Oral care is a dynamic category for retailers, with many exciting new products, and heavy marketing support from the manufacturers to drive sales.
retailers and wholesalers to talk about oral care. The moderator was Glenn Snyder, who is well-known for his expertise in nonfood and has received a Lifetime Achievement Award from GMDC.
In the roundtable, the participants discussed a wide range of topics pertaining to the oral care, including shelf space and selection, promotion and advertising, and products such as power toothbrushes, breath strips, whitening systems and floss.
The participants in the roundtable were:
David Benedetti, director of pharmacy/HBC category manager, D&W Food Centers, Grand Rapids, Mich.
Larry Carnes, HBC category manager, Valu Merchandisers Co., Kansas City, Kan.
David Lowe, director of GM/HBC, K-VA-T Food Stores, Abingdon, Va.
Mike Juergensmeyer, vice president, nonfoods and pharmacy, Schnuck Markets, St. Louis.
Sue Vodika, HBC category manager, Bashas' Markets, Chandler, Ariz.
SNYDER: Oral care is big, growing and complex, flourishing with new products and new subcategories. And it has a great future. As the population ages, everybody worries about the health of their teeth and gums. Then there's the beauty side: personal appearance, white teeth. You've got to have white teeth. That's what millions and millions of dollars in advertising are calling out. And millions of people are responding.
Thanks to its dynamic character and widespread usage, oral care is the gateway to optimizing HBC sales. And oral is quite profitable. With much higher retails than just a few years ago, the profit per unit sold is excellent, a far cry from three for $1 toothbrushes. It would take a lot of sales of Campbell's Tomato Soup to equal the profit from a single $5 toothbrush.
I should mention that there's more than opportunity with oral care. There's also challenge. I don't know whether you're aware of it, but drug stores are moving ahead into toothpaste and other oral categories where supermarkets have held sway for decades. Drug store toothpaste sales are growing at a faster rate, up 15% during a recent 12-month period, while supermarkets were under 2% in growth, according to ACNielsen.
Now to start the discussion. Let the panelists talk a little about their companies' involvement in the oral care category.
JUERGENSMEYER: I'm vice president, nonfoods and pharmacy, for Schnuck Markets. We have 100 stores and we're putting in 40-foot oral care sections in our new units. The whole drug department is about 280 linear feet.
CARNES: We cover a diverse selection of stores, dealing mainly with independents as Valu Merchandisers based in Kansas City. We're part of Associated Wholesale Grocers. We service many non-AG members, but we deal mainly with the independent food trade. We service anywhere from a convenience store to 20,000-square-foot Price Choppers. I'm a category manager, one of three in HBC. Oral care has been one of our driving forces. The biggest obstacle we find with independents is speed-to-market and maintaining the planogram. When we do get the planogram programs in the right stores, they do see the value of it. But it is a struggle trying to get space away from our grocery brothers and sisters.
VODIKA: Bashas' Markets has 137 stores, several opened recently. Oral gets about 30 feet in our stores with pharmacies, about 24 feet in many other Bashas' stores, and only 12 feet in small stores.
LOWE: Shelf space in oral care in our stores ranges from 16 to 24 feet in most of the stores. We have a couple of 32-foot sections that are in former Winn-Dixie stores that we took over. We'll have 90 stores finished by October. We've changed the way we do category management for oral care. Before, when our assortment seemed too high, the slow-movers on the bottom were simply chopped off. Now we examine the items more carefully with an eye to demographics and uniqueness. We found some astounding news along the way: The No. 3 oral item in many stores is a denture spray.
BENEDETTI: I'm pharmacy director of D&W Food Centers in Michigan. We have 25 stores. Most of them run 16 feet in oral, some are 12 feet and we have a couple of 8-footers that are definitely too small. But that's the only space we have available in small stores.
SNYDER: Shelf space is no problem at Schnucks when you have 280 feet for HBC.
JUERGENSMEYER: We have over 800 SKUs [stockkeeping units] in our oral care department, so we are over-SKU'd. Too much chaff. Eight feet for toothbrushes is probably more than we should have. That's a problem right now. We must make sure our assortments are controlled because otherwise your inventory goes through the roof. BENEDETTI: We don't carry a lot of SKUs. How many different flavors of the leading brands do you really need on the shelf?
