Halls Defense Vitamin C Supplement Drops By The Case Articles & Resources

Supplements--particularly herbal supplements, from what chain buyers are saying and what the numbers are indicating--have captured an audience beyond the confirmed vitamin user. "Definitely--the bar has been raised that much higher," said Tim Bland, category manager of OTC and healthcare for Drug Emporium. Certainly, Bland is not alone in his thinking. Most of the OTC category managers, natural care buyers and vendors with whom Drug Store News has spoken over the past several weeks have observed more or less the same. Not only does the category continue to explode--only gathering momentum, it seems, whenever anyone dares question its long-term growth potential--but those in the know have noticed, just as Bland has, that the bar has been raised significantly on what the natural care customer is willing to spend. And, for Bland, who insists that for all the media hype natural care has received of late, managing the category "is still a numbers game," the numbers bear it out. A second look at last year's ACNielsen numbers indicates that the nutritional supplement customer made purchases per year, each time buying items. That makes more than a third of American consumers, each spending nearly $29 a year on nutritional supplements--$ per trip. One year earlier, the average amount consumers spent on supplements per purchase was $. In addition, ACNielsen tracked the multivitamin customer, who spent almost $15 in 1997 in two shopping trips. Herbals drive category; retailers make room Indeed, many of the retailers and vendors Drug Store News has interviewed lately insisted that the largest part of the natural care category's growth is attributable to a sharp rise in the popularity of herbal supplements among consumers. Through the first quarter of the year, herbal sales were up 73 percent in Longs, said Sharon Findley, category manager of OTC and baby care. By contrast, vitamin sales had increased just 25 percent during the same period in Longs stores-a dramatic gain by any means, certainly, but nonetheless overshadowed by the growth of Longs' herbal set. Still, all the growth has caused Longs and other chains to reconsider the amount of space they had been dedicating to natural care items. At the start of the summer, Findley said, Longs had started the process of enlarging its herbal sections an additional two feet "without taking away from any other segment," a seemingly improbable proposition that has required the chain to be a little more creative in its merchandising strategies. Longs' herbal set, which had run 6 feet in-line, is being expanded to 8 feet in all stores. However, in Longs stores where in-line expansion is not an option, the company will go with a two-foot, winged endcap at the end of its natural care gondola run, the front of which will be planogramed centrally at Longs headquarters by Findley, leaving the winged sides free for store managers to respond to new launches. This ability to respond immediately to late-breaking product trends is the key to staying on top of the natural care game, said David Kronrad, Sundown Vitamins vice president of national accounts. "This category is about kava kava being on '20/20' Monday night, and then selling 1,000 percent up come Tuesday morning," Kronrad said in a recent interview. Of course, Longs hasn't been alone in its desire to expand its natural care presence. In the past several months, many chains have made a similar commitment. Phar-Mor is rolling the Nature's Bounty Vitamin World store-in-a-store concept out to all of its stores-a major focus of the chain's "Big Change" marketing campaign. Meanwhile, Drug Emporium has converted its standard 48-foot natural care set to a 98-foot to 125-foot power alley. It certainly didn't take long for Findley and her peers at these and other chains to find something hot with which to fill the extra space. As mentioned earlier, this has been the year in which the natural care game has been dramatically impacted upon by the dual phenomena of expansion and free agency. By NACDS Marketplace, Warner-Lambert had unveiled its latest herbal offerings, thereby recommitting itself to the category it first explored last fall. The two-product Quanterra line (Quanterra Mental Sharpness with gingko and Quanterra Mood Support with St. Johns Wort) joins Halls Zinc Defense and Celestial Seasonings Herbal Drops with Echinacea, which the company positions in cough/cold against other lozenges. As for future Warner-Lambert launches, the company plans to take a cautious approach to product development. "We'll have a clean point of difference," said business development manager Kathy Hershey. "We'll only go after products that are supported by firm clinical research. For instance, we won't do a ginseng." Within weeks of Marketplace, Bayer Consumer Products was ready to pull the wraps off its long-awaited and much talked about eight-product line under its One-A-Day label. The line of combination supplements includes One-A-Day Cold Season, with echinacea, zinc and vitamin C; One-A-Day Energy with ginseng and B vitamins; Tension & Mood, with St. Johns Wort, kava kava and B vitamins; Memory & Concentration, with gingko and B vitamins; Bone Strength, with soy extracts and calcium; Menopause