drug store sales of OTC pediatrics
                                                                                                                          • Drug store sales of OTC pediatrics
                                                                                                                            • Figure 26: Drug store sales of OTC pediatrics, at current prices, 2007-12
                                                                                                                        • Retail Channels—Other Channels

                                                                                                                          • Key points
                                                                                                                            • Other channels’ sales regressing
                                                                                                                              • Other channel sales of OTC pediatrics
                                                                                                                                • Figure 27: Other channel sales of OTC pediatrics, at current prices, 2007-12
                                                                                                                            • Leading Companies

                                                                                                                              • Key points
                                                                                                                                • Changes to the category created new brand leaders
                                                                                                                                  • Manufacturer sales of OTC pediatrics
                                                                                                                                    • Figure 28: Select manufacturer FDMx sales of OTC pediatrics, 2011 and 2012
                                                                                                                                • Brand Share—Cold/Cough/Flu/Allergy/Sinus Remedies

                                                                                                                                  • Key points
                                                                                                                                    • Allegra has the right prescription for sales growth
                                                                                                                                      • Manufacturer sales of cold/cough/flu/allergy/sinus remedies
                                                                                                                                        • Figure 29: Select manufacturer FDMx sales of cold/cough/flu/allergy/sinus remedies, 2011 and 2012
                                                                                                                                    • Brand Share—Vitamins

                                                                                                                                      • Key points
                                                                                                                                        • Popular vitamins are a cast of characters
                                                                                                                                          • Manufacturer sales of vitamins
                                                                                                                                            • Figure 30: Select manufacturer FDMx sales of vitamins, 2011 and 2012
                                                                                                                                        • Brand Share—Baby Electrolytes

                                                                                                                                          • Key points
                                                                                                                                            • Pedialyte extends market share lead
                                                                                                                                              • Manufacturer sales of baby electrolytes
                                                                                                                                                • Figure 31: Select manufacturer FDMx sales of baby electrolytes, 2011 and 2012
                                                                                                                                            • Brand Share—Internal Analgesics (Liquid/Tablet)

                                                                                                                                              • Key points
                                                                                                                                                • Other manufacturers take advantage of Johnson & Johnson’s missteps
                                                                                                                                                  • Manufacturer sales of internal analgesics (liquid/tablet)
                                                                                                                                                    • Figure 32: Select manufacturer FDMx sales of internal analgesics, 2011 and 2012
                                                                                                                                                • Brand Share—Gastrointestinal/Stomach Remedies

                                                                                                                                                  • Key points
                                                                                                                                                    • Fleet brands steam ahead with modest growth
                                                                                                                                                      • Manufacturer sales of gastrointestinal/stomach remedies
                                                                                                                                                        • Figure 33: Select manufacturer FDMx sales of gastrointestinal/stomach remedies, 2011 and 2012
                                                                                                                                                    • Brand Share—Miscellaneous Health Remedies

                                                                                                                                                      • Key points
                                                                                                                                                        • Baby Orajel able to sustain first place despite pain of sales decline
                                                                                                                                                          • Manufacturer sales of miscellaneous health remedies
                                                                                                                                                            • Figure 34: Select manufacturer sales of miscellaneous health remedies, 2011 and 2012
                                                                                                                                                        • Innovations and Innovators

                                                                                                                                                          • Key points
                                                                                                                                                            • Number of product introductions down from peak in 2008
                                                                                                                                                              • Figure 35: New product launches with “for children” claim, 2006-12
                                                                                                                                                            • Name brands represent largest portion of product launches
                                                                                                                                                              • Figure 36: Private label new product launches with “for children” claim, 2006-12
                                                                                                                                                            • Decongestive, cough, cold, and flu relief
                                                                                                                                                              • Vitamins and dietary supplements
                                                                                                                                                                • Pain relief
                                                                                                                                                                  • Miscellaneous health remedies
                                                                                                                                                                  • Marketing Strategies

                                                                                                                                                                    • Overview of the brand landscape
                                                                                                                                                                      • Brand analysis: Disney vitamins (NBTY, Inc.)
                                                                                                                                                                        • Figure 37: Disney Vitamins, “Vegetables,” August 2011-March 2012
                                                                                                                                                                        • Figure 38: Brand analysis of Disney Vitamins, 2012
                                                                                                                                                                      • Brand analysis: Allegra
                                                                                                                                                                        • Figure 39: Allegra, “The Allegra difference,” April- September 2011
                                                                                                                                                                        • Figure 40: Brand analysis of Allegra, 2012
                                                                                                                                                                      • Online initiatives
                                                                                                                                                                        • Brand analysis: PediaCare
                                                                                                                                                                          • Figure 41: PediaCare, “The Giggles,” August-December 2011
                                                                                                                                                                          • Figure 42: Brand analysis of PediaCare, 2012
                                                                                                                                                                        • Online initiatives
                                                                                                                                                                          • Brand analysis: Triaminic
                                                                                                                                                                            • Figure 43: Triaminic, “Round Table Discussion,” November-December 2010
                                                                                                                                                                            • Figure 44: Brand analysis of Triaminic, 2012
                                                                                                                                                                          • Online initiatives
                                                                                                                                                                            • Brand analysis: Tylenol
                                                                                                                                                                              • Figure 45: Tylenol, “My Sunshine,” March-May 2012
                                                                                                                                                                              • Figure 46: Brand analysis of Tylenol, 2012
                                                                                                                                                                            • Online initiatives
                                                                                                                                                                              • Brand analysis: Zarbee’s
                                                                                                                                                                                • Figure 47: Zarbee’s, “Safe,” January 2011
                                                                                                                                                                                • Figure 48: Brand analysis of Zarbee’s, 2012
                                                                                                                                                                              • Online initiatives
                                                                                                                                                                              • Ailments Experienced

