The good, bad and ugly of the probiotics category
NEW YORK Beneficial bacteria not only is generating good news for overall gut health, it’s also a hot category for drug store retailers. The rising interest in probiotics can be credited in part to Dannon’s Activia brand, a line of yogurts and yogurt drinks that has been advertised heavily to the American consumer, with the message that not all bacteria is bad for you — and in fact some bacteria, taken on a regular basis, can impart some pretty significant health benefits.
“Consumers are very receptive to it,” commented Michelle Cunningham, marketing director, respiratory, GI and topicals, Bayer Healthcare, Consumer Care Division. Probiotics as a category has gotten very good receptivity, she added. “You can see that just by the sales of the yogurt category [and] now going into the digestive category.”
The sales already are ramping. Sales of probiotics tracked as supplements were up 32.7% for the 52 weeks ended Jan. 25, according to Information Resources Inc., reaching a dollar volume of $47.6 million across food, drug and mass (minus Walmart) outlets. Sales of Amerifit Brands’ Culturelle, tracked within antacids, are up 40.9% to $10.2 million. And sales of Dannon Activia, the probiotic-rich yogurt credited by many suppliers for educating consumers on probiotic benefits, were up 15.2% to $215.2 million; Dannon Activia Light sales were up 69.6% to $115.4 million.
That advertising message — that probiotics can be an important piece in a healthier-for-you diet — is about to be all the more reinforced as Bayer reaches national distribution with its Phillips Colon Health, and Procter & Gamble rolls out its Align probiotic to full distribution in mid-March. Phillips Colon Health was launched in the fall of 2008 and is positioned against the Phillips digestive brand already familiar to consumers. Both Bayer and P&G plan to support their respective brands with consumer messaging and pharmacist education, which translates into ever-increasing first-timers entering the category.
And the consumers already are core drug store shoppers. The ratio of women to men in search of a product delivering digestive benefits is about 2-to-1, suggested Susan Abeln, P&G principle scientist. When women hit their 30s and 40s, that’s the point in their lives when they’re looking for a strategy in life to help them manage their digestive issues, Abeln said. “They use a lot of compensating behaviors to deal with the impact of these digestive disorders on their day-to-day life, so they’re very careful about what they eat; they’re very careful about what activities they [participate in].”
“We really see [the buying demographic] as a female [between the ages of] 35 and 49 … where digestive health has started to become a concern for them,” Cunningham said. “These tend to be busy and active women [who are] looking for more proactive, natural products to take care of their health.”
Merchandising and marketing a yogurt brand in-store is relatively easy — those products belong in the refrigerated section alongside other yogurt offerings. But the traditional placement of acidophilus/probiotics supplements alongside other dietary supplements creates a sort of conundrum for many probiotic suppliers touting the digestive benefits delivered by their products. It all comes down to where in the store will the consumer be shopping for those digestive benefits, according to several suppliers. And the answer is in the digestive aisle.
“My main competitor is Imodium,” suggested Mary Berry, marketing manager for Biocodex, which markets Florastor, and therefore should be positioned alongside other digestives, especially as some of the benefits around improving gut health can help alleviate such acute conditions as diarrhea.
“We believe that probiotics should be shelved in the aisle where they’re going to provide the benefit that they’ve been proven to provide,” commented Abeln. “There are some probiotics out there that have been studied for eczema or for allergies, even women’s health. Those shouldn’t be in the digestives aisle where the consumer will be seeking health for that particular problem,” Abeln added.
And as probiotics gain in popularity, more and more retailers — e.g., Walgreens and Target — are creating a destination center of sorts for probiotic products with an adjacency to the digestives set.