Health, with soy extracts and black cohosh; Cholesterol Health, with garlic and soy extracts; and Prostate Health, with saw palmetto and zinc. At press time, American Home Products still hadn't unveiled its own highly anticipated herbal launch. Shortly after Warner-Lambert introduced its first two herbal offerings late last year, news broke that AHP had inked a deal with Pharmaprint to develop a seven-product herbal line under its Centrum label-which remains the No. 1 brand in multi-vitamin sales, with 27 percent of the . mass retail market. In the meantime, AHP purchased the rights to the "free agent" natural care manufacturer Solgar, and should begin to benefit from that company's recently launched "True to Life" ad campaign, which kicked off this summer with public transit ads in the New York City market. The Solgar line includes hundreds of SKUs.. Upsher-Smith joined the natural care expansion activity at Marketplace with three new herbal items of its own: Alterra, a St. Johns Wort supplement; Provol, with pygeum africanum, recommended for maintaining overall prostate health; and Folgard, with folic acid, which has received some favorable press in terms of its ability to maintain the cardiovascular system as well as promote healthy pregnancies. Mood, mind support pique consumer interest There seems to be little disagreement among retailers, or their vendor partners for that matter, that two items continue to contribute greatly to the category's current successes: St. Johns Wort and gingko. On the herbal side of the business, while sales rose almost 26 percent across mass retail channels in 1997, a great deal of the growth was spurred by sharp increases in sales of St. Johns Wort and gingko. Sales of St. Johns Wort grew more than 122 percent last year, climbing to $89 million; a 1,680 percent increase since the flower-named for the Christian saint on whose feast day it traditionally reaches first bloom-first hit the American market in 1995 with a paltry $5 million in sales. Meanwhile, gingko sales climbed a rather dramatic 53 percent, generating some $130 million through retail outlets in 1997. Certainly, most retailers Drug Store News has interviewed about the subject insist that the single herb formulations that actually incorporate the names of these hot-selling herbal items in their brand names continue to outperform more creative marquees. And, the numbers tell us that brands such as Sundown and Pharmavite's Nature's Resource enjoy the larger slices of the St. Johns Wort sales pie. Still, companies that are willing to commit the advertising resources have proven they can gain a significant share of the market with more creative brand names. One example is Lichtwer Pharma, whose Kira makes no reference to the St. Johns Wort that serves as its active ingredient. The company has dedicated more than $4 million in ad support to Kira, which has earned it the No. 4 branded position in the segment. One company seeking to rewrite the book on St. Johns Wort is Pharmaton, whose Movanna mimics products such as Kira only in the two companies' desire to put arm's distance between their brands and a sea of what some call "me-too" herbals. But, Movanna is also chemically different from other St. Johns Wort brands. The new Pharmaton formula utilizes hyperforin as its active ingredient--a more active form of St. Johns Wort than the percent hypercerin formulation featured in all other brands, the company insists. Moreover, Pharmaton has the exclusive rights to the formula for one year. Movanna marks a decided change in marketing strategies, which began for Pharmaton earlier this year with the release of Venastat, a horse chestnut seed supplement purported to promote leg health--a DSHEA-ism (., Dietary Supplement Health and Education Act of 1994) for preventing varicose veins. Indeed, while the company's two major brands, Gingkoba and Ginsana, respectively, continue to pace the gingko and ginseng subsegments, the company's sudden strategic shift seeks to prevent other vendors from cashing in on Pharmaton's work in building an identity for a new product. "We chose the name Movanna so that consumers would think of the brand first, rather than the herb in general," said Dean DiMaria, national sales director. "We're interested in retailers making a lot of money on us and their own private label lines." Indeed, the private label side of the natural care business is attracting a great deal of attention these days. Several chains are making considerable investments in growing their vitamin and herbal store brands--a strategy quite consistent with chain pharmacy's general trend toward branding initiatives these days. Pharmavite will provide a 17-item line for Longs' store label. At Drug Emporium, Bland said the chain will take a wait-and-see approach over the next several months before pulling the trigger on a vendor to manufacture a standardized herbal line to be marketed under the Drug Emporium marquee. "I want to get a sense of how the market is going to turn," Bland said--especially with the likes of Warner-Lambert releasing a gingko in the $ the chain decides to go with a premium or value-priced line. Regional player Snyder's Drug is currently "in the process of launching a six-product private label line in the herbal