Sleep Aids in the Philippines

Euromonitor International
September 2021
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LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2021 DEVELOPMENTS ............................................................................................................... 1
Demand for Melatonin as A COVID-19 therapy increases due to government support ............ 1
Slower growth in 2021 as economic pressures and financial distress diminish ........................ 1
More diverse products emerge as consumers look for more than just sleep aids .................... 2
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
More brands to enter sleep aids as competition intensifies ...................................................... 2
Diversification in terms of delivery formats set to widen consumer choice ............................... 2
The primacy of the BPO industry and the prevalence of shift work to support sales ................ 3
CATEGORY DATA ....................................................................................................................... 3
Table 1 Sales of Sleep Aids: Value 2016-2021 ......................................................... 3
Table 2 Sales of Sleep Aids: % Value Growth 2016-2021 ........................................ 3
Table 3 NBO Company Shares of Sleep Aids: % Value 2017-2021 ......................... 4
Table 4 LBN Brand Shares of Sleep Aids: % Value 2018-2021 ................................ 4
Table 5 Forecast Sales of Sleep Aids: Value 2021-2026 .......................................... 4
Table 6 Forecast Sales of Sleep Aids: % Value Growth 2021-2026 ......................... 5

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SLEEP AIDS IN THE PHILIPPINES

KEY DATA FINDINGS
▪ Sleep aids records strong growth again in 2021 as many consumers look to melatonin-based
products, among other types of sleep aids, to help them overcome the sleep disruption that is
a common symptom of COVID-19
▪ Sleep aids records 14% current value growth in 2021 as sales hit PHP275 million
▪ UHS Essential Health Philippines Inc leads sleep aids in 2021 with a 28% value share, ahead
of Organica Neutraceuticals Inc and Trianon International Inc, each with 16% of category
value sales
▪ The forecast period is set to see sleep aids register a current value CAGR of 21% (17% at
constant 2021 prices), with sales of PHP708 million (PHP612 million in constant 2021 terms)
slated for 2026

2021 DEVELOPMENTS

Demand for Melatonin as A COVID-19 therapy increases due to

government support
Sleep aids registered strong sales growth again during 2021 and one of the major factors
influencing the category’s favourable performance was the strong increase recorded in demand
for products based on melatonin. Melatonin is one of the medicines that has been identified by
the Philippine government as a key adjuvant treatment for the COVID-19 virus. One of the most
notable symptoms of COVID-19 is disruption to sleep patterns, with many of those who have
fallen ill with the virus reporting jetlag-like symptoms, while some more serious cases have
involved severe disruption to sleeping patterns for an extended period. Melatonin has long been
touted as an ideal therapy for overcoming jetlag and improving sleep patterns and this has led to
it being recommended as a medicine that can help those experiencing disruption to their sleep
as a result of the COVID-19 pandemic to recover their regular daily sleep routines. In response,
numerous players took the step of launching melatonin-only sleep aids during 2020 and 2021 in
a bid to capture rising demand. The success of melatonin during 2021 also came in the wake of
studies conducted during 2020 that provided strong support for melatonin’s ability to improve the
outcome of pneumonia and other high-risk symptoms of COVID-19.

Slower growth in 2021 as economic pressures and financial distress

diminish
One of the major factors supporting the strong growth recorded in sleep aids during 2020 was
the stress caused by the adverse economic impact of the COVID-19 pandemic. The pandemic
interrupted commercial activity in key sectors of the Philippine economy throughout 2020, with
the travel and tourism and consumer foodservice industries among those hardest hit. Moreover,
the wider services sector faced a crisis as consumer spending dropped substantially over the
year, resulting in widespread layoffs as many small businesses struggled to continue operating
as their sources of revenue dried up. The resultant stress led to sleepless nights for countless
Filipinos, with many turning to OTC sleep aids as a way of overcoming the insomnia and
sleeplessness that often comes with high levels of stress and anxiety. However, the economic
situation improved somewhat during 2021 as government measures to mitigate the worst

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negative impacts of the COVID-19 pandemic on household finances and the loosening of social
distancing regulations and restrictions on the ability of businesses to operate at full capacity
began to take effect. Nevertheless, the situation remains bleak for many Philippine households,
with financial distress still fairly prevalent among the country’s population. For this reason, while
sleep aids registered another strong performance during the year, growth rates were
considerably lower than what was seen during 2020.

More diverse products emerge as consumers look for more than just
sleep aids
One of the major trends in herbal/traditional products in the Philippines in recent years has
been the increasing interest in products that have a broad positioning and which can be used for
various different purposes and functions. This trend has begun to influence sleep aids as well as
consumers are now increasingly looking for sleep aids that have a range of positive effects over
and above their primary purpose of helping people to relax and get a better night’s sleep. While
it is currently unclear what types of additional benefits consumers might want from their sleep
aids, given the trends that have already been seen in other herbal/traditional categories across
the Philippine consumer industry, category players would be well advised to look beyond the
primary purpose of their sleep aids to offer additional functionalities that can make a mean
contribution to a more holistic, preventative approach to managing stress and improving sleep
patterns.

PROSPECTS AND OPPORTUNITIES

More brands to enter sleep aids as competition intensifies

At the end of the review period, sleep aids was still a consumer health category at an incipient
stage of development in the Philippines. While this means that category sales remain fairly low,
it also means that there is significant room for expansion and development in the category
during the forecast period. With melatonin emerging strongly during 2020 and 2021 as a key
therapy for treating the sleeplessness and insomnia that often comes as a symptom of the
COVID-19 virus, the benefits of melatonin supplements as a sleep aid are likely to become
better known among the Philippine population during the forecast period. As the long-term
health benefits of taking melatonin on a regular basis are becoming increasingly apparent, a
wider range of consumers are becoming more aware of the advantages of taking melatonin,
over and above helping them to sleep better. This raises the prospect that a wider range of
products will appear in the category in coming years, specifically those which are based on
melatonin and which offer a broader range of health benefits in addition to stress relief, better
relaxation and sounder sleep. This is likely to result in changes being seen in a competitive
environment, with the traditional, long-term leaders likely to face strong challenges from
emerging brands which offer melatonin-based products.

