Front-end focus: OTC gets in on the ‘Action’
The phrase coined by Sam Walton — “Stack ’em high and let ’em fly!” — is reverberating throughout Walmart again.
The retailer’s back-to-basics strategy is good news for OTC suppliers, because going back to basics at Walmart also means going back to a broader product selection. Between the resumption of Action Alley and a recommitment to assortment, Walmart already has grown its carrying inventory by 4%, and the company plans to grow its inventory at a rate of half the expected sales lift.
Reverting to Action Alley could spark pantry-loading of the medicine cabinet again. Today, 58% of consumers only purchase an OTC medication when there’s a need, according to a recent SymphonyIRI Group survey. More importantly for Walmart, Action Alley might help reverse the slight decline in OTC dollars and units — Walmart OTC sales were down 0.1% and units were down 2.1% in 2010 versus 2009, SymphonyIRI Group reported.
Action Alley also affords Walmart a ready vehicle to showcase new product launches. “From a supplier’s perspective, you can get your product out there and get market share and trial and penetration much faster through our system than you can anywhere else,” Bill Simon, Walmart U.S. president and CEO, told analysts earlier this year.
P&G, GSK hold their own in crowded antacid aisle
NEW YORK — Last year, the big question on everyone’s mind was: How many brands can actually thrive in what has become a cluttered antacid shelf? Because just exactly how many heartburn sufferers are there?
With some 65 million Americans affected by gastric complaints and 30% of those seriously affected with a major gastro event each year, the answer is enough to drive 13% growth into a category that was already above the $1-billion watermark across food, drug and mass (excluding Walmart), according to data provided by SymphonyIRI Group for the 52 weeks ended Oct. 3. That’s $150 million more than last year, and the annual indulgence of heartburn- inducing holiday foods for the ensuing 2010 season hasn’t even begun.
The lion’s share of that growth can be attributed to Novartis Consumer and its successful rollout of Prevacid 24HR, which generated $118 million within the first 11 months on shelf. And Merck Consumer brought in another $12.7 million with the launch of the third over-the-counter proton-pump inhibitor Zegerid OTC a little more than six months ago.
But the real story may be in how both Procter & Gamble and GlaxoSmithKline Consumer Health successfully guarded — and in the case of GSK’s Tums, even grew — market share.
Procter & Gamble only lost $11.9 million in annual sales (not including Walmart) of its clear market leader, Prilosec OTC. Not only did P&G have to contend with two new PPI competitors — Prevacid 24HR and Zegerid OTC — but the brand also had to compete for the second year with extensive store-brand-equivalent competition. According to Perrigo president, CEO and chairman Joe Papa, Perrigo’s omeprazole products brought in some $325 million through retail registers for the year through June 2010.
GSK, meanwhile, grew sales by approximately 5.9% to $98.3 million across its top three Tums brands by stressing its fast-acting benefit; calcium relieves heartburn almost immediately, versus within an hour or so for such H2 blockers as Pepcid AC and Zantac, and a day or so for PPIs. “Tums is still a category driver with the highest household penetration and is a destination item in the category,” noted GSK Consumer director of sales Janet Carter-Smith. Immediate relief holds a 63% share of stomach, Carter-Smith added, with almost four times more buyers than PPIs and H2 blockers.
But extended-relief and immediate-relief products address different needs for the consumer, Carter-Smith noted, and the needs of extended-relief products don’t necessarily cannibalize sales opportunities for immediate- relief products, and vice versa. Extended- relief and immediate-relief products also serve different needs of the retailer; extended relief delivers a high dollar ring, while immediate relief helps contribute to trip opportunities.
Partly for those reasons, GSK has positioned its Tums brand as a conjunctive sale to PPIs. “There are approximately 44 million PPI users with an estimated 81% experiencing breakthrough heartburn,” Carter-Smith said. “Tums doesn’t replace PPIs,” she said, but that immediate relief helps take care of that breakthrough heartburn on the spot.
Reporters Notebook — Over The Counter, 12/13/10
Supplier News — Cirrus Healthcare Products recently introduced its ClearEars product, earplugs that contain a polymer that draws water from the ears. ClearEars also is appropriate to alleviate symptoms of glue ear, a condition in which thick, sticky fluid collects behind the eardrum.
Left untreated, glue ear can cause temporary hearing loss and may affect a child’s behavior. Adults with glue ear also find it difficult to use regular earplugs to reduce noise, or for water protection while swimming. Consumers with glue ear have reported that soft, comfortable ClearEars may be used while sleeping to reduce noise and also alleviate the moist, sticky glue ear feeling.
New Business Solutions recently introduced its Product Protection System, a loss-prevention shelving solution. The new shelving unit helps thwart professional shoplifting groups by eliminating the ability to sweep a shelf by dumping an entire shelf of merchandise into a duffel bag at once.
However, the unit does not inhibit legitimate customers from accessing the product. The gravity feed front orientation of a PPS designed to display baby formula, for example, allows one canister of formula to be dispensed at a time. There is a 20-second delay before another canister can be accessed, and no power supply is required, the company stated. The PPS can be customized to accommodate various product sizes and fit into an assortment of planograms, the company noted.
Save Flexible Spending Plans — a national grassroots advocacy organization sponsored by the Employers Council on Flexible Compensation — called on the new leaders in Congress to remove the soon-to-be- imposed restrictions on employer-provided flexible spending accounts immediately following the election.
The more immediate restriction is the Jan. 1, 2011, requirement that over-the-counter medicines be prescribed in order to be eligible for reimbursement from a FSA. That will force consumers to spend upward of $40 on doctor-visit co-pays in order to save some $2.50 for every $10 spent on nonprescription items.