category," noted senior healthcare buyer Roger Musil, who said the company plans to expand that line at a rather vigorous pace. At Kmart, picking any vendor, much less a private label supplier, requires a rather careful process, especially in a category such as natural care, "where the government has not taken a firm position," said category manager Frank DeLeeuw. "Because we have our own internal quality control department, we have the capability to do in-house testing on anything," he said. "We require any prospective vendor to submit product samples for quality control testing... Everything--especially anything that has our name on it--will meet or exceed our own standards." Leiner Health Products is one company positioning itself to take a lead position in store-brand vitamins and herbals. According to Leiner senior vice president of marketing Robert LeFerriere, while private label sales of vitamin E account for nearly 62 percent of that business, private label currently generates only 18 percent of all herbal sales. "That creates an enormous opportunity gap for retailers to fill," LeFerriere said. "There is a natural migration process that occurs among customers shopping the vitamin and supplement category," he added. "First, products are introduced to the customer through the health food channel before they make the switch to mass retail outlets, where they are typically brought in as nationally recognized brands." Next, as is wont of so many other OTC categories, LeFerriere said that it is only natural for a sizable group of consumers to trade down for the lower price points afforded by private label brands. "The time has never been better for a chain to dominate a category with its store brand," LeFerriere said. "Because consumers have developed such confidence in the name of an Eckerd, CVS or Walgreens, for example, a great opportunity exists for these retailers to leverage their own names in a truly profitable category." After private label herbs, the next big opportunity for drug chains, LeFerriere said, will come in the way of private label premium multivitamin formulations. Indeed, several chains, including Kmart with its One Source brand, and more recently, Rite Aid with its Whole Source (both of which are supplied by Leiner), have made the commitment to a store-brand premium multi. "Why would a chain want to leverage the Centrum name, when it could leverage its own name instead?" LeFerriere posed hypothetically. Glucosamine/chondroitin combo leads vitamin growth With aging baby boomers targeted as the key audience for nutritional supplements, one subsegment that has come from nowhere in the past couple of years to take a leadership position in the vitamin category is the glucosamine/chondroitin supplement and all variations thereof. "Potentially, [glucosamine and chondroitin supplements] could be a $200 million a year business within 12 months," Sundown's Kronrad said. "And, that's by the most conservative estimates." Without question, retailers with whom Drug Store News spoke consider Sundown's Osteo-Bi-Flex the glucosamine/chondroitin market maker. According to some estimates, the brand has generated more than $40 million in sales since its introduction just over a year ago. "Osteo-Bi-Flex has turned out be a $1 million brand for Drug Emporium," Bland noted. Sundown used Marketplace as the launching pad for its first extension of the Osteo-Bi-Flex brand, targeted at both the confirmed user as well as the pill-phobic newcomer. Doubling the potency, Maximum Strength Osteo-Bi-Flex reduces the number of pills per dosage. In addition, the company plans to roll back the retail price of its 48count regular-strength formula to continue to bring new users to the product, Kronrad noted. Further, since glucosamine and chondroitin supplements must be used for several months before discernible results can be noticed, to completely capture the fence-sitting user, Sundown will add another buy-two-and-save value pack for its 120-count SKU. Amerifit, which has made significant waves at retail over the past year or so with its own glucosamine and chondroitin supplement, also added to its line at Marketplace. A new powdered version is available in a 30-count pack of premeasured, single-dosage envelopes-a month's supply. Another company that is putting a great deal of stock into the glucosamine and chondroitin sales trend is Mason Vitamins, which originally launched its own formula two years ago. "The prices consumers have been willing to spend for (glucosamine and chondroitin supplements) are very encouraging," in terms of the health of the category, said Sonia Rodriguez, Mason Vitamins' vice president of marketing and regulatory affairs. In addition, some retailers noted that other glucosamine and chondroitin configurations had performed admirably, including Nutramax's Cosamin DS and Weider's Pain Free line-which the company recently complemented with Joint Free, a hydrolyzed collagen product. Joint Free Plus adds glucosamine and chondroitin. Soy products make impression Another class of natural care products is positioned to cash in on America's aging population, particularly female consumers. Soy-based products and other isoflavonoid phytomedicines targeted at pre- and postmenopausal woman are entering the market from almost