IRI explores how hard the flu is hitting retail
Everyone’s been talking about how hard hit the nation is from the current flu season, but not many have been dishing about what’s happening at the checkstand.
IRI on Wednesday released a comprehensive report outlining the initial impact of this year’s virulent flu season, as well as a size-up on how much out-of-stocks are hurting retailers who are running out of cough-cold supplies.
“We all know what it feels like to shop for medicine when you’re sick, only to find an empty peg or shelf,” Bob Sanders, executive vice president of IRI’s Health Care Practice, said. “When this happens, one-third of consumers will make their purchase at a different store, and fewer than half will make a substitute purchase. Manufacturers and retailers must be prepared when the flu sweeps through town. Since market nuances are very important, we leveraged the IRI Illness Tracking to uncover flu trends market by market and store by store, so consumers from Little Rock to Houston don’t have to face that dreaded empty shelf.”
The flu is now widespread nationwide, and it will take weeks before the epidemic begins to subside. The Houston market has been hit hard, with 11.8% of its population battling the flu, and New Orleans (11.7%), Mobile, Ala. (11.7%), San Diego (11.7%), Dallas (11.1%) and St. Louis(9.9%) are following closely behind.
IRI’s new report, “Flu Fury: IRI Pinpoints How Flu Is Impacting U.S. Markets” examines how specific regional markets are being impacted by the flu and correlates how purchase behaviors vary at the market level. The research helps retailers anticipate inventory needs and avoid the typical 4% sales loss caused by out-of-stock products.
The spread of the flu virus is creating strong sales growth across many over-the-counter health care categories that treat and manage symptoms. For the four weeks ended Jan. 14, sales of cough syrups were up 39.9% nationwide; sales of cough-cold liquid formulations were up 35.1%; and sales of cough-cold tablets were up 26.8%
Like many things in life, though, one size does not fit all. Comparing trends for the entire United States versus specific regional markets provides a clear illustration of the pronounced variations. For example, sales increases for those categories in Houston climbed 46.1%, 40.6% and 33.2%, respectively. In San Diego, dollar sales of those categories were up 99.3%, 83.8% and 61.9%, respectively.
“With health officials reporting that this year’s flu season is now more intense than any since the 2009 swine flu pandemic, retailers must invest to understand the impact this type of event has on their sales and shopper interactions,” said Susan Viamari, vice president of Thought Leadership for IRI. “They simply can’t paint a broad brush stroke across their stores and end up with an accurate picture. You really need to look at stores by specific markets, because stock-outs will have a major negative impact on sales, and that can hit the bottom line very hard, translating to $40 million per year for a billion-dollar retailer.”
Other categories benefiting from the rush on cough-cold supplies include spray disinfectant (nationwide, sales were up 39.5% for the four weeks ended Jan. 14), RTD baby electrolytes (29.2%), single-cup teas (21.1%) and ready-to-serve soups (19%).
HRG delivers natural trend update to ECRM cough-cold attendees
The natural marketplace is evolving quickly as consumer demand grows and the impact on sales, category management, promotions and product introductions intensifies, Dave Wendland, vice president strategic relations and member of the owners group at HRG, plans to tell attendees at ECRM’s Cough/Cold, Analgesics & Allergy EPPS on Feb. 11. Attendees will walk away with key insights about consumer expectations, effects on traditional options and placement strategies. In addition, Wendland plans to make several bold predictions for the future of natural within core categories.
“Given the impressive growth across natural and organic product categories, retailers and suppliers alike should be looking for ways to strengthen their assortments and create appeal beyond core shoppers,” Wendland said. “This can lead to a shared objective across the retail supply chain that can be mutually beneficial.”
Much of Wendland’s presentation has grown out of natural product research Hamacher Resource Group, based out of Waukesha Wis., has conducted over the last few years in an effort to stay abreast of the latest innovations and offerings in the industry, as well as help manufacturers and retail pharmacies capitalize on growing consumer interest and demand. Angela Pinkstaff, director of business development at HRG and veteran of the natural products segment, said, “By introducing more of these products to their customers, retailers can capitalize on demand that will only accelerate. At HRG, being in our unique position, one of the ways we’re servicing this segment is looking at how we can help suppliers communicate their value proposition to community pharmacies who are well suited to serve the natural consumer due to their strong focus on customer service and care.”
New products energize VMS aisle
What is coming down the pike? More importantly, what are suppliers doing to catch the consumer’s attention in the constantly evolving vitamin, weight management and sports nutrition categories?
Suppliers and retailers converged on Washington, D.C., in mid-January to both preview new products and discuss new initiatives at the annual ECRM Vitamin, Weight Management and Sports Nutrition EPPS. ECRM officials said that more than 500 people were in attendance for the event.
Here is a look at what some companies are offering to the trade in coming months.
The Irwindale, Calif.-based company is offering BioTerra Herbs, a line of herbal supplements that company officials said are designed to “balance the body” are gluten-free, non-GMO and completely natural.
