When it comes to health care companies, there's no bigger name than the largest firm in the business: Johnson & Johnson (JNJ 0.67%).

What doesn't J&J produce? From pharmaceuticals to consumer care goods to medical devices, this major medical player has it all. That can make it tough on investors trying to understand this highly diversified company, however: With so many parts, what do you need to keep an eye on? To get a grip on this colossus of the health care sector, let’s take a look at Johnson & Johnson’s consumer products business and how the company can turn around this lagging division.

Sales falling across the board
J&J made its biggest splash in the consumer health field back in 2006, when it purchased Pfizer's (PFE -0.12%) consumer care segment for a whopping $16.6 billion, or more than four times the division's sales in 2005. Pfizer made out nicely in that deal, but the acquisition isn't looking as brilliant for J&J despite some of the big brand names – such as Listerine, Rolaids, Rogaine, and more – it acquired.

The division's sales fell nearly 3% year-over-year in 2012, and consumer health's share of J&J's total revenue has also declined -- from a nearly 23% share in 2011 to less than 21.5% in 2012, while pharmaceuticals and medical devices have taken priority in the company's growth plans.

J&J's massive over-the-counter children's medicines recall in 2010, courtesy of its McNeil Consumer Healthcare subsidiary, hasn't helped matters. After the company voluntarily pulled 43 medicines from shelves due to problems at manufacturing facilities, the FDA stepped in and signed a consent decree with McNeil.

The agency has governed several manufacturing plants ever since, and Johnson & Johnson reported in its most recent annual filing that production continues to lag at FDA-controlled plants due to approval and review processes. With the company expecting that trend to continue this year, growth in the over-the-counter business won't likely impress investors in 2013.

Not like the other consumer care segments have grown recently, either: J&J's oral care business posted the top sales "growth" in 2012 by managing not to lose revenue year-over-year, mainly due to Listerine's stronger sales. Meanwhile, women's health products saw sales fall 9.3%, while skin care -- a segment that makes all sorts of common brands from Bebe to Aveeno to Neutrogena -- baby care, and other products also experienced single-digit percentage declines.

Currency issues are hitting every segment in this business: International sales, which make up the majority of consumer health revenue, fell around 3.5% last year. Still, it's not all currency's fault that J&J's having problems abroad: The company cited international competition and poor economic conditions as negatively impacting its skin care business's results, despite sales of top brand Neutrogena climbing.

Can J&J turn it around?
Consumer care isn't a growth investor's dream; with revenue on the downswing and little opportunity, if any, to make a big splash with a blockbuster product like in the pharmaceuticals industry, J&J will have to slowly turn things around in this business.

Fortunately, there are avenues for growth. While international sales are lagging, J&J should turn to emerging markets to fuel its future revenue. The company boasts several strong nutritional brands such as Splenda, Lactaid, and Viactiv; with emerging markets (India in particular) demanding nutritional products as new middle classes emerge, J&J should make a push abroad with its tried-and-true brands.

Competitor Abbott Labs (ABT -0.59%) has already focused heavily on growing nutritional sales by investing in infrastructure in India and other developing economies, and the push has paid off by turning the business into one of Abbott's most promising segments going forward. J&J would be smart to follow in its footsteps: The company already has made inroads into India with its beauty, baby care, and OTC products, and also sells Splenda in India; boosting its nutritionals presence in the world's second most-populous nation would increase its presence in one of tomorrow's most attractive markets.

Investors may not look at consumer health as the most exciting of Johnson & Johnson's many businesses, but this segment's still a major foundation for the company's revenue. It can't afford to lose its edge as a leading consumer care company in the world, even with the FDA still looming over its over-the-counter business and sales falling. This segment's just as important to Johnson & Johnson's future as its medical devices and pharmaceuticals.