Category awakens with energetic sales
With the launch of Procter & Gamble’s ZzzQuil, a relatively quiet sleep category has exploded with energy this year. A lot of that has to do with the $121.1 million in sales that ZzzQuil — both tablet and liquid formulations — has generated this year.
But that doesn’t explain everything. The entire category is up nearly $145 million. For the 52 weeks ended June 16 across total U.S. multi-outlets, IRI measured a 707.4% lift in sleep liquid sales to $89.7 million. The slightly larger category of sleep tablets realized a 29.8% lift in sales to $294.2 million.
"[Sleep] is definitely one of the higher-growth areas that we’ve seen recently," noted Laura Mahecha, industry manager at Kline’s Healthcare practice. It had been on a strong trajectory over the past few years, Mahecha said, "but ZzzQuil really bumped it up."
And it’s not the only sleep brand with a strong growth trajectory. "The MidNite brand, a more natural sleep aid, continues to do well," Mahecha said. "People like it because of the claim that they’ll ‘wake alert.’"
MidNite’s introduction of MidNite for Menopause as a line extension was recognized as one of Parade magazine’s 2013 Products of the Year.
Meda Consumer Healthcare, which acquired the MidNite brand in late 2012, also trades on the "other side of the aisle" with its alertness brand Vivarin. Vivarin will be undergoing a package redesign this fall, Kimberly Brown, Vivarin brand manager, told DSN. "Focused on gaining relevancy in the lives of young adults, the brand is embracing a lifestyle marketing approach that includes new TV [and] pop-culture events."
Regulations, aging population boost category sales
Martha Stewart, who is launching her own line of supplements at NACDS Total Store Expo, couched the aging of America as a "silver tsunami" that will have older Americans streaming toward all things health and wellness.
In addition to a swell of seniors, the overall tone in the media has turned more positive when it comes to supplements — and with good reason. Both the Food and Drug Administration and the industry at large have worked toward better regulating and vetting the supplement space.
"The industry is continuing to grow," Steve Mister, CRN’s president and CEO, told DSN. "Even through the recession of 2008-2009, we were seeing [upward of] 8% growth. We’re seeing a lot of interest from outside the industry, whether it’s equity capital coming into existing companies, or whether it’s other companies buying into the industry." The public companies that entered the category through acquisition in the past year include Church & Dwight (L’il Critters/ VitaFusion), Procter & Gamble (New Chapter) and Reckitt Benckiser (Schiff/Airborne).
"First of all, … 57% of adults use nutritional supplements, and it’s going to just stay very strong going forward — very steady growth between 5% and 10%," said James Craigie, C&D’s chairman, CEO and interim president. The opportunity, he said, is in gummies — 58% of kids’ vitamins are gummies, but gummies comprise only 3% of adult SKUs.
That’s changing, however, as both Pfizer Consumer and Bayer Healthcare have entered with Centrum and One-A-Day launches, respectively. Bayer’s One-A-Day VitaCraves has been one of the fastest-growing vitamins this year.
Innovation drives brands’ competition
Despite significant challenges coming from private label, Procter & Gamble is still attempting to innovate the No. 1 brand in all of digestives — Prilosec OTC. The company launched a wildberry-flavored Prilosec OTC earlier this year, not to be chewed, but to improve the experience in taking a Prilosec OTC tablet versus an unflavored, generic equivalent.
But Prilosec’s biggest challenge to its digestive dominance is still on the horizon. There is still one proton-pump inhibitor to be switched — Pfizer bought the rights to Nexium from AstraZeneca last year for a whopping $250 million. Nexium prescription sales dwarfed those of Prilosec, and Prilosec OTC reached upward of $700 million in total sales its first year. "Just the magnitude of what Pfizer spent to acquire the [Nexium] rights, it tells you that it’s a big opportunity," Perrigo chairman, president and CEO Joe Papa told analysts after the deal was announced.
Tums may be better equipped to handle a Nexium introduction. To put it simply, GlaxoSmith-Kline’s Tums is still cheaper than its H2-blocker and PPI cousins, and it works much faster. That may explain why other marketers are moving into that tried-but-true calcium carbonate space. Bayer Consumer recently launched Alka Seltzer Fruit Chews, and Chattem is planning a relaunch of the venerable Rolaids brand later this year.
The No. 2 brand in the digestives space is Merck’s MiraLax laxative, which continues to sell well. The company is currently driving trial through its MiraLax Pledge campaign that offers a $1-off coupon up front and a $5 reward after purchase.