every direction. Lake Consumer's Estrex-which it launched one year ago as a homeopathic remedy for the relief of hot flashes and related menopausal symptoms, including vaginal dryness, sleeplessness, depression and irritability-has since been joined by several other entries. Amerfit's Estroven combines soy-derived phytoestrogens with a mix of synergistic vitamins, herbs and minerals to ease the body's reaction to reduced estrogen levels, said Craig Larsen, director of product development and quality assurance. According to Larsen, soy-based products could provide the next big boon for the natural care business. "It's a big market that's only going to get bigger," Larsen said. "We anticipate that it will reach $50 million or more in 1999." Similar to Estroven, Natrol's Bone Protector Plan with Ostivone is positioned for use before and after menopause begins. According to Cheryl Richitt, vice president of marketing, Ostivone, another naturally occurring isoflavonoid, enhances the body's ability to absorb the 200 mg of calcium that rounds out the active properties of the bone protector plan. Natrol's Bone Protector was joined by Selfcare in terms of new isoflavone-based products making their debut at Marketplace. The company's SoyCare line utilizes its own proprietary formulation, Novasoy, to minimize hot flashes, night sweats and other menopausal symptoms. Soy Care Bone Health adds 300 mg of calcium. Novogen, a Marketplace first-timer, is, however, no newcomer to phytoestrogens. The company's ProMensil, a product with a 14-yearold tradition of use in the Australian market, was relatively new to . drug chain buyers at Marketplace. In a flood of similar new product entries, Novogen's point of difference is its composition. ProMensil contains two highly effective phytoestrogens- namely, biochanin and formononetin-not found in soy. Pharmavite also unveiled two isoflavonoids at Marketplace: a 50 mg soy-isoflavone supplement under its Nature Made label and a 650 mg Alfalfa tablet under its premium Nature's Resource brand. Just prior to Marketplace, Pharmanex introduced EstroCare, which combines black cohosh, a highly popular herbal constituent of many women's health dieatry supplements on the market, with Pharmanex's patented CordyMax ingredient, which it derives from the cordyceps sinensis mushroom and continues to market separately under that brand. In Estrocare, black cohosh is used to trigger the pituitary gland to stop producing luteinizing hormones, while CordyMax increases the efficiency of red blood cells in generating increased vitality, endurance and stamina. Together, the two minimize menopausal symptoms and boost the body's ability to deal with the rest. Meanwhile, one herbal segment that many speculated would have exploded by now has actually gotten off to a rather slow start. Most retailers with whom Drug Store News spoke agreed that kava still had not taken a firm hold of the market. However, some continue to hold out hope for the Polynesian plant traditionally brewed into a tea and consumed as a "happy hour" stress-reducing elixir, including the Wall Street Journal, which recently described kava as "poised to become the next blockbuster herbal remedy." Should the Journal's prediction become a reality anytime soon, Natrol should be among several companies extremely well positioned to take advantage. Last month, the company announced that it had been awarded a patent for its proprietary Kavatrol formula, which combines kava root extract with chamomile, hops and schizandra to serve as an everyday relaxant. In addition, the company completed a double-blind, placebo-controlled study just prior to summer, which proved Kavatrol's efficacy in reducing daily stress and anxiety. Natrol has planned a multimedia ad campaign that combines radio, cable television and consumer print to get that message out to the public. Of course, Natrol is not the only natural care vendor waiting for kava to hit it big. NaturaLife, which launched a whole kava supplement in 1996, followed up last January with a standardized extract formulation of the herb. However, a sudden surge in kava's popularity could pose a rather ironic dilemma to natural care vendors in the business, said Sundown's Kronrad, whose company offers a whole herb form, as well as a standardized kava extract and a combination formula under its new herbal XTRA line (see Supplier Buzz, CP94). According to Kronrad and several others, in the event kava suddenly matches the successes of a St. Johns Wort, for instance, the industry could be facing a long-term shortage of raw grade A kava. Since it takes four years for a kava plant to reach maturation, the result could be a rising price in the world market price of raw kava, which could affect the retail price and/or force suppliers to go after crops of lesser quality in order to meet demand. Cholesterol-reducers While the Food and Drug Administration may be against granting OTC switch status to hypercholesterolemia drugs, such as Bristol-Myers Squibb's Questran, natural care alternatives to promoting healthy cholesterol levels--the only OTC hypercholesterolemia options available, since they are beyond the FDA's control, thanks to DSHEA--continue to arouse interest. However, for all of the FDA's attempts to assail one such natural