WELLNESS TOP OF MIND FOR HBC, GM

Consumers' aspirations to stay healthy are evident in this year's rankings of nonfood categories from Information Resources Inc. data. The top volume categories are all health and beauty care items — internal analgesics, vitamins, toothpaste, cold/allergy/sinus tablets and sanitary napkins — which supermarket retailers have been presenting in more attractive and accessible ways.

Four of the five top gaining categories also have a physical wellness component: hair conditioners, suntan lotion, mouthwash and skin care. Hair accessories was also on the list of increasing categories, a mark of the active lifestyles of female shoppers. On the other side of picture, photo supplies accelerated its continuing decline.

One category not tracked by IRI for sales, but one which it has studied extensively, is pharmacy. At $28.8 billion, this is one of the biggest categories in supermarkets and it is growing strongly, at 4.3%, according to the National Association of Chain Drug Stores, Alexandria, Va. Pharmacy continues to be the hub of wellness efforts in stores that offer it.

LARGEST SALES $$

Internal Analgesics

The mature internal analgesics category had been steadily declining in supermarkets for the past few years, but now numbers are up. Aspirin therapy, a preventative measure against heart disease, has gained mainstream popularity in the medical world and subsequently with Baby Boomers. Marking aspirin therapy's “arrival,” last August Dr. Mehmet Oz talked about the benefits of the practice on the Oprah Winfrey show, saying that taking 162.5 milligrams of aspirin helps skin and reduces arterial aging by 36%, especially for men over 35. The active aging population in the U.S. is in need of over-the-counter pain relief as well.

LARGEST SALES $$

Vitamins

Overall, vitamins are up, although supermarkets are lagging behind drug stores and mass merchandisers in sales. The category is gaining in popularity as pharmacists take a more active role in consumer health care, often recommending products like fish oil for improved cholesterol levels and as an aid to cognitive brain function. Manufacturers are offering more creative delivery systems like liquids and gummy candy that appeal to kids and those who don't like swallowing pills. In addition, the U.S. Food and Drug Administration finalized a set of Good Manufacturing Practices for vitamins and supplements in June, likely to raise consumer confidence in product safety. As many supermarkets are looking into pharmacist-administered medication therapy management and storewide health and wellness initiatives, grocers should be able to catch up with their vitamin-selling counterparts.

LARGEST SALES $$

Toothpaste

Toothpaste, which has been in slight decline the past few years, is picking up as it rides the wave of health and wellness. “Oral care is a part of the current broader health and wellness culture,” consultant Jim Wisner, president of Wisner Marketing Institute, Libertyville, Ill., told SN. As Baby Boomers try to maintain their health and Gen X and Yers try to stay young, manufacturers are enticing them with promotions like the “Five Steps to a Healthy Smile” signage that Procter & Gamble, Cincinnati, provided to Bashas' Markets, Chandler, Ariz., at the end of 2006.

LARGEST SALES $$

Cold/Allergy/Sinus Tablets

The cold/allergy