Another concern expressed by many of the suppliers in the probiotics category is good manufacturing practices. Not all probiotics, as a broad category, deliver health benefits, and when a specific strain of probiotics is supported by clinical efficacy data, there is some difficulty in producing a shelf-stable product that delivers enough of the actual live bacteria before the actual “use-by” date expires. That live bacteria needs to survive both the manufacturing process and a consumer’s own digestive system in enough numbers that it makes a beneficial difference on the gut’s flora. To do less is to risk efficacy. And any lack of efficacy in such a burgeoning category as probiotics could turn into one-off trials where consumers try the product, don’t realize the benefit and then spurn not only that ineffective product, but the entire category.
Even with all of the category growth, “there’s a lot of confusion about probiotics,” Berry said. “It’s very difficult for a consumer to know they’re getting a good [probiotic], and it’s just as difficult for a pharmacist to know they’re recommending the right one. The market is flooded with various forms of bacterial probiotics,” which makes professional communication all the more crucial in this category, especially as probiotics are more and more recommended alongside the use of antibiotics.
“Not all probiotics are created equal,” noted Tom Kuhn, Align brand manager at P&G. “What I mean by that is the benefits are strain specific. … Part of our opportunity is to really help educate consumers around the fact that … they really need to understand the differences [between probiotic strains] when they select the product that’s right for them.”
Walgreens set to expand distribution capacity
WOBORN, Mass. Walgreens is expanding the distribution capacity at its Mt. Vernon, Ill.-based distribution center by adding more portable robotic picking devices and upgrading many of its traditional conveyor-based systems into automated zones for sortation and movement of items to be shipped.
Walgreens uses the Kiva Mobile Fulfillment System from Kiva Systems in Mt. Vernon to store inventory and pick replenishment orders for its 6,700 stores and specialty pharmacies. Expanding the system in that distribution center puts nearly 1,000 mobile robots under a single roof, according to Kiva.
The upgrade marks the third expansion of the robotic picking system at the center since its initial deployment in 2007, Kiva noted. It also heralds a doubling of the throughput capacity at the center, the company reports.
“Productivity metrics from previous rollouts far exceeded Walgreens’ specifications for pick rate, accuracy, cycle time, tote utilization and installation time,” said Kiva CEO Mick Mountz. “By doubling capacity we expect Walgreens to quickly achieve an extraordinary new level of strategic competitive advantage and productivity.”
Congress takes up follow-on biologics bill
The long-awaited breakthrough for follow-on biologics may be close at hand.
Prompted by a far more supportive President and the growing crisis in healthcare funding, Congress has again taken up the call for a bill that would create a regulatory pathway for FDA approval of generic versions of biologically-engineered drugs. And with the strong affirmation of President Obama, who has campaigned for such an approval pathway, the newest iteration of the bill stands a far better chance of passage than previous attempts in the House and Senate.
The Promoting Innovation and Access to Life-Saving Medicine Act could mark the most significant change to the delicate balance of power between the branded and generic drug industries since passage of the landmark Hatch/Waxman compromise bill in 1984, which ushered in the modern era of me-too medicines. Tellingly, one of the new bill’s sponsors is an architect of that 1984 legislation, Democratic Rep. Henry Waxman of California.
The push for follow-on biologics augers well for both health plan payers and patients coping with the sometimes staggering costs of critically important but expensive pioneer biologics, and for the generic drug industry itself as it faces a critical shortage of new marketing opportunities as the number of blockbuster drugs facing patent expirations dries up. A new pipeline of me-too biologics could help fill the gap.
“With countless patients struggling to pay the high costs of brand biopharmaceuticals, an approval pathway for safe, effective and affordable biogeneric medicines that provides access sooner rather than later is desperately needed,” stated Kathleen Jaeger, president and CEO, Generic Pharmaceutical Association.
Cost-saving considerations aside, there’s no disputing the business potential follow-on biologics represent. Bio-engineered pharmaceuticals and specialized, highly targeted medications aimed at serious chronic or life-threatening diseases represent the only major bright spot right now in the global pharmaceutical market, with growth rates that far outpace the sluggish market for mainline meds. Indeed, most of the drugs that have reached blockbuster status in recent years have been biologically engineered specialty meds.