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Incidence of illness very common among young children
                                                                                                                                                                                    • Figure 49: Ailments experienced in past 12 months, by age of child, April 2012
                                                                                                                                                                                    • Figure 50: Ailments experienced in past 12 months, by region, April 2012
                                                                                                                                                                                  • Parents of flu sufferers seek a variety of treatments
                                                                                                                                                                                    • Figure 51: OTC medicines used in past 12 months, by ailments experienced in past 12 months, April 2012
                                                                                                                                                                                    • Figure 52: OTC medicines used in past 12 months, by ailments experienced in past 12 months, April 2012
                                                                                                                                                                                • OTC Medicine Product Purchase and Usage

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Men and women favor slightly different medication formats
                                                                                                                                                                                      • Figure 53: OTC medicines used in past 12 months, by gender, April 2012
                                                                                                                                                                                    • Purchase habits differ by age of parent
                                                                                                                                                                                      • Figure 54: OTC medicines used in past 12 months, by age, April 2012
                                                                                                                                                                                    • Presence of older children encourages OTC purchase behavior
                                                                                                                                                                                      • Figure 55: OTC medicines used in past 12 months, by age of children, April 2012
                                                                                                                                                                                    • Liquid the most popular form of children’s medications
                                                                                                                                                                                      • Figure 56: Types of children's fever reducers and pain relievers/children’s cough/cold products used, October 2010-November 2011
                                                                                                                                                                                    • Only one fourth of parents using homeopathic or herbal remedies
                                                                                                                                                                                      • Figure 57: Homeopathic and herbal remedies usage, April 2012
                                                                                                                                                                                      • Figure 58: Homeopathic and herbal remedies usage, by ailments experienced in past 12 months, April 2012
                                                                                                                                                                                  • OTC Product Quality and Concerns

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Products that work fast and longest appeal to parents
                                                                                                                                                                                        • Figure 59: Importance of product qualities in selecting children's remedies, April 2012
                                                                                                                                                                                        • Figure 60: Importance of product qualities in selecting children's remedies, by gender, April 2012
                                                                                                                                                                                      • Importance in product attributes generate similar responses across parents’ ages
                                                                                                                                                                                        • Figure 61: Importance of product qualities in selecting children's remedies, by age, April 2012
                                                                                                                                                                                      • Children’s ages influence importance of specific product attributes
                                                                                                                                                                                        • Figure 62: Importance of product qualities in selecting children's remedies, by age of children, April 2012
                                                                                                                                                                                    • OTC Pediatric Brands

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Men are more likely than women to be brand loyal
                                                                                                                                                                                          • Figure 63: Brand selection, by gender, April 2012
                                                                                                                                                                                        • Income’s impact on brand selection
                                                                                                                                                                                          • Figure 64: Brand selection, by household income, April 2012
                                                                                                                                                                                        • Older children’s parents tend to be more brand loyal
                                                                                                                                                                                          • Figure 65: Brand selection, by age of children, April 2012
                                                                                                                                                                                        • More competition in children’s cough/cold segment
                                                                                                                                                                                          • Figure 66: Brands of children's cough/cold products used, by household income, October 2010-November 2011
                                                                                                                                                                                        • Power of licensing evident in children’s vitamins segment
                                                                                                                                                                                          • Figure 67: Brands of children's vitamins used, by household income, October 2010-November 2011
                                                                                                                                                                                        • Children’s Tylenol top pain reliever brand
                                                                                                                                                                                          • Figure 68: Brands of children's fever reducers and pain relievers used, October 2010-November 2011
                                                                                                                                                                                      • Attitudes Toward Children’s Remedies

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Private label OTC remedies considered a viable option
                                                                                                                                                                                              • Figure 69: Attitudes toward children's remedies, April 2012
                                                                                                                                                                                            • Gender an influence when it comes to product preferences
                                                                                                                                                                                              • Figure 70: Attitudes toward children's remedies, by gender, April 2012
                                                                                                                                                                                            • Younger parents feel more strongly about children’s remedies
                                                                                                                                                                                              • Figure 71: Attitudes toward children's remedies, by age, April 2012
                                                                                                                                                                                            • Parents of older children to back private label
                                                                                                                                                                                              • Figure 72: Attitudes toward children's remedies, by age of children, April 2012
                                                                                                                                                                                          • Information Sources

