Sanofi Consumer Healthcare is on the cusp of becoming a standalone OTC business, following in the footsteps of other CHC giants like Haleon and Kenvue.
Addressing analysts on Sanofi’s recent Q2 earnings call, the French pharma firm’s CFO François-Xavier Rogers said that the company is still reviewing three options for Opella – the standalone’s official name – an initial public offering, a spin-off, or a sale to a private party. (Also see "Sanofi In Midst Of ‘Very Competitive Process’ For Consumer Business" - HBW Insight, 26 July, 2024.)
In the meantime, becoming a standalone involves a transformation of the culture from being category-focused to brand-led, explains Sanofi CHC’s chief growth officer Alberto Hernandez in this exclusive interview.
“Learning to be comfortable with being uncomfortable” is an important step for both marketers like Hernandez and the company’s leadership, he tells HBW Insight.
Such out of the box thinking – captured internally by the slogan “Crazy Elevating Creativity” – is what enabled Sanofi CHC to win its first Cannes Lion award in 2023, followed by two this year, Hernandez notes.
But this new approach is translating to more than award wins alone, he points out. Sanofi’s first Cannes Lion winning campaign – probiotic Enterogermina’s “Ready Player Mom” ad – generated a 16% increase in sales during the marketing push, he reveals.
While it has enjoyed success, Sanofi CHC is not getting complacent. The business is now looking at how generative AI can make consumer health marketing more accessible, and also identify the wisest investments when it comes to marketing spend.
As Hernandez concludes, “Who knows what’s around the corner – but we’re not about to be left behind!”
In a recent interview, you described the consumer healthcare industry as holding itself back with “perceived constraint,” referring to the overly cautious manner in which OTC firms market their products. Why is this the case, do you think, and why do other highly regulated industries like finance and travel manage to connect with consumers emotionally?
In highly regulated industries, erring on the side of caution can often be the default when it comes to brand building. The irony is, in the business of self-care, we’re often first to the post when it comes to embracing innovation. But admittedly, we are not always the best at shouting about it or relaying in our message to the consumer. And I say that as someone with an FMCG background. Take allergy season, as an example. An image of someone sneezing, surrounded by tissues or flowers; a clichéd creative like this has limited impact when it comes to marketing allergy solutions. Why? Because it doesn’t evoke any kind of emotional response. It’s too obvious and impersonal - and yet our health is the single most personal possession anyone can have.
A smarter, more relevant way of talking to people and earning their attention exists, and it starts with solid consumer insights paired with cultural relevance. We invest heavily in this type of research at Sanofi Consumer Healthcare. As an example (for allergies), most of us know someone who has always dreamed of owning a pet cat, but allergies have stopped them, right? Well, I think a lesser-known fact is that pet hair itself is not an allergen, and science shows that responsible procedures such as neutering can reduce a protein in cats which commonly trigger an allergic response by up to 90%. This is the kind of insight that can be the basis of cut-through creative, as we demonstrated in our recent Allegra Adopt Your Allergies activation.
We held a press conference with adoptable cats, partnered with local pharmacies in Colombia to get the message out. We even held a “speed dating” event in partnership with cat adoption agency, Adopta No Compres, to make the previously deemed “impossible,” possible for allergy sufferers. The result was a 49% increase in sales for our pharmacy partner, compared with the same period last year, and our social media interactions shot up by 457%. In short, I think we got the message out loud and clear.
You recently posted on LinkedIn the story behind Sanofi CHC’s “Crazy Elevate Creativity” plan that resulted in the firm winning its first ever Cannes Lion Award. Why was entering Cannes important?
It is exciting to be part of a business and leadership team willing to challenge the status quo and embrace outside the box thinking. “Learning to be comfortable with being uncomfortable” is definitely paying off for us. This all started a few years ago with a fact-finding delegation to Cannes Festival of Creativity. In truth, we jumped in fully with the mindset of being ‘the underdog’; we knew the place would be brimming with inspiration, and admittedly, brands executing better than we were at that time. We left with a clear plan, benchmarking us against the best of all industries. It focused on what we needed to do to really make our mark and grow our loved brands.
Just a year later, we won our first Cannes Lion award, and two more Lions 12 months on from that. Not bad considering we thought we’d be lucky to be recognized on this scale after five years. But our success at Cannes has been about so much more than trophies and creative for creative’s sake. It’s about bringing health in the hands of more people by making self-care as simple as it should be. If we do that, people will choose us and our efforts will be more effective and efficient. As a result of “Crazy Elevating Creativity” (as we call it internally) our loved brands awareness has increased. People resonate with our brands and our performance has moved in the right direction.
This year you were one of the Health and Wellness Jurors at Cannes Lions. From reviewing multiple entries, what stood out to you in this category?
Cannes is quite simply the benchmark for creative excellence, and I can honestly say that my experience as a juror was so inspiring. Brands in health and wellness are truly owning their category. As I’ve said before, regulated industries like health can be quite stifling for innovators and creative brand builders, but this year’s Cannes winners did not shy away from who they are; they were daring, funny and human. It was so refreshing to see!
One of my favorites was Dramamine (a motion sickness medicine) with ‘The Last Barf Bag’ – an educational short film diving into the history of the invention, which first launched the same year Dramamine hit the market –1949. It was very integrated and fantastic to see film used as a medium. I also loved Saudia Airlines and their campaign ‘ProtecTasbih’, which provided a smart solution to hand sanitizing while traveling during the world’s largest annual gathering – prayer beads which sterilize hands. Innovative, effective and respectful to passengers’ religion – a truly insight led piece from a brand that knows its consumer.