CARNES: We should be strong in assortment, but sometimes it gets a little crazy. One leading brand has just come out with refill heads that wouldn't fit on their other power brush and we have to have the new handles, too. Our stores range from up in Chicago to down to Albuquerque, so the demographics are all over, which makes it necessary for some stores to carry bigger assortments in different areas. Four feet for denture won't cut it in some areas, while 8 feet is probably too much in others. In our typical "A" stores, we have 20 feet just for toothpaste and brushes and 12 feet just for mouthwash and 4 to 8 feet for denture.
SNYDER: Suppose you need 4 feet more for oral care. Where would you look to steal that space?
LOWE: For me, today, it would be vitamins.
BENEDETTI: Exactly the same thing. I inherited a natural line of vitamins, and that's gone down.
SNYDER: Yeah, and it used to be a really terrific section. Just four years ago I had a roundtable on vitamins, and boy, it was going great guns. Four-foot sections were growing to 8 and then on up to 16. OK, you want to grab a piece of vitamins for oral, but if the vitamin section is not immediately adjacent, it's difficult, if not impossible, to work with. You need a whole new planogram or you have to start with a new store.
LOWE: Right. Vitamins are near the pharmacy right now in our pharmacy stores and oral care is in the aisle. So it's really not a place where I can take the space. But vitamins is the one place I'll identify as the slowest-moving product that we could take some space from.
SNYDER: What's your opinion on the best location for oral -- near the ends of gondolas, or in the middle of the department as an effort to draw shoppers inside?
JUERGENSMEYER: We normally keep our ends to analgesics and health products, close to the pharmacy. Oral care falls in the group over by the beauty center, on the end part of it, though. But remember: 100 stores, about 90 different setups. But for me, oral care is fine in the middle.
SNYDER: What about power wings? Are you using power wings as a way, beyond promotion, to get added permanent shelf space for a line of goods like power toothbrushes?
VODIKA: Power wings are used for long periods of time whether the items are on deal or not.
CARNES: We like power wings because most of our stores have a clean floor policy, so many displays can go on power wings or sidekicks. We have several in most of the stores, but it's mostly on an in-and-out basis. You know, it may be up for a month or it may be a different item the next month.
LOWE: I've got two so far as part of a new effort. I'm not pushing them yet, though. The endcap we're installing now actually has an area where you can hang power panels. I'm also trying to use that little bit of space that holds the rack up to put hooks on it. Mostly, the wings are for new items like the power toothbrushes, which would stay up for about a month before going on the shelf.
VODIKA: The minimum number of power wings for each of our stores is probably 10 and I have as many as 30.
BENEDETTI: Power wings? Never use them. Company policy.
SNYDER: About manual toothbrushes, they used to sell promotionally at three for a buck. Now it's three bucks or more for one. Are you pleased with the way things are going with toothbrushes?
VODIKA: Many of the manual toothbrushes are catering to the children with the designs, but overall, they're all selling very well. People are brushing more, taking better care of their teeth. And all this is being prompted in large part by the major manufacturers who are educating the customers in their ads. I have companies coming to the table now with actual ad copy that talks about total tooth care, start to finish. You start with your toothbrush, then your rinse, then your floss and then your whitener. And then, if you'd like, you can use some at night. And when you run those kinds of ads, it gives a real lift to oral care.
CARNES: You mentioned low-priced toothbrushes as being old hat. Well, in some of our stores we go down to four for $1 and they sell like crazy.
SNYDER: What about the flood of new items in oral care?
VODIKA: It's constant. You have to do an update four times a year now. It's been full of innovations; it's been great. It's a real break for a retailer if you can work fast enough. It's been a growing category and it hasn't stopped yet.
JUERGENSMEYER: It is very costly in labor when you have all those changes. And because of the turnover, you never get the credit from the manufacturer on the full price..
LOWE: The items that we put in are getting heavy advertising, because you've got the big boys throwing money at them.
CARNES: They're advertising the new items even before they ship. Over the last several years, you've seen Colgate and P&G battle it out. We get stuck in between sometimes and then it's a big question over who's going to have the lower price on a toothbrush.
VODIKA: What better place to be stuck? Between two major manufacturers fighting to be No. 1!
CARNES: True, true.
SNYDER: How are you promoting oral these days?
JUERGENSMEYER: With advertising. Shippers are OK if the ad is on a long-term -- two-week -- promotional; otherwise it's too much product for any particular store in any one period.
CARNES: We usually try to tie in with shippers at our trade shows. Shippers that have little shopper interest can overload a store, you're right about that. And that especially goes for toothbrushes. So we'll try to tie in good items with the shippers.
SNYDER: Does anybody have a clean floor policy that keeps shippers out?
