After years of stagnation, innovative product delivery forms could breathe new life into children's vitamins sections in supermarkets.
Already, W. Lee Flowers & Co., Lake City, S.C., reports that a vitamin that fizzes in the mouth is one of its strongest movers in the segment, and Bashas' Markets, Chandler, Ariz., notes a gumball multivitamin led as its hottest seller in the segment during much of 2004.
These are bright spots in an area that also holds strategic potential for food stores to foster relations with young mothers and growing families as their household spending expands. There are more and more of these households now that the children of baby boomers are starting their own families.
Whether supermarkets can harness the excitement of new product forms depends on their willingness to embrace the opportunity they bring, suggested Jeff Manning, president, F&M Merchant Group, Lewisville, Texas, a retail marketing and merchandising consultancy. "In health and beauty care, grocers often say, 'We need to see the new stuff' -- then they ask, 'Who's done it? How have they done?' It's not welcoming behavior," he said.
Despite such general conservatism in merchandising HBC, informal observations of chains by SN indicate that buyers are at least testing some of the newer varieties of children's vitamins -- including gumballs, gummy bears, fast-dissolve tablets that fizz in the mouth and fast-melt strips that disappear on the tongue, many in varieties of fruit and sour flavors, to augment the mainstay chewable multivitamins.
Such appeals add to the positive traits that make supermarket buyers see this segment as far more than a junior cousin to adult health care. It is versatile and easily cross merchandised outside of its permanent HBC home with cereals, toys, juice and oral care during much of the year, and with cough-cold remedies during the peak fall-winter season. It also is more stable and less prone to media-induced swings because the products' ingredients lack controversy.
For these reasons, buyers said, the children's vitamin category brings a degree of value to the store that belies its size.
"Mothers are very concerned in early years because children are picky eaters," said Susan Spring, director, health and beauty care and general merchandise, W. Lee Flowers & Co. "With this segment, mothers gain peace of mind because they're able to make sure their kids get everything they need."
The category is also impacted by parents' reliance on trusted outside sources for reassurance, said Sue Vodika, health and beauty care buyer and category manager, Bashas'. "The biggest purchase influences are pediatricians and parenting magazines. People are very cautious in what they buy for kids. They stick with what they know, and that's typically the national brands such as Centrum Kids or Bayer One-A-Day."
There are a lot of cross dynamics in children's vitamins, said Dave Mongillo, health and beauty care category manager, Price Chopper Supermarkets, Schenectady, N.Y. While moms hear authoritative suggestions on what to buy, kids are swayed to try the many different novelty forms that "are different and flavorful, and give the illusion of having candy," he noted.
Despite vocal support, product movement data indicates that supermarkets have steadily lost share of children's flavored chewable vitamins sales over the past four years. The segment slid from $49 million in 2000 to $40.2 million in 2004, an 18% decline, in food stores excluding supercenters, according to the Strategic Planner of ACNielsen, Schaumburg, Ill. Unit sales dropped by 24% during the same period, from 8.5 million to 6.5 million.
By comparison, the food, drug and mass channels combined, excluding Wal-Mart, experienced a 10.5% decline in dollar sales in the period, from $92.2 million to $82.5 million. Unit sales were down by 18%, from 16 million to 13.2 million, the ACNielsen data showed.
Supermarkets could reasonably hold onto more share if they brought in some of the excitement from movies, such as "Scooby-Doo" and "Spiderman," and Saturday morning television such as "Odd Parents" and "Rug Rats," to appeal to children directly, suggested Spring of W. Lee Flowers.
"Whatever is advertised is what the young children want. When the 'Scooby-Doo' movie came out over a year ago, Bayer One-A-Day came out with Scooby-Doo Fizzy Vite, a new fizzy delivery form, and it's still moving pretty well for us. That license is our best seller because of continued media exposure on the Cartoon Channel," she said.
At Bashas', the Vitaball gumball multivitamin by Amerifit "was our hottest-selling item for six straight months in 2004, and it's still hanging strong," noted Vodika.
About 35 of Bashas' 155 stores have extensive adult vitamin sets for specific communities. However, "they appear as mind-boggling assortments to casual users," so the majority of its stores have just a 12-foot set. Children's vitamins have their home within that. To add exposure, Bashas' also clip-strips the well-recognized Flintstones multiple in the cereal aisle year-round, and adds a licensed vitamin whenever it has promotional endcaps of licensed children's toothpaste.
The chain also cross merchandises with cough and cold products in winter, "but not a lot because much of our clientele isn't family-based. The ones that are tend to buy their national brands in Wal-Mart for price. We have smaller accruals and can't get the same deals. Therefore, we have a shortcoming in going after the younger generation with larger families who are middle income," Vodika explained.
Similar to Bashas', Price Chopper seeks a sales lift through secondary displays. Beginning this past autumn, Mongillo said he placed children's vitamins on shelf extenders by juice and cereal, and on clipstrips by toy displays. He has also taken formulas with extra vitamin C and placed them in the cough-cold area.
Mongillo said the displays, along with circular ads and other factors, led to a sales bump that he wants to continue measuring.
He acknowledges there's little element of fun in health care for kids, so the permanent displays tend not to attract youth traffic on shopping trips with mom. Because of that, "kids have to be coaxed. That starts with the Saturday morning television commercials and continues with creative product development that brings new tastes and delivery forms to the segment."
For all the delivery forms he sees, Mongillo said chewables are his mainstay, responsible for 70% of the segment's volume.
Manufacturer innovation can spark segment growth, suggested Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill. "When a new form comes out, not only do kids get excited, but it rekindles interest in parents who feel, 'I should be doing this for my kids.' They want a good item for their children. Even if they don't understand the big picture of why the vitamins are good, they feel at least it can't hurt."
ACNielsen Homescan Consumer Facts data for 2003 show that purchases of children's vitamins skew higher in households with greater incomes and education. For example, households with $70,000-plus annual income index at 151 and account for 29% of the segment's dollar volume. College graduates index at 168 and drive 33% of dollar sales. By ethnicity, Asians index at 176 [4% of dollar sales], Hispanics at 150 [14% of dollar sales], Caucasians at 97 [77% of dollar sales] and African Americans at 76 [9% of dollar sales].
Private-label children's vitamins account for just 15% of the segment's dollar sales and 21% of unit sales, in food stores excluding supercenters, according to ACNielsen ScanTrack data for the 52 weeks ended Dec. 25, 2004. In the adult vitamin, sector private label has a stronger penetration in supermarkets, where it generates 19% of dollar sales and 24% of unit sales, the ACNielsen data shows.
A Convenience Opportunity
Trade sources agree that children's vitamins are a solid convenience opportunity for supermarkets.
"This is one area where supermarkets might even have a leg up on drug," said Jeff Manning, president, F&M Merchant Group, Lewisville, Texas. "A lady shopping for cereal with kids will pick up a national brand multivitamin if it's packaged and priced right and easy to buy. There's no controversy over these products, and people might buy more of it in food stores if the presentation is right."
The importance of categories like children's vitamins goes beyond the sales generated just by those products. Supermarkets that lose business in this segment by not offering customers the products they want, as in many health and beauty care categories, lose high-ring customers to other channels, said Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill.
"With vitamins or any other kind of item taken on a maintenance basis, customers ask why they have to go to the club store to find the 300- or 600-count pack. By not stocking these, supermarkets are forcing people to take trips elsewhere. If they can preempt that discretionary trip, they can retain a lot of food volume."