Diversification in terms of delivery formats set to widen consumer choice

Another area in which diversification is likely to be seen in sleep aid during the forecast period
is delivery formats. At the end of the review period, the vast majority of sleep aids available via
OTC channels in the Philippines were offered in capsule format. Capsules are generally
considered the default format for systemic consumer health products in the Philippines and
consumers are generally very familiar with capsules is considered an economical format due to
low production costs, ensuring its status as the primary delivery format in sleep aids for many
years. However, innovation in manufacturing and rising consumer expectations make it likely

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that the forecast period will see the launch of various new types of sleep aids in a wider variety
of delivery formats. Among delivery formats that are most likely to appear and become
reasonably popular are liquid formats such as tinctures and solutions, while nasal sprays also
have some potential to become popular among more affluent consumers looking for more
instantaneous results from their sleep aids. Nevertheless, despite this projected diversification of
delivery formats, it is unlikely that the dominance of capsules and tablets will face any serious
threat in the category, with these formats set to remain the default across the category for the
foreseeable future.

The primacy of the BPO industry and the prevalence of shift work to
support sales
The key background trend that is set to influence sales of sleep aids in the Philippines over
the forecast period is the increasing importance of the business process outsourcing (BPO)
industry for the country’s economy. Over the course of the past decade, BPO companies have
flocked to the Philippines, attracted by the country’s huge population of enthusiastic, reliable
young professionals who, crucially, speak fluent, barely accented English. When this extremely
attractive workforce is combined with the low operating costs that generally apply in the
Philippines, the country presents an extremely attractive proposition to multinational companies
that operate call centres, provide online tech support and supply various other back office
functions to companies based in the US, Western Europe and worldwide. The reason that the
primacy of the BPO industry for the economy of the Philippines is relevant to sleep aids is that,
due to time zone differences, the working hours of many employees in the BPO industry in the
Philippines coincide with the working day, or at least daylight hours, in North America, Western
Europe and Oceania. This means that many of the significant numbers of Filipinos working in
the BPO industry often find themselves working overnight and sleeping during the day. In
addition, BPO shift patterns tend to change every few weeks, resulting in at least a few days of
disrupted sleep every month as the sleep patterns of BPO workers are slower to adjust than the
sudden changes in their shift patterns allow for. This obviously presents fertile ground for sales
growth in sleep aids as many of these consumers would benefit hugely from products which can
help them to overcome the chronic fatigue and related psychological effects that come with
regular changes of working shifts and sleep patterns. There is therefore potential for brands
present in the category to develop advertising and marketing campaigns that specifically target
shift workers in the BPO industry, while there is also potentially an opening for entire brands to
be built around the needs of BPO industry shift workers.

CATEGORY DATA
Table 1 Sales of Sleep Aids: Value 2016-2021

PHP million
2016 2017 2018 2019 2020 2021

Sleep Aids 173.9 171.7 175.9 186.4 240.4 275.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Note: 2021 data is provisional and based on part-year estimates

Table 2 Sales of Sleep Aids: % Value Growth 2016-2021

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% current value growth

2020/21 2016-21 CAGR 2016/21 Total

Sleep Aids 14.4 9.6 58.2

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Note: 2021 data is provisional and based on part-year estimates

Table 3 NBO Company Shares of Sleep Aids: % Value 2017-2021

% retail value rsp

Company 2017 2018 2019 2020 2021

UHS Essential Health 24.1 23.0 21.7 25.4 28.1

Philippines Inc
Organica 20.5 20.4 20.2 17.5 16.1
Neutraceuticals Inc
Trianon International Inc 22.2 22.3 22.3 17.5 16.0
Puritan's Pride Inc - - - 3.4 3.5
Others 33.2 34.2 35.8 36.2 36.2
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 LBN Brand Shares of Sleep Aids: % Value 2018-2021

% retail value rsp

Brand (GBO) Company (NBO) 2018 2019 2020 2021

USANA Pure Rest UHS Essential Health 23.0 21.7 25.4 28.1
(USANA Health Philippines Inc
Sciences Inc)
Sleepasil Organica 20.4 20.2 17.5 16.1
Neutraceuticals Inc
Sleepwell Trianon International Inc 22.3 22.3 17.5 16.0
Puritan's Pride Puritan's Pride Inc - - - 3.5
Melatonin Natural
Sleep Aid (Nestlé SA)
Puritan's Pride Puritan's Pride Inc - - 3.4 -
Melatonin Natural
Sleep Aid (Nature's
Bounty Co, The)
Melatonin-T Trianon International Inc - - - -
Others Others 34.2 35.8 36.2 36.2
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Forecast Sales of Sleep Aids: Value 2021-2026

PHP million
2021 2022 2023 2024 2025 2026

Sleep Aids 275.0 317.8 371.5 437.1 516.1 611.7

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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: 2021 data is provisional and based on part-year estimates

Table 6 Forecast Sales of Sleep Aids: % Value Growth 2021-2026

% constant value growth

2021/2022 2021-26 CAGR 2021/26 Total

Sleep Aids 15.6 17.3 122.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: 2021 data is provisional and based on part-year estimates

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