Vitamin Mineral Supplement Retailers Articles & Resources

Fortunately, vitamin C, a much higher volume segment of the supplement category, continues to grow at a little more than 4 percent in drug and 8 percent across all retail channels. Similarly, homeopathy has begun to show encouraging growth signs (see story this page).

 Homeopathy finds home in mass retail
 $ Sales % Change $ Sales % Change
 in millions in millions
 Total F/D/M other channels [*]
Homeopathic
remedies $ 4% $ %
Source: SPINS and ACNielsen for the 12 months ending Dec. 1999
(*.)., Health food stores, natural product market
 The dollars in natural cold care
in drug in food, mass, drug
Segment $ Sales % Change $ Sales % Change
 in millions in millions in millions
Vitamin C $ % $ %
Echinacea 
Zinc mineral
supplements 
Zinc cold
remedies 
Zinc nasal
spray 
Zinc throat 1, 1, 3, 
Iozenges
Source: ACNielson
(*.)52 weeks ending Jan. 22, 2000

Homeopathy stakes a claim in cough-cold territory

Homeopathic remedies represent only a small piece of the natural health business, ringing up a little more than $90 million in sales through mainstream and alternative retail channels combined, according to data provided by ACNielsen and SPINS.

But it is a segment that is beginning to find its place on the shelves at mass retail outlets, particularly where homeopathy intersects with the cough-cold category. Sales of homeopathic remedies were up 4 percent in food, drug and mass, according to ACNielsen/SPINS. Retailers attribute at least part of that growth to activity on the cough-cold front.

According to some chains--including one retailer who in early December described homeopathy as a "major wild card" in projecting seasonal cough-cold sales--the timing might be right for homeopathy. The niche carved out by mass retail brand leaders Boiron and Hyland's has been widened by the entry of newer players. One major success has been Gel Tech's Zicam, which launched in January 1999, but didn't really gather momentum until November, when the consumer press jumped aboard its clinically demonstrated efficacy in reducing the duration of the common cold (for more, see Supplier Buzz).

"I'm watching this really closely," said one category manager. "Is the timing right for homeopathy? Maybe." The retailer added that within days of USA Today's Nov. 1 story on Zicam, "We blew out of what stock we had on hand." According to Gel Tech president Hank Landau, Zicam generated more than $8 million in fourth quarter sales, and the bulk of that came in the wake of the USA Today story, he said.

It appears that this might just be the homeopathy category's big breakout season in the big leagues of mass retail. Certainly the favorable press helps. Recent natural health retailing history dictates that all boats rise on the tide of consumer faith generated by the media. According to Ambroise Demonceaux, director of marketing for Boiron, the company is just beginning to reap the fruits of two years of massive public relations efforts. "This cold season we have already had 66 feature stories done on Oscillcoccinum on the news and TV talk shows," he said. "It seems that every time [the news media] did a story about the flu, they talked about the prescription drugs that were available as well as the OTC options--and almost every time, Oscillo was there. Last year we had 28 news features."

Of course, one major reason for the relatively slow growth of the homeopathy category is the inability of these suppliers to bear the cost of winning the hearts and minds of mass-market customers. "The major reason why homeopathy had been underperforming in the United States was that the category was lacking marketing support," said Demonceaux.

But given the limited size of the . homeopathy business, in general, as well as the size of the companies that play in this space, competing against traditional OTC suppliers is an uphill climb, Demonceaux noted--a view shared by at least one of Boiron's direct competitors. "Brand-building dominates the cough-cold category as much as any other category in the store," offered Hyland's president, Jay Borneman. "Ad budgets drive sales, and ad budgets control shelf space--McNeil's monthly advertising budget is bigger than my gross sales," he said.

Still, the homeopathic business has made significant headway into mainstream channels over the past year. This is true especially as more retailers, searching for new revenue sources to offset diminished growth in certain natural health segments, have committed to developing the category.

The fact that homeopathy requires a long-term commitment from the retailer is yet another point on which suppliers seem to find agreement. "It wasn't our plan to get 100 percent distribution," said Boiron director of sales John Durkin. "We only wanted to partner with the chains that were interested in taking the product and growing business."

For these "more savvy retailers," as Borneman calls them, the long-term prognosis seems most favorable, based on consumer loyalty figures among health food shoppers. While the first-time trial rate is rather low on homeopathic remedies, Borneman noted, "The repeat business is quite good."