How Year-Round Demand Is Reshaping OTC Supply Chains

As a new COVID-19 variant, NB.1.8.1, spreads rapidly across several U.S. states, including California, Washington, Virginia, and New York, public health officials are sounding the alarm just as summer travel ramps up. 

This development reinforces what many health experts and manufacturers have already recognized: Respiratory illnesses no longer follow predictable patterns.

According to data from the U.S. Centers for Disease Control and Prevention (CDC), flu, COVID-19, and RSV are now surging earlier, lasting longer, and emerging during months once thought to be low-risk or “off season.” For manufacturers of over-the-counter (OTC) cold and flu products, this unpredictability is forcing a fundamental shift in how, and where, supply chains are built and maintained.

On top of this, the threat of strikes, labor shortages, geopolitical instability, and transport disruptions has introduced another layer of challenges—further complicating an already volatile landscape.

While some manufacturers have begun adapting, turning to strategies like regionalized production, dual sourcing, and expanded local manufacturing, many have yet to adjust. For those companies still relying on traditional, centralized models, the latest variant should serve as a wake-up call—the industry’s future resilience depends on developing supply chains that can respond quickly and flexibly.

A Shift in Cold and Flu Seasonality

The world has changed dramatically since the COVID-19 pandemic, with one of the most significant shifts being in the seasonality of respiratory illnesses. Historically, cold and flu seasons were predictable, with peaks in late fall through early spring.

However, over the past few years, the timing and intensity of these illnesses have become increasingly erratic. COVID-19 has continued to circulate globally, with other respiratory viruses like RSV contributing to surges—often at times when demand for cold and flu relief products is not expected. In addition to this latest variant, summer 2023 and summer 2024 both saw a sharp spike in demand for cold and flu medicines due to an unexpected COVID-19 uptick.

The CDC estimates that in the 2023-2024 flu season alone, there were 40 million flu-related illnesses and nearly 470,000 hospitalizations in the United States. And, with continued uncertainty around COVID-19—particularly the potential for off-season spikes—manufacturers face the ongoing challenge of meeting demand when the unexpected occurs.

This volatility has highlighted the vulnerabilities in global supply chains that many manufacturers, including Reckitt, have long relied on. Currently, much of our Mucinex production is based outside the United States, but moving more of that production to the United States with a new flagship OTC manufacturing site in Wilson, North Carolina, will shorten delivery timelines, reduce reliance on global supply chains, and enable us to respond more quickly to regional fluctuations in demand. 

Responding to a New Era of Demand

Customer relationships are vital to maintaining market presence, and strengthening these relationships during volatile periods of supply and demand has become key. By moving production closer to consumers, companies can reduce the time it takes to get products from factory to shelf, anticipating a reduction in lead times and allowing for faster responses to sudden demand spikes. The ability to shift production closer to the market is crucial when a surge in illness hits unexpectedly.

Investing in local manufacturing also builds redundancy into supply arrangements to mitigate risk around single-source procurement. Stronger sourcing strategies and more flexible procurement processes are essential for managing challenges related to raw materials and securing a steady flow of materials.

This approach isn’t just about responding to current demand; it’s about building a more dynamic supply chain that can respond to both predictable and unforeseen shifts.

Agility and Resilience for the Future

Building systems and infrastructure that can withstand and quickly recover from inevitable disruptions is key to navigating the new era of supply chain complexity. For companies still relying on traditional models, this may mean exploring strategies such as regionalizing production or investing in more local manufacturing—steps that can offer greater flexibility in the face of sudden shifts in demand.

Just as OTC products help consumers bounce back from the disruption of cold and flu symptoms, OTC manufacturers must take proactive steps to strengthen their own ability to rebound. After all, when it comes to supply chains, resilience may be the most effective and powerful form of immunity.

 

Philip Hampden-Smith is the SVP of Supply for North America at Reckitt, the maker of products like Lysol, Mucinex, Delsym, and Airborne.