care alternative--and quite arguably, the most successful of them to date--a federal district court judge recently blocked the agency's attempts to classify Pharmanex's Cholestin as an unapproved new drug. Most importantly, the ruling overturned the FDA's imposed import ban of Cholestin's chief ingredient, red rice yeast, which the FDA claimed was the chemical equivalent of lovastatin, a previously existing drug product. According to some industry estimates, Cholestin has generated some $25 million in sales since its introduction a little more than a year ago. The Simi Valley, manufacturer recently completed a multicenter study that established Cholestin's efficacy in promoting and maintaining healthy cholesterol levels. The test was coordinated by Dr. James Rippe, cardiologist, associate professor of medicine at Tufts University School of Medicine and the director of The Center for Clinical and Lifestyle Research. At the time the FDA announced its proposed import ban of red rice yeast, Bionutrics seized the opportunity to remind the public that the FDA's decision certainly didn't apply to its evolvE dietary supplement. Clearesterol, the patented active ingredient in evolvE, is a tocotrienol complex--part of the vitamin E family--purported to reduce elevated cholesterol levels. In early spring, Performance Labs came to market with CardioMax, another nutritional supplement aimed at improving cardiovascular health in general, and more specifically, in promoting and maintaining a healthy cholesterol level. The combination supplement includes chromium, magnesium, vitamin E and taurine, together with a proprietary Chinese herbal formula. Finding the right home for homeopathy While many drug retailers maintain that homeopathy has been a slower moving component of their chains' natural care categories, one leading supplier of homeopathic remedies, P&S Lab's Hyland's division, argued that many people improperly group homeopathy with nutritional supplements--a mistake, company president Jay Borneman said. "[Homeopathics] should be regarded as drugs rather than botanicals," he said. "They are used to treat acute illnesses and are allowed by the FDA to make disease claims. We're trying to get that message out to the chains. If a customer's baby was suffering from teething pain, for instance, she or he probably wouldn't go looking in the vitamin department." For this reason, the company has chosen specific OTC niches for its homeopathic remedies, ideally to position its product against more ethical drug products. The company's line includes Hyland's Clams Forte, which it positions as a sleep aid; Leg Cramps, an analgesic; Teething Tablets, a baby oral analgesic; and Cold Tablets, a cough-cold remedy. In addition, the company plans a feminine hygiene launch later this year. Boiron, another company that has made a considerable commitment to the homeopathy business, shares a similar viewpoint with regard to the subject of homeopathy's natural place in the drug store. Homeopathy has been Boiron's core business since the company was founded more than six decades ago by two French pharmacist-brothers, Jean and Henri Boiron (Boiron entered the American market in 1983). The company has grown to a $230 million-a-year global business, which qualifies Boiron to cast its vote on homeopathy's home at retail, which it insists--just as P&S does--shouldn't be confined to a single homeopathy set either adjacent to, or part of, a natural care department. Rather, homeopathic medicines belong in-line with ethical OTC remedies aimed at specific health issues: pain-relieving formulas should be positioned opposite analgesics, for instance. The company argued that several retailers do quite well merchandising Boiron's Oscillococcinum--the No. 1 selling homeopathic product worldwide, Boiron claimed--in the cough/cold set against the Nyquils and TheraFlus of the world. Multivitamin sales Market share Others 30% Centrum 27% Private Label 30% Flintstones 5% One-A-Day 8% Source: OTC Update (based on mass retell sales through April 1998) . homeopathy sales Market share Others 35% Hyland's 28% NaturaLife 17% Sunsource 20% Source: OTC Update Gingko biloba sales Market share Others 20% Private Label 20% Nature's Resource 9% Gingkoba 34% Sundown 17% Source: OTC Update (based on 12 months of sales ending May 1998) St. Johns Wort sales Market share Others 37% Your Life 7% Kira 10% Natrol 12% Nature's Resource 13% Sundown 21% Source: OTC Update (based on 12 months of sales ending May 1998) Ginseng sales Market share Others 19% Private Label 17% Nature's Made 6% Nature's Resource 9% Sundown 11% Ginsana 38% Source: OTC Update (based on 12 months of sales ending May 1998)

 The growing popularityof herbals and supplements

 1995 $ sales 1996 $ sales 1997 & sales
Item in millions in millions in millions
St. Johns Wort $5 $40 $89
Gingko biloba 38 85 130
Carlic 102 112 123
Ginseng 111 131 152
Echninacea/goldenseal 71 86 112
Saw palmetto - - 45
Pycnogenol/grape seed - - 23
Evening primrose oil - - 17
Cranberry - - 14


Source: OTC Update


 Natural care sales trends

 $ sales Unit sales
 in millions % chng. in millions % chng.
Drug $1, % %
Food 
Mass 
Total 2, 


Source: Information Resources Inc., for the 25weekss ended May
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