The 14-SKU line features such items as detox, joint, energy, male fertility, weight management and snoring products. Most 60-count packages are priced at $19.99. Company officials said they are targeting female millennials with the bulk of the line and use what they describe as “blunt and direct” packaging to educate shoppers at the point of purchase.
“Right now, about 60% of our ingredients are harvested from our own farms,” Lisa Zhong, the company’s CEO, said. “We want to be at 100% in a few years, and to completely control the quality of our products. We believe in quality over quantity. Consumers quickly trust in what we have to offer them.”
The Hollywood, Fla.-based company is introducing an eight-SKU line of liquid water enhancers. The products, Best Aminos, Best Energy, carnitine and garcinia, each come in two flavors and each has a suggested retail price of $3.99 for a 24-serving package.
“This is truly a convenience play for retailers,” said Chris Mackenzie, the company’s senior vice president. “And with the low pricing, it will bring more consumers into the category who was previously reluctant to pay the $30 or so price point for other products. With our product, the user can just drop it into his or her gym bag and take it out when needed.”
In honor of its 50th anniversary last year, Mason Vitamins is rebranding its entire line of vitamins and supplements. According to Patricia Jones, the Miami Lakes, Fla.-based company’s sales-general manager, the new packaging will be more up-to-date and feature its heritage logo, as well as highlight that the company was founded in 1967.
Mason Vitamins has more than 400 SKUs in its line of products. “After exhaustive and collaborative research, we think that we have come up with packaging that features a cleaner label that makes it easier for the consumer to understand what the products are designed to do for them. We think it will quickly lead to more sales,” Jones said.
The company also is introducing eight SKUs in the first quarter of 2018. The new items include vitamin K2, biotin, Osteo Restore Joint therapy, a match gummy and a collagen gummy, as well as a body, hair, skin and nails gummy. They have suggested retail prices of $12 each.
Mauer Sports Nutrition
The Albertville, Minn.-based company is offering the Organic Trim weight management bar, which includes svetol, an ingredient that company officials said is clinically-proven to burn fat. The product is low in sodium, high in fiber and has no refined sugars, artificial ingredients and preservatives. It has a suggested retail price of $2.99.
“On top of all of that, it tastes amazing,” said Tim Braun, the company’s president. “The category has been struggling because there has been very little innovation in recent years. Our product is going to make a big difference. Most weight management bars are not healthy for the user. Our product is the first natural and organic weight management bar on the market. It is nutritious and tasty.”
Mauer also is offering its Collagen Protein JumpShot, a strawberry banana-flavored shot that is designed to support cartilage, nails, skin and the digestion process, as well as better sleep. It has a suggested retail price of $3.99.
The Plainview, N.Y.-based company is pushing its Dr. Redcross line of supplements. The 20 SKU-line of products includes vitamin D, omega fish oil, Ultimate Brain Support, resveratrol and CoQ10, pycnogenol melt and melatonin melt. Suggested retail price points range between $10 and $29.95, though company officials said they try to keep prices under $20 per item.
Jason Kam, Purity Products’ vice president of business development, said that the products offer a number of unique benefits to users. For example, he said, the resveratrol product supports cardiovascular functions, while the melatonin melt supports restful and quality sleep. The formula for the Ultimate Brain Support product was developed with the help of Oxford University research on more than 200 aging consumers.
“We offer a unique product mix that is not a commodity item for retailers,” Kam said. “We focus on issues that consumers are becoming more and more concerned with, and our unique formulations will ultimately save them money. For the retailer, we produce incremental sales and we appeal to a multicultural type of consumer who may not have been purchasing these types of products in the past.”
Nick Symmonds, the CEO of Eugene, Ore.-based RunGum, was a former Olympic runner. Now he is taking his knowledge and desire and turning it into a product that he thinks will make a difference for those consumers who want an energy boost without what he calls “all the junk.”
The six-SKU line of energy-boosting gum items consists of both single-serving and bulk-pack products, and are priced at $2.99 for the single-serving and $22.49 for the bulk packages. “We are different from other energy boost products on the market,” said Symmonds, who competed in the 2008 and 2012 Olympic games in middle distance events. “The functionality of chewing gum allows for very fast absorption and leaves no junk in the stomach. It is great for those seeking better energy, alertness and focus. We are not reinventing the wheel; we are just making the wheel a little better. Our product is perfect for anyone on the run.”
It has worked in other countries, why can’t it succeed in the United States? That is what officials at Swisse, a Melbourne, Australia-based manufacturer of vitamins and supplements, hopes for as it introduces its product into this country.
Swisse has had much success in a number of other countries, including its home country of Australia, as well as in New Zealand, China, Singapore, the United Kingdom and Italy. The company offers 15 SKUs in its line, including men’s and women’s Ultivite, which company managing director Oliver Horn called the “ultimate multivitamin” and a children’s Ultivite. Other products include a liver detox product, a product for hair, skin and nails, and a product for better sleep. Products sell for between $15 and $35 each.
“We think that there is a great opportunity for us in America,” Horn said. “We have a great track record in other countries, and we are truly the first global lifestyle wellness brand. And, we have Nicole Kidman as our spokesperson in this country, and that will help us build our brand identity.”