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Latin America: Swine Flu Boosts Healthcare Manufacturers

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Manufacturers are benefiting from healthcare advice in Latin America

CHRONICLE SPECIAL
Euromonitor International

Almost two months after the swine flu virus first hit the headlines, the number of cases in Latin America continues to rise and a growing number of sufferers and fatalities have been reported across the region, with Mexico, Chile and Argentina the hardest hit so far.

Although Mexico, the source of the outbreak, seems to be over the worst, countries further south are seeing an increase in cases. In Argentina the government is on the verge of declaring a state of emergency as swine flu spreads with increasing speed. Meanwhile, Brazil recently experienced its first fatality, accompanied by reports that a new strain of the virus has emerged. With the south of the region approaching winter, which brings with it an elevated risk of the virus spreading as well the challenges of seasonal flu, governments and consumers are growing increasingly concerned about preventing the spread of germs.

The Brazilian Government recently announced it would spend US$67 million on combating the virus, much of it on public information campaigns offering advice on how to stop swine flu spreading. Campaigns such as this, which are likely to be adopted in other countries in the region, will bring heightened awareness about influenza transmission and are therefore likely to boost demand for disinfectant and anti-bacterial household care products.

MULTINATIONALS BENEFIT

Multinational household care companies such as Clorox, Reckitt-Benckiser and SC Johnson all have a strong presence in the Latin American countries where the virus remains virulent, and all offer products with germ-killing properties. As a result they are likely to benefit from health and hygiene campaigns, such as that given by the US Centre for Disease and Prevention Control: “Keep surfaces clean by wiping them down with a household disinfectant”. Tissue products, including Kimberly-Clark's Kleenex brand, which also has a strong presence in the affected countries, also stand to benefit from government advice to use tissues, which can be disposed of, rather than handkerchiefs.

Within household care, Clorox has so far been the most proactive in addressing the outbreak in the region. The company donated cases of Clorox regular bleach worth $100,000 to aid agencies in Mexico and offers advice on minimising swine flu risks on its website, including guidelines on which Clorox products to use. The company reported that it has boosted production of bleach and disinfecting towels at its plant in Mexico to cope with the increased demand, adding that sales of disinfectant wipes rose 10-fold the week after the Mexican Government asked citizens to wipe down work areas and homes with disinfectant or bleach.

MASKS QUICK TO MARKET

Within disposable paper products, Kimberly-Clark was quick to innovate on the back of the crisis in Mexico, launching a face mask targeted at children and decorated with pictures of Disney characters. Kimberly-Clark is among the few manufacturers that make respiratory masks sophisticated enough to ward off swine flu, which are relatively low-cost and high margin items, and rolling out the mask into Argentina, Chile and Brazil would seem a likely move.

Although reactive marketing can be extremely effective in driving sales, targeting a campaign directly around the virus does, however, have risks. Manufacturers will not want to be seen profiting from a crisis and must act prudently to strike a balance between pushing the product and driving unfounded fears. Perhaps as a result of these obstacles, the majority of manufactures in the region have so far steered clear of any direct marketing around swine flu, limiting themselves to offering advice online, allowing government awareness campaigns to drive sales on their behalf.

While it is too early to see the impact the swine flu virus has had on consumer spending, past crises, such as the SARS virus, saw demand for antibacterial and disinfectant products reach around six times normal levels in the countries hardest hit, and this latest outbreak looks set to bring a welcome boost to manufacturers in Latin America.

 © Copyright Latin Business Chronicle

 

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