Retailers are praising the fruity, sweet essences emanating from the shelves where they showcase value-priced shampoos.
Major suppliers with low-price brands have added new lines featuring fruit flavors and botanicals, which they say appeal to today's more sophisticated tastes for "natural" products.
This year Alberto-Culver's VO5 and Suave from Helene Curtis both rolled out lines called Naturals, and Gillette has added Essentials to its White Rain.
"These new lines have been strong with all of the companies, and the botanicals are stronger right now than the mainstream products," said Wyman Butler, health and beauty care buyer at Harvey's Supermarkets, a 40-store chain based in Nashville, Ga.
"The botanical Suave came out about six months ago. It is doing great," he added.
"The new introductions are all doing very well, including the fruits, herbals and botanicals," said Karen Blakey, buyer-merchandiser for HBC at Spartan Stores in Grand Rapids, Mich., which services 500 stores.
As retailers report, all of these introductions have gained strong consumer acceptance and are boosting sales in value-priced shampoos at supermarkets. For the 12-month period ended Aug. 31, 1995, sales of VO5 totaled $26 million, a 14% jump from the year before; Suave was up 7% to $62 million, and White Rain edged up 2% to $31 million, according to Towne-Oller & Associates, New York.
Overall shampoo sales at grocery store, meanwhile, rose just 1% during the same period, with a total dollar volume at $739 million, Towne-Oller reported.
Randy Arcenaux, director of sales and marketing at Church Point Wholesale Grocery Co., Church Point, La., which services some 50 supermarkets, concurred that botanical-scented shampoos are on a fast track.
"White Rain Essentials is outstripping the original White Rain," he said. "It's because there is such an enticing new variety of scents and colors. They present a more upscale, more professional image."
Botanicals have added variety to what is a price-driven commodity that produces the bulk of sales volume for many chains.
"For us, the value brands do far better than the premium shampoos or the middle-of-the-road products," said Alan Karpe, director of health and beauty care and pharmacy at Valu Food, Baltimore.
At Harvey's, the value-priced segment comprises between 55% and 60% of the chain's shampoo sales, Butler said.
The total of Suave, White Rain, VO5 and Appearance, from RC International, Omaha, Neb., represents about 85% of all shampoos sold through Church Point, Arcenaux said.
Despite relatively low margins for the big-three value-priced shampoos, retailers say they make up the profit difference in the segment's high turn rates.
Karpe of Valu Food said the segment acts as a destination category in drawing foot traffic into the HBC aisles.
"Even though they are low-margin items," he said, "we make up the number in terms of volume. It [the value-priced shampoos] is a destination category."
Suave and White Rain are the ones that pull customers into the stores, Karpe said. "Customers are price-sensitive to these brands. If we can meet their expectations, we can make a merchandising statement and drive customers into the store. Then they will shop in other areas," he added.
Butler of Harvey's said the bottom line is achieved just as quickly with the value-priced shampoos as with premium brands.
"You get so many turns of a low-priced item to make up the difference in the profits," said Butler.
Retailers surveyed by SN agreed that price sensitivity far outweighs brand loyalty for consumers who routinely purchase the value-priced brands.
"Most consumers select these products by price," said Randall King, nonfood buyer at Byrd Food Stores, Burlington, N.C. "If you raised the price on one item by 10 cents, you'll see the sales drop in that item."
"People aren't really loyal to these brands," said Mark Beyer, HBC buyer at Copps Corp., Stevens Point, Wis. "Sales will swing back and forth among the leading brands, usually depending upon what is on sale."
"Suave and White Rain are our leaders in the value-priced category," said Blakey of Spartan Stores. "But consumers buy those brands based by what is on sale a particular week."
Consequently, promotional programs are used extensively to drive sales in the segment.
"We do special promotions on our destination shampoos," said Karpe. "We sell them at what we call super hot power values. The sale runs about four times a year and the product is featured on the front page of The Baltimore Sun sale insert. We run the product at below half-price."
Copps Corp. promotes Suave, White Rain and VO5 about four times a year at significant price reductions, Beyer said.
"Even though we sell them at an everyday low price," Beyer added, "we still come down on the price in the leading brands. They are usually about a dollar a bottle, but we can still promote a bit lower than that."
Copps uses newspaper inserts, in-store fliers and Sunday circulars to advertise the specials. And the featured product is displayed on endcaps during the promotional period.
Church Point's supermarket customers run 97-cent specials on the value-priced shampoos about once a month, Arcenaux said. "We rotate the brands that are featured. The products are stacked in cut cases or in off-shelf displays. We also add signage to the HBC area of our stores.
"Even though the margins are lower, our stores are not going to fight Wal-Mart on price. They might carry the value-priced shampoos at $1.19 or $1.29 on an EDLP basis. But the product is still considerably less expensive than the Pantene or Head and Shoulders standing beside it. Those brands are in the $3.79 to $3.99 range," Arcenaux said.
Byrd Food Stores is the exception to most chains in that it doesn't run specials in the value-price segment. Instead it has an EDLP program and merchandises one of the value-priced brands on a permanent endcap, King said.
"We do not try to compete with the mass merchandisers on price. But we price to compete with Winn-Dixie and Food Lion, our two major competitors," he added.
Harvey's has focused on Suave in its promotions.
"We set up special deals with the manufacturer and got excellent advertising support," Butler said. "We were able to buy at a bulk rate so we could run a $1.19 Suave and feature it for 69 cents. Those deals really got the product rolling for us and grew our business." The chain plans to run a similar special promotion with VO5. "It will be a one-week-only special price. And I expect it to work very well," Butler said.