                                                                                                                                                                                            • Key points
                                                                                                                                                                                              • Doctors are ‘in’ for parents seeking OTC medicinal information
                                                                                                                                                                                                • Figure 73: Sources turned to for information on children's remedies, April 2012
                                                                                                                                                                                            • Johnson & Johnson Recalls

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Majority of target audience aware of Tylenol recalls
                                                                                                                                                                                                  • Figure 74: Awareness of Tylenol recalls, by gender, April 2012
                                                                                                                                                                                                • Many of Tylenol’s customers have stuck with the brand
                                                                                                                                                                                                  • Figure 75: Impact of Tylenol recalls on product selection, by gender, April 2012
                                                                                                                                                                                                • Younger parents least likely to stick with Tylenol
                                                                                                                                                                                                  • Figure 76: Impact of Tylenol recalls on product selection, by age, April 2012
                                                                                                                                                                                              • Race and Hispanic Origin

                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Hispanics purchase OTC pediatrics
                                                                                                                                                                                                    • Figure 77: OTC medicines used in past 12 months, by race/Hispanic origin, April 2012
                                                                                                                                                                                                  • Asians biggest vitamin users
                                                                                                                                                                                                    • Figure 78: Children's vitamin usage, by race/Hispanic origin, October 2010-November 2011
                                                                                                                                                                                                  • Hispanics more likely to be concerned about product attributes
                                                                                                                                                                                                      • Figure 79: Importance of product qualities in selecting children's remedies, by race/Hispanic origin, April 2012
                                                                                                                                                                                                    • Hispanics more likely than non-Hispanics to be brand loyal
                                                                                                                                                                                                      • Figure 80: Brand selection, by Hispanic origin, April 2012
                                                                                                                                                                                                    • Children’s Tylenol top fever reducer and pain reliever
                                                                                                                                                                                                      • Figure 81: Brands of children's fever reducers and pain relievers used, by race/Hispanic origin, October 2010-November 2011
                                                                                                                                                                                                    • White respondents biggest supporters of private label
                                                                                                                                                                                                      • Figure 82: Attitudes toward children's remedies, by race/Hispanic origin, April 2012
                                                                                                                                                                                                  • Cluster Analysis

                                                                                                                                                                                                      • Figure 83: Target groups, April 2012
                                                                                                                                                                                                    • Cluster 1: Confident OTC Consumers
                                                                                                                                                                                                      • Demographics
                                                                                                                                                                                                        • Characteristics
                                                                                                                                                                                                          • Opportunity
                                                                                                                                                                                                            • Cluster 2: Overwhelmed and Uncertain
                                                                                                                                                                                                              • Demographics
                                                                                                                                                                                                                • Characteristics
                                                                                                                                                                                                                  • Opportunity
                                                                                                                                                                                                                    • Cluster 3: Brand Loyalists
                                                                                                                                                                                                                      • Demographics
                                                                                                                                                                                                                        • Characteristics
                                                                                                                                                                                                                          • Opportunity
                                                                                                                                                                                                                            • Cluster characteristic tables
                                                                                                                                                                                                                              • Figure 84: Importance of product qualities in selecting children's remedies, by target groups, April 2012
                                                                                                                                                                                                                              • Figure 85: Brand selection, by target groups, April 2012
                                                                                                                                                                                                                              • Figure 86: Attitudes toward children's remedies, by target groups, April 2012
                                                                                                                                                                                                                            • Cluster demographic tables
                                                                                                                                                                                                                              • Figure 87: Target groups, by demographic, April 2012
                                                                                                                                                                                                                            • Cluster methodology
                                                                                                                                                                                                                            • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                                                                • Figure 88: OTC medicines used in past 12 months by, household income, April 2012
                                                                                                                                                                                                                                • Figure 89: Importance of product qualities in selecting children's remedies, by household income, April 2012
                                                                                                                                                                                                                                • Figure 90: Attitudes toward children's remedies, by household income, April 2012
                                                                                                                                                                                                                                • Figure 91: Awareness of Tylenol recalls, by household income, April 2012
                                                                                                                                                                                                                                • Figure 92: Impact of Tylenol recalls on product selection, by age of children, April 2012
                                                                                                                                                                                                                                • Figure 93: Homeopathic and herbal remedies usage by age of child, by ailments experienced in past 12 months by age of child, April 2012
                                                                                                                                                                                                                            • Appendix: Trade Associations

                                                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                                                              • Abbott Laboratories
                                                                                                                                                                                                                              • Ambulatory Pediatrics Association (APA)
                                                                                                                                                                                                                              • Bayer AG
                                                                                                                                                                                                                              • Bristol-Myers Squibb Company
                                                                                                                                                                                                                              • Chattem, Inc.
                                                                                                                                                                                                                              • Church & Dwight Co. Inc
                                                                                                                                                                                                                              • Food and Drug Administration
                                                                                                                                                                                                                              • Johnson & Johnson
                                                                                                                                                                                                                              • NBTY
                                                                                                                                                                                                                              • Novartis AG
                                                                                                                                                                                                                              • Pfizer Inc
                                                                                                                                                                                                                              • Reckitt Benckiser USA

                                                                                                                                                                                                                              OTC Pediatrics - US - August 2012

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