Basically, it’s a warning to vendors
WHAT IT MEANS AND WHY IT’S IMPORTANT — As Walgreens pays tribute to its store brand via hard-hitting ads that position its health-and-wellness products as the ones that its pharmacists recommend, CVS/pharmacy officially has unveiled its new Just the Basics private-label line — both developments that should serve as warning signs to vendors.
(THE NEWS: CVS/pharmacy’s Just the Basics line makes debut. For the full story, click here)
CVS’ Just the Basics is not just another private-label concept. What sets it apart is the fact that, unlike other private-label concepts that try their hand the national-brand-equivalent positioning, Just the Basics is a very clear price-value proposition. Just the Basics implies that it’s not the same quality as the leading brand — but it’s probably at least as good as the value-priced option the big brands market (i.e., Bounty vs. Plenty; Charmin vs. Charmin Basic). Clearly, CVS is saying that it wants to own that price point.
"Now, while many retailers are stuck in the brand-follower mode of the 1980s, we have evolved to a leadership role," Mike Bloom, CVS Caremark EVP merchandising and supply chain, told analysts during the 2010 analyst meeting in October in New York City.
Private-label penetration at CVS stands at about 17% and over the next two to three years that number is expected to grow to more than 20%. It is also interesting to note that Just the Basics targets the customer in categories where taste/flavor or even efficacy aren’t as critical as it might be in such categories as food or OTC.
It is no secret that retailers have been working to bolster their private-label offerings, but these latest moves by both CVS and Walgreens are clear indications that this trend is gaining significant steam.
The news certainly raises the stakes on vendors’ need to communicate back to the retailer and the consumer why their brands are important and why they belong on the shelf and in the basket.
The innovative vendor will use every means available to communicate that message or die trying.
If Walgreens’ new private-label ads were a wake-up call for vendors, then consider this the snooze bar going off for the first time. And, you can only hit snooze so many times, before you’ve officially overslept.
So … are you awake yet?
Type 1 diabetics continue to be at risk for kidney disease
BOSTON — Advances in kidney care have not led to successful efforts to improve therapy for patients with Type 1 diabetes, according to a study published in the Journal of the American Society of Nephrology.
The study, conducted by researchers at the Joslin Diabetes Center and Brigham and Women’s Hospital, examined 423 patients with Type 1 diabetes who developed macroalbuminuria, a condition in which excess protein is passed through the urine. Patients with Type 1 diabetes have an increased risk of developing macroalbuminuria, which can lead to end-stage renal disease, also known as kidney failure. The researchers found that 172 patients developed ESRD.
Still, despite increases in the use of kidney treatments over the last 20 years, the risk of ESRD and pre-ESRD did not change, with ESRD mortality rates remaining similar between the 1990s and the 2000s.
Hal Rosenbluth to exit Walgreens
DEERFIELD, Ill. — Walgreens on Friday announced that Hal Rosenbluth will retire as president of its health-and-wellness division in April but will continue with the company as a senior consultant to the CEO for healthcare services.
Rosenbluth was a co-founder of Take Care Health Systems, which was acquired by Walgreens in 2007. Prior to that, he led Rosenbluth International, a global travel management company, which he sold to American Express in 2003.
“Hal’s entrepreneurial spirit was instrumental to Walgreens as we expanded our pharmacy, health and wellness services through our Take Care retail clinics and worksite health centers,” stated Walgreens president and CEO Greg Wasson. “He helped these businesses become key components of Walgreens’ broad set of health-and-wellness offerings. Under Hal’s leadership, we have successfully restructured our sales and client services organization and have added to our clinical capabilities.”
“As patients increasingly become shoppers of health care, continuing to grow our services through our Take Care retail clinics and worksite health centers headquartered in Conshohocken, Pa., is central to executing our strategy of improving access and convenience in meeting the everyday needs of our patients and customers,” Wasson added.
As part of Walgreens’ community-based health solutions, the Take Care retail clinics and worksite health centers, led by Peter Hotz, now will report to Mark Wagner, president of the company’s community management division. The sales and client services organization, led by chief client officer Joe Terrion, and clinical services, led by chief medical officer Cheryl Pegus, will become part of the Walgreens pharmacy, health-and-wellness services and solutions division, under Kermit Crawford, president of the division.