Since you introduced your new approach to marketing, Sanofi has seen a 250% increase in creative awards compared with the previous year. But what has been the effect on Sanofi’s consumer healthcare business results?
As I’ve explained, these awards are about more than just the trophies and glory – they validate our efforts and approach with external, cross-industry experts. So, a 250% increase in award wins is a great leading indicator of our performance. But we are very diligent in measuring how our creative efforts deliver for the business.
In our eyes, you need three ingredients to achieve success: quality execution, thoughtful innovation and, most importantly, measurable business results. The Ipsos action standard of “attention” is a world leading indicator of reaching people and meeting business KPIs. The percentage of our campaigns surpassing this standard has doubled in the last two years, since 2017-2021, and it’s all thanks to improved quality of execution and better media management.
In fact, looking at results from the last three years, our loved brands are winning. Especially our focus 15 brands which includes loved icons like Doliprane, Buscopan, Dulcolax, Enterogermina, Magne, Dorflex, EVE and Cenovis, among others. All of them hold top-three positions, and the majority are number-one in their respective categories and markets.
You could argue that there is some “science” behind this success. The fact-finding Cannes delegation I mentioned earlier resulted in a seven-point plan, which included the establishment of our “Creative Lab.” This brings together internal and external experts to review our business’ marketing output and challenge it to go further and aim higher. To support this, we also launched our “Crazy Elevate Creative Fund” – an earmarked fund that allows brands to unlock a boost to their marketing budget for new and bold ideas. So far, we’ve funded nine ideas from the Creative Lab, including our first Cannes Lion winner, Enterogermina’s Ready Player Mom. This campaign didn’t just bridge the gap between gut health and gaming, it also generated a 16% increase in sales during the campaign period.
You may also have seen a few of our Dulcolax’s activations. The #TalkingS**t campaign set out to break the poo taboo in the UK by “sponsoring” the S word on X at the end of last year. We did this by hijacking the world’s most expletive ridden platform to provide gut health advice to potty-mouthed tweeters, and, as a result, the brand saw a 6% uplift in sales. In the US, we partnered with influencers and health care professionals to “flush the stigma” surrounding constipation and laxatives on social channels. Who would have thought striking up a conversation on the importance of “the morning poo” would engage so many people. It is educational yet accessible activity like this that has allowed Dulcolax to gain market share globally. Keep an eye out for more mischief from this brand!
Sanofi Consumer Healthcare is on a journey to becoming a brand-led organization. What does this mean for the CHC business?
As well as creating an environment which nurtures creativity, we’ve encouraged a company-wide shift from being “category” focused to becoming “brand-led” at Sanofi CHC. In our growth strategy, we wanted to simplify governance and promote efficiency and scale. This led to the identification of our focus 15 brands that drive the lion’s share of revenue and growth. We want to embody the essence of a consumer health “challenger” and that means changing how we view ourselves. I’m incredibly passionate about the need for hyper personalization when it comes to targeting consumers – it builds connection and trust. We have a dedicated innovation and portfolio management team, and their main job involves addressing consumer’s needs more closely. This includes building organizational capabilities across the innovation funnel (from ideation to post-launch tracking), identifying key innovation platforms to unlock future growth, and scaling up brands with strong potential in key geographies.
The team is already delivering. For example, a few years back we worked cross functionally with other departments including our science hub team to recognize a growing demand for easy-to-take laxatives that are gentle on the body. As a solution, we launched a new Dulcolax format – a great tasting soft chew. This made us the first consumer healthcare business to market a cramp-free, soft chew formula, resulting in year-on-year growth in the US for the Dulcolax brand. Earlier this year, we launched a new innovation in our Icy Hot Massaging Balm too - a first-of-its-kind lotion ball co-designed with consumers that can be massaged into sore muscles and provides pain relief. We work closely with our finance colleagues to monitor brands’ growth and performance following the launch of innovative solutions.
AI is now playing a huge role in creativity, marketing, and healthcare. Has AI impacted the way you and your team work?
At Sanofi CHC, we use AI across a number of disciplines. We have a new team of art directors and wordsmiths who are piloting GenAI content creation, and already there’s been promising results. The volume of assets it can help us develop in the blink of an eye is one thing, but the exceptional quality is another. This is an important KPI for our experimentation, especially when it comes to accuracy. For example, we are also exploring the role it can play in translating scientific content into accurate but accessible language for consumers – a key challenge when it comes to enabling self-care.
Then there is measurement. AI can help us understand and assess reach and impact in new ways, which is critical as we seek to refine and elevate our strategy. It can also help us plan our marketing investments. We’ve developed a new best-in-class marketing spend methodology, for instance, and at the heart of it is an AI powered analytical tool. We can now simulate millions of advertising and promotional spend scenarios by leveraging consumer data, external factors and user-defined constraints.
So, as you can see, the scope for exploration and implementation is incredible - and the technology is absolutely impacting the way we work in a positive way. We are excited, we are moving at pace and paying close attention to getting the governance right too. It’s a really fascinating time to be a marketer with tech like this at our fingertips – it’s game-changing. Even in these early days, we can already respond much more quickly to cultural trends, produce always-on content at scale, and use data to really get under the skin of our consumers. Who knows what’s around the corner – but we’re not about to be left behind!