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Store brands post strong performance across mass outlets

BY Michael Johnsen

A new report by Nielsen posted Wednesday by the Private Label Manufacturers Association found that sales of store brands jumped by nearly 10% last year in mass merchandisers, club stores and dollar stores, while the mass channel came closer to overtaking traditional supermarkets as the place where consumers buy their groceries.

Total sales in the mass channel reached $305 billion vs. $324 billion in supermarkets. Sales of store brands in the mass channel increased sharply in both dollars and units, according to nationwide sales data collected by Nielsen. Dollar sales of private label were up by 9.3% while unit sales rose by 9.1%.

Overall sales in the mass channel during 2017 grew by 1.3% for dollars and 1% for units.

The mass channel is an ongoing store brands success story, PLMA noted. Since 2015, annual store brand dollar sales in the sector have increased by $7.5 billion, a gain of +15.8%.

During 2017, store brand sales across all outlets measured by Nielsen came in at $122.3 billion, up 2.7% from $119.1 billion, while units moved up 1.6% to 44.6 billion from 43.9 billion.

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CVS Health ranks on Fast Company’s list of innovators

BY David Salazar

CVS Health has made the Fast Company list of the world’s most innovative companies. The Woonsocket, R.I.-based healthcare company was ranked seventh on the Fast Company list of the 50 Most Innovative Companies, as well as No. 1 on its Top 10 Most Innovative Companies in Health list.

The top 50 list, curated from Fast Company’s top 10 lists, is meant to highlight leading enterprises that are exemplars of the best in innovation and business. The publication had more than three dozen of its editors, reporters and contributors survey thousands of companies to compile the lists.

“CVS Health is honored to be included by Fast Company on their 50 Most Innovative Companies list and as one of the Top 10 Most Innovative Companies in Health,” CVS Health president and CEO Larry Merlo said. “As a pharmacy-innovation company, we are committed to finding new ways of delivering on our purpose of helping people on their path to better health and I am very proud that our enterprise achievements are being recognized.”

The company, currently in an ongoing acquisition of health insurer Aetna, has been working to rethink the pharmacy, including its recently introduced ScriptPath prescription management system and the ways it leverages its CVS Caremark pharmacy benefits manager to help contain healthcare costs. Early last year, the company redesigned its CVS Pharmacy store design.

To see the rest of the companies on the list, click here.

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GNC enters China through joint venture with Hayao

BY Michael Johnsen

GNC on Tuesday announced an agreement regarding a China joint venture agreement with Harbin Pharmaceutical Group (Hayao), a leading pharmaceutical company. Under the terms of the agreement Hayao will invest approximately $300 million in GNC, becoming the single largest shareholder in GNC.

In addition, GNC and Hayao have agreed to form a joint venture for the manufacturing, marketing, sale and distribution of GNC-branded products to the Chinese marketplace.

“Today’s announcements represent important and exciting steps in our efforts to optimize our capital structure and build on our recent momentum as we position GNC to drive growth, improve financial performance and enhance long-term shareholder value,” Ken Martindale, GNC CEO, said. “Hayao’s investment in GNC is a testament to the strength of our brand and the tremendous global opportunity ahead, including in China. By partnering with Hayao and pursuing plans to amend and extend our term loan facility, we enhance our capital structure and financial flexibility and establish a strong platform for growth in the Chinese market.”

The Chinese market is the largest international market for supplements and GNC is one of the most recognized brands by consumers in the market. As a leading player in China, Hayao provides established networks and relationships in the market which will support GNC’s efforts to expand in China, including the ability to accelerate product introduction by leveraging existing “Blue Hat” registrations required for sales in China. Hayao will provide GNC with access to a leading pharmaceutical distribution network in China as well as expertise in operational and manufacturing which will serve as critical resources as GNC works to expand its reach in China.

“As a recognized leader in China, Hayao is an ideal partner as we look to leverage the strength of the GNC brand and capitalize on the demand for nutritional supplements in China. Hayao’s strong distribution network and regulatory, operational and manufacturing expertise will enhance our ability to expand our local product assortment. We are confident this partnership will provide us with the expertise to navigate the competitive Chinese landscape and rapidly expand our brand in China.”

“GNC is one of the most recognized health & wellness brands globally. We are excited about the opportunity to partner with Ken and his leadership team to drive long-term value creation in all markets in which Hayao and GNC operate,” Zhang Zhenping, Hayao chairman, said. “In China we are confident that we can leverage Hayao’s leadership to accelerate the Company’s growth and expansion and deliver GNC products and solutions to millions.”

The transaction is expected to close in the second half of 2018, subject to regulatory approvals in the United States and China, GNC shareholder approval, successful completion of the amendment and extension of the company’s term loan facility due March 2019, entry into definitive agreements regarding the joint venture and other customary closing conditions. Following the closing, Hayao will own approximately 40% of GNC on an as converted basis.

In connection with the investment, the GNC board will be expanded to 11 members including five members from GNC, five members from Hayao and the company’s CEO Martindale.

 

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