Over the counter medicines (OTC) have become an increasingly common sight in the grocery trade over recent years. While the government has stopped short of total deregulation of the pharmacy industry for grocers, it is keen to encourage self-medication for a range of complaints – and time-pushed consumers are also keen to go down this route.
The supermarkets in particular are making their pharmacy sections a priority and this means that consumers are getting used to buying medicines and healthcare products outside of a traditional pharmacy.
Forecourts, meanwhile, have an added advantage over many of their non-pharmacy competitors in that opening hours are often longer, making forecourts first choice if the chemist is shut, or if consumers simply want to pick up a cold or indigestion remedy on the way to or from work.
A spokesperson for GlaxoSmithKline (GSK) says: “Distress purchases such as pain relievers, allergy nasal sprays and indigestion remedies are becoming must-stock items for forecourts where demand and convenience overcome any price considerations. In fact, independent grocery has enjoyed considerable gains in some categories with indigestion up 27 per cent, pain relief up 18 per cent and cold and flu up 16 per cent – all considerably outperforming the total grocery market. Visibility is key and retailers who ensure they stock the top brands will reap the rewards for investment in a relatively small fixture.”
A further indication that OTC is here to stay is the recent consent by the government to lift advertising bans on a range of medicines, which could come into force by the end of the year. The idea is to increase the level of information available to consumers, although there will be no change to the ban on advertising prescription-only medicines.
So, in order to give consumers the confidence to self-medicate, advertising and awareness programmes are key. With this in mind, retailers should keep an eye on which companies and brands are supporting their products with advertising, as these are the brands that consumers will look for in-store.
Pfizer Consumer Healthcare is one company that has grasped the opportunity to advertise its OTC products with the aim of selling them through the grocery trade. This year, for example, the company is backing its Anusol brand with a £1m advertising campaign designed to give consumers the confidence to self-medicate.
Matthew Rich, product manager for Anusol, explains: “In recent years, Anusol has successfully demonstrated that investment in above-the-line advertising in so-called embarrassing categories such as haemorrhoids has a significant impact on consumer awareness and can reap substantial benefits for category growth as a whole.
“With one-third of piles sufferers currently not treating, education is key to de-stigmatising the condition and encouraging consumers to treat appropriately via the grocery outlets.”
The company has also been using product development to drive the market, offering consumers new ways of treating common ailments, such as colds. With the decongestant market currently worth more than £24m through the grocery trade, this is an area where retailers can really make a difference to sales by stocking the appropriate products. Forecourt customers, for example, are more likely to be drawn to non-drowsy versions of cold and flu remedies and you could miss a sale if you don’t have these on offer for motorists.
In 2000, Pfizer launched a non-drowsy version of Sudafed Dual Relief and the heavyweight investment put behind the brand helped Sudafed record a growth of 26.4 per cent over the 2000/2001 winter season, according to AC Nielsen.
Sarah Johnson, senior product manager for Sudafed, says there is high demand for this type of remedy: “On average people suffer from two to five colds a year and among the symptoms most likely to linger are nasal congestion and sinus pain. Therefore, non-drowsy Sudafed Dual Relief is good news for customers and great news for retailers who are eager to increase their store profits within the decongestant category.”
Meanwhile, GSK says that growth in the established cold and flu category is coming from trading up to combination products and those which offer additional benefits in terms of strength, product delivery or innovative packaging. A GSK spokesperson says: “The sheer size of this category means that it is highly profitable and the focus on premium and branded products will drive more value into the category.”
The Beechams brand is well established in the forecourt market and will benefit from a £5m support package for the 2003/04 cold and flu season, with £1.5m dedicated to Beechams Max Strength Sore Throat Relief. GSK is also introducing an impulse eight-tablet pack of Beechams All in One tablets, ideal for forecourt outlets. The product will be supported by TV and radio advertising as part of a new £2.5m support campaign.
Another established seller is medicated confectionery brand Tunes, which relaunched last month. Tunes now have a new smooth oval shape, are sugar-free and packaged in pocket-sized flip-top boxes. A £4m media campaign supports the relaunch alongside in-store activity including pos such as three-tier counter-top units, which Masterfoods says can help retailers more than double their sales.
Painkillers are one of the most popular OTC products, and Anadin claims to be the number one analgesic in the impulse sector, accounting for nearly 35 per cent of all painkiller sales (the top two brands – Anadin and Nurofen account for 66 per cent overall).
According to IRI data the UK adult oral analgesic market value is worth over £329m and is growing at almost three per cent year on year, with impulse outlets accounting for more than 15 per cent of painkiller sales.
Anadin manufacturer Wyeth says painkillers are the biggest profit contributor to the OTC fixture but points out that customers already know which painkiller they want to buy when they enter a store, so the key to sales is to help them find it easily.
“When in pain shoppers are particularly keen to find and pay for their product quickly and easily,” says an Anadin spokesperson. “Seven out of 10 shoppers don’t think price is important when buying a painkiller.”
To this end, Anadin has a new pack design which it says makes it easier for customers to locate on the fixture, and to make sure the brand is front of mind for consumers, Anadin is supported by a £6m marketing campaign this year. To maximise sales, the company advises forecourt retailers to keep painkillers on the self-selection counter so that customers don’t have to ask for the product of their choice.
Forecourts are also likely to cash in on the newly launched ‘on the go’ Alka Seltzer from Bayer – single dose sachets of Alka Rapid Crystals can be taken anywhere, any time, as no water is needed and are designed to combat ‘morning after’ headaches.
