Concentrated Clorox enters market
OAKLAND, Calif. — Clorox has released a concentrated version of its namesake liquid bleach.
The concentrated Clorox is designed to improve whitening on clothes and significantly reduce the amount of water and plastic used, ultimately helping minimize Clorox bleach’s and the company’s environmental footprint. The change reduces the typical 96-oz. bleach bottle to a 64-oz. size.
"Concentrated Clorox regular bleach was created for today’s consumers to meet the need for a product that fits their lifestyle," said Benno Dorer, SVP for the Clorox cleaning division. "The Clorox Co. has been in business for 100 years. To be successful over such a long period of time requires respect for tradition and quality, coupled with constant innovation in product improvements to keep delighting our consumers. The new concentrated bleach is just a more modern version of the same quality product that has been around for 100 years."
MoonPie gets a makeover
CHATTANOOGA, Tenn. — MoonPie has debuted a new package design.
After nearly two decades since undergoing a packaging redesign, Chattanooga Bakery decided to completely overhaul the marshmallow cookie sandwiches brand’s packaging with an emphasis on a darker shade of blue that’s accented with whimsical lighter blue swirls, all creating a unique, fresh look. The company tapped The Goldstein Group to create the new design.
Chattanooga Bakery noted it is moving forward to integrate the new design in to all its MoonPie product lines.
"It had been nearly two decades since MoonPie made a major change to its packaging, so this was an important decision with strategic implications for our company," Chattanooga Bakery VP marketing Tory Johnston said. "It was time to take an honest, fresh look and to further distinguish our brand for a new generation of consumers. We love how the new packaging celebrates the night sky, overtly plays up the ‘moon’ part of MoonPie, and also transforms the white — which holds big brand equity for us—into a fluffy cloud."
CVS Caremark’s Q2 growth prompted by Walgreens-ESI stalemate
WOONSOCKET, R.I. — The stalemate between Walgreens and Express Scripts may have come to an end, but CVS Caremark remains optimistic and has developed a multifaceted plan to help it retain a significant number of the prescriptions gained from the impasse, CVS Caremark president and CEO Larry Merlo told analysts during Tuesday morning’s second-quarter conference call.
Meanwhile, CVS Caremark’s solid second-quarter performance and outlook has prompted the company to raise yet narrow its guidance for the year. CVS Caremark now expects to deliver adjusted earnings per share of $3.32 to $3.38 for the full year 2012, up from its previous guidance of $3.23 to $3.33.
“The retail business continued to take advantage of the unprecedented opportunity presented to us by the stalemate between Walgreens and Express Scripts. This resulted in significant market share growth in the quarter and, as anticipated, we realized about a 3.5-cent benefit in Q2 from the impasse,” Merlo told analysts. “Now, with the recent news that Walgreens will re-enter the broadest Express Scripts network this Sept. 15, we estimate that we will generate an additional benefit of approximately 5 cents per share in the second half of the year.”
That estimate assumes that, in the fourth quarter, CVS Caremark retains at least 50% of the prescription volumes gained from the impasse. In addition, the 5-cents-per-share additional benefit is net of estimated investments the company will make to maximize retention.
For the quarter ended June 30, pharmacy same-store sales rose 7.2%, compared with the year-ago period and included a significant benefit associated with Walgreens not being a part of the Express Scripts pharmacy provider network during the quarter. In addition, pharmacy same-store prescription volumes rose 7.7% when 90-day scripts are counted as one script. When converting 90-day scripts into three scripts, the same-store prescription volumes rose 9.8% during the quarter.
It is estimated that the stalemate added 410 to 430 basis points to its pharmacy same-store sales and 400 to 430 basis points to its script comps during the quarter, equating to roughly 6.5 million to 7 million scripts.
“In light of the timing of the recently announced settlement by our competitors we expect to retain a vast majority of the scripts we gained through the third quarter and to retain at least 50% in the fourth quarter,” Merlo said. “Many of you have asked how we expect to accomplish that level of retention and, while it obviously wouldn’t make sense to discuss our specific retention strategies for competitive reasons, I can assure you that we have a highly detailed, multifaceted plan in place to achieve our goals.”
According to Merlo, this multipronged plan involves customer outreach, in-store touch points, advertising and promotions. The plan is based on “sophisticated analytics and it makes economic sense,” Merlo said.
“So, we are very confident that we will retain a significant portion of that business,” Merlo told analysts.
2013 selling season “well under way”
With the 2013 selling season well under way, Merlo said he is pleased with the overall success in the season, thus far. With most health plans and larger employers having made their decisions for Jan. 1, the focus is now on mid-year 2013 opportunities, plus a significant number of opportunities for 2014.
To date, gross wins have totaled $3.5 billion, resulting in net-new business of $640 million to date, on a 2013 impact basis.
Merlo also told analysts that the company is seeing increased interest in narrower networks. He added that, in fact, clients representing about 20% of the new revenue signed for 2013 have adopted a limited pharmacy network, and that excludes those clients that have signed on for the Maintenance Choice program.
“So while we’re not seeing a watershed change in the adoption of limited networks, it is clearly a factor in the selling season and it will continue to be on the table as a cost-savings opportunity for clients,” Merlo told analysts.
Merlo also told analysts that the company continues to see strong interest in its proprietary programs — which CVS Caremark refers to as its integration sweet spots — such as Maintenance Choice and Pharmacy Choice, and also experienced strong double-digit growth in specialty pharmacy. In fact, specialty pharmacy revenues rose 44% during the quarter.
Revenues for the pharmacy services segment rose 28.2% to $18.4 billion, driven largely by new clients, drug cost inflation and new activity resulting from its acquisition of the Medicare prescription drug plan of Universal American in April 2011.
Meanwhile, retail revenues rose 6.9% to $15.8 billion. Same-store sales rose 5.6%, as front-end same-store sales increased 2.3% during the quarter.
MinuteClinic posted a 17% boost in second-quarter revenues and ended the quarter with 584 clinics.
Income from continuing operations attributable to CVS Caremark rose $153 million to $967 million. Adjusted EPS from continuing operations attributable to CVS Caremark were 81 cents per share compared with 65 cents per share in the year-ago period.