NEW BRUNSWICK, N.J. — McNeil Consumer’s absence from cough-cold and analgesic aisles, including several pediatric formulations, will extend into the fourth quarter, Johnson and Johnson executives told analysts in January.
While retailers are likely to restore the Tylenol real estate once distribution is back online and McNeil begins supporting the brand again, right now that empty space is ripe for planogram expansion by rival over-the- counter companies. “It’s a mixed bag for [retailers],” Kline Group healthcare analyst Laura Mahecha suggested. “A lot of what J&J lost went to private labels; I’m sure [that] has helped retailers’ margins in a lot of the categories.”
The first hurdle will be restoring consumer confidence in the brand, a campaign that doesn’t look likely until 2012 now. “At the appropriate time, we will be investing in market support for our over-the-counter brands, such as Tylenol, Motrin and many others,” J&J chairman and CEO William Weldon told investors. “And we will be introducing product and packaging innovations for many products, especially for those for young children.”
U.S. sales across J&J’s OTC pharmaceuticals and nutritionals dropped 52.8% over the fourth quarter. The McNeil recalls impacted the fourth-quarter sales by approximately $300 million and total year sales by approximately $900 million, the company reported.