Alka Seltzer is the first to launch this new format in the over-indulgence category. Aurelie Avogadri, Alka Seltzer product manager explains: “The arrival of Alka Rapid Crystals is anticipated to drive a massive growth in grocery sales – by giving consumers what they have been waiting for – a convenient, great tasting and fast acting remedy to take on the move.
“With the launch of Alka Rapid Crystals, we estimate an additional £1m will be brought into the total over-indulgence market.”
To support sales, Alka Seltzer will invest in a £1.5m campaign. Alka Rapid Crystals is distributed in its own merchandising unit, ready to be placed on the grocery counter to drive impulse sales. Rrp is £3.29 per pack of 10 sachets.
Meanwhile, GlaxoSmithKline’s indigestion remedy, Tums, has a publicity campaign during October, aimed at pregnant women, who the company says are frequent sufferers of heartburn and indigestion. Ads will appear in women’s magazines until the end of December as part of a £150,000 spend on the brand. Tums come in handy 36 packs (rrp £1.65) for impulse as well as packs of 75 tablets (£2.75).
Roche has also put money behind its indigestion brand, Rennie Deflatine, changing the packaging to give it more on-shelf visibility and impact. It is now available in a 36 and handy 18-pack with rrps of £5.29 and £3.19 respectively. The brand’s distinctive yellow branding has been reworked into a modern design that forms part of a new marketing push for Rennie which runs until the end of the year. This includes a £1m national press advertising campaign.
Again, the sensitive nature of the product means that advertising is key to driving sales. “Trapped wind and bloating affects around one third of all women,” explains Pam Kemp, Roche OTC category manager. “There is embarrassment associated with this common problem and our marketing campaign aims to break this down and position Rennie Deflatine as a real handbag essential for modern women.”
Also aimed at women is Bayer’s latest Canesten product, Canesten Oasis Cranberry (rrp £4.25), for the relief of cystitis. Bayer says that more than 50 per cent of women suffer from cystitis at some point in their lives, and that lots of women associate it with the Christmas period when more alcohol is consumed. Bayer therefore recommends that grocery outlets stock up this autumn. Penny Curtis, Canesten product manager, says it is important retailers stock a brand consumers have confidence in: “Cranberry is the most popular fruit flavour associated with relieving cystitis, so stocking new Canesten Oasis Cranberry is anticipated to drive growth in the cystitis relief market. Recent research has shown that in grocery, Canesten Oasis is the most popular product with cystitis sufferers [IRI data June 2003]. Grocery staff should stock up on this new cystitis product from Canesten – a brand that 91 per cent of women know and trust.”
This year Bayer is supporting Canesten Oasis Cranberry through consumer and trade activity. Grocery outlets can stock a new Canesten Oasis Cranberry consumer leaflet and pos support is available on request.
Children’s medicines are becoming increasingly important in the OTC category as more child-specific products come onto the market.
One must-stock for forecourts is children’s pain and fever brand Calpol, which has a 66 per cent share of the UK market and was voted Best Pharmaceutical Product 2002/03 by Mother & Baby magazine. This is a real distress purchase, and once parents know you stock it the likelihood for repeat purchases is high.
Again, new product variants drive the market, with innovations such as GSL Calpol Infant suspension sachets and Calpol Six Plus sugar-free suspension sachets. Calpol says the sachet format is particularly suited to grocery outlets and points out that annual sales of sachets amount to £6.7m – meaning UK families get through nearly 3.5 million packs a year.
Another product aimed specifically at kids is the new Olbas for Children, a decongestant that launches this autumn. “With child-oriented products now accounting for almost 20 per cent of market value, we wanted to create a brand new formula to suit children’s needs and mothers’ expectations,” explains Kathryn Hynes, Olbas brand manager at GR Lane Health Products.
The product fits well into the forecourt sector as it is an ideal distress purchase. The launch of the decongestant, formulated for children from three months, is being supported by a £1m national TV ad campaign – part of a £3m ad spend on the Olbas brand. Rrp is £2.19 for a 10ml product.
Condoms have long been a must-stock product for forecourts, and SSL, manufacturer of Durex, points out that there has been a recent shift towards buying condoms from outlets other than chemists – its 2002 Durex Report showed that 48 per cent opted for other outlets including forecourts.
Durex brand manager Zoe Lawrie says: “With young adults leading increasingly busy lives it is important that they can buy high quality condoms whenever and wherever they are needed – and the impulse sector caters for this need perfectly. Retailers also benefit because, according to IGD research, health and beauty products are the fourth most profitable category for the convenience sector, above soft drinks and milk.”
To help forecourts make the most of sales, Durex provides a range of merchandising units, which enable retailers to easily stock a comprehensive range of condoms.
Meanwhile, Remco Teulings, marketing and business development manager for Ansell Europe, manufacturer of Mates, suggests that forecourt retailers site condoms where self-selection can be made: “This removes the embarrassment of having to ask for the products, which improves sales rates significantly, often in excess of 100 per cent,” he says.
“Ease of purchase also increases customer loyalty to a store, effectively turning it into a ‘destination shop’. If an outlet makes purchase as embarrassment-free as possible it is likely to become the preferred destination, which in turn leads consumers to pick up other products as the same time.”
Mates suggests stocking a selection of key lines such as Mates Natural, Ultra Safe and Xtra Pleasure.