LOWE: Yes, I do. I inherited that, but I do have an endcap exclusively for HBC. It's built beautifully, and it's for HBC only. I use that for the toothpaste or whatever. We do a month-long ad and we also have weekly specials in ads. I usually put my toothpaste on the month-long ads, and I get real good lift from it.
JUERGENSMEYER: We've done that, too. Once in awhile, a one-week ad, sometimes a six-week ad. On the negative side, it's really dropped my margins down for the year. I don't know if it's the best thing for us. I don't know about sales, but it's hurt my margins.
LOWE: I've used advertising mostly for the consumables -- toothpaste, deodorant, shampoo. I'll put one of those in the month-long and then I'll hit it with a hot new item like Claritin in a weekly ad when we'll pop 'em real hard to get shoppers real excited. I should say that our clean floor policy allows exceptions for a real hot item like Claritin. When we had a big launch like Total [toothbrushes], I put up a lot of floorstands. I have the option, but I wouldn't use it necessarily with a power toothbrush intro.
BENEDETTI: We're the same. Clean with exceptions if they make sense. But they had better make real good sense.
SNYDER: Moving on, let's talk about the whiteners.
BENEDETTI: Whiteners are doing OK. They're holding their own, considering they're being footballed by Wal-Mart.
VODIKA: They're more than hot. They're smoking.
JUERGENSMEYER: The best thing that happened to whiteners was when the two giants collided and brought prices down.
SNYDER: How do you display the whitener systems?
JUERGENSMEYER: Top two shelves.
CARNES: We've tried to pull all our whiteners this past year into their own subsegment at eye-level or above, and it's helped quite a bit. I just saw the new Crest Whitening strips, and Rembrandt has a new fast-change product and so does Colgate. I mean, how many do you need?
LOWE: We're going to have to look at it a little closer because of space limitations. I can't carry everything, obviously. And so many items being launched -- everybody's trying to get into the whitening act. They are not necessarily performing like they did when they started.
VODIKA: Whitening is a huge category. I don't carry everything, but with 12 feet, I can carry the big guns from the major companies. I have every one of those.
CARNES: One line that has gone slow with us, to some extent, are the dental gums. They've been hit hard by the Tridents and others at the front end. But I've got to hand it to them, when they first came out they really took off like gangbusters.
SNYDER: What about breath strips?
JUERGENSMEYER: Lots of activity. Scope's coming, private label, Altoids. Certs is coming.
VODIKA: As far as my strips are concerned, there's no problem with Listerine PocketPaks. My strips are doing fine and they're currently over in oral care.
CARNES: There's a new product out there that's upsetting me. Same items, same costs, but two different UPCs. They want one item on the front end with grocery confections and the other in oral care.
VODIKA: Another manufacturer is doing the same thing. They're calling on two different buyers.
JUERGENSMEYER: That kind of stuff made us put our foot down. There is no reason to have multi-packs in our department and single packs in their [grocery confections] department up front.
CARNES: Exactly. It's too confusing at store level.
VODIKA: You just lose it and grocery gets it.
SNYDER: How are breath strips holding up for you? LOWE: Very well. The cinnamon is going to be another winner.
VODIKA: The first one out tasted terrible to me. But it sells and now Listerine has a new flavor. It's milder, doesn't take your breath away. And then they're going to have cinnamon ones.
CARNES: I think the one thing that really helped the breath strips is that it's such a fad item with kids, high school kids. You can't chew gum in class but they can have one of these in their pocket all the time.
SNYDER: What about breath strips that make no health claims, the ones that are really just breath fresheners like mints and usually sell with the confections in grocery?
VODIKA: We bought 100 shippers of the small little packs in cinnamon flavor at the show last year, and grocery said, "Don't ever do that again!"
SNYDER: What can vendors do to be more helpful in oral care?
BENEDETTI: Bigger allowances. And taking back stuff that fails.
SNYDER: Anybody else with an opinion? No? Dave, you've said it all, I guess. Coming to oral subcategories, how are flosses doing?
JUERGENSMEYER: My dental sales actually are slow, but my dental appliances are up -- flosses and accessories.
LOWE: I like the new Reach with floss in a handle. It actually changed the way I floss. It started the minute I got their samples and I thought, this is so cool, and then my entire family is flossing. They won't admit it, but they're liking it, too. I admit I didn't floss every day, but I do now.
SNYDER: It's a great item, but in a fairly large package -- so where should it be displayed?
VODIKA: That's the thing with those flossers. There's so many of those picks and things. They're doing the volume and the turns, and the picks, in particular, are enormous.