Bayer’s Innovation Engine Shifts Up A Gear To Propel Turnaround
Executive Summary
Bayer stepped up its Consumer Health innovation efforts in 2020 in line with its turnaround plan for the business, and now has more than 100 projects in development.
Bayer Consumer Health ramped up its R&D activities in 2020 in line with business head Heiko Schipper’s plan to address a historically low level of innovation.
Having developed 53 new consumer-validated product innovations in 2020, Bayer exceeded its own target and smashed the 2019 total of 30 new concepts. The firm achieved this significant uptick in output while keeping funding levels stable, Bayer’s annual report shows, with the ratio of R&D expenses to consumer health sales at 3.8%. This was slightly down on the 3.9% recorded in 2019.
According to Bayer, key US launches in 2020 included four line extensions for One A Day vitamins, including an immunity booster and easy to swallow option, and the introduction of Claritin Cool Mint Chewables, which the firms says relieves allergy symptoms while also providing an “immediate blast of cooling sensation you can feel in your throat.” (Also see "Bayer Sees Positive Consumer Change From COVID-19 Despite Slowing Sales" - HBW Insight, 5 Aug, 2020.)
In Europe, Bayer launched the first ever extension to its Iberogast herbal GI line in Germany in the form of Iberogast Advance, and extended its wound-healing and skincare range by introducing in Italy, Spain and the UK Bepanthen Tattoo. (Also see "Bayer Germany Reverse-Switches Phytohustil, Expands Iberogast" - HBW Insight, 28 Jul, 2020.)
In the Asia/Pacific region, Bayer took its established Elevit prenatal vitamins into the fast-growing probiotics and omega 3 categories, with the launches of Elevit DHA and Elevit Probiotics.
In line with its drive to develop insight-driven products aligned to unmet consumer needs, Bayer established in 2020 a new Consumer Health function: Regulatory, Medical, Safety & Compliance (RMSC). Led by Abbie Lennox – a former head of regulatory strategy at RB who joined Bayer in 2019 – the RMSC will further strengthen Bayer’s commitment to science to address medical needs and compliance across innovations, the firm says.
Over 100 Projects In Development
Backed by the work of the RMSC and a global network of R&D facilities across Asia, Europe and North America, Bayer Consumer Health’s innovation pipeline is in a healthy state at the start of 2021, with more than 110 active projects under development across categories including, pain, cardiovascular risk prevention, dermatology, nutritional supplements, digestive health, allergy and cough & cold.
These projects include core innovations – which Bayer defines as optimizing existing products for existing customers – and adjacent innovations, covering the extension of existing brands into new market segments. Transformational innovations – “achieving breakthroughs and creating new markets that do not yet exist” – are also in development.
The report does not indicate whether these active innovation projects include Rx-to-OTC switches, but does note that transitioning prescription medicines that are suitable for self-care to OTC status is an “important part of our innovation strategy.”
In addition to its in-house innovation projects, Bayer is also working with external partners to “discover new sources of growth.”
By acquiring a majority stake in personalized nutrition company Care/of last year, Bayer says it has strengthened its ability to provide individual tailored solutions to consumers. Care/of claims to help consumers build a daily routine of taking nutritional supplements specially tailored to their needs. (Also see "Bayer ‘Outperforming’ Market As Turnaround Plan Bears Fruit" - HBW Insight, 4 Nov, 2020.)
Separately, Bayer is stepping up its collaboration with medical dermatology company Azitra Inc. to advance the development of consumer health products that harness the human skin microbiome. The firm is helping to support Azitra’s development of cutting-edge skin products using engineered and wild-type bacteria for new OTC and cosmetic products. (Also see "Bayer Steps Up Skin Microbiome Research For Cosmetics With Partner Azitra" - HBW Insight, 20 Oct, 2020.)
Bayer’s R&D efforts in 2020 were in line with its goal to double the contribution from innovation to Consumer Health’s total growth by 2022, up from 15% in 2018 to around 30%. (Also see "Bayer's Consumer Chief Initiates Turnaround Plan In Bid To Return Troubled Business To Growth" - HBW Insight, 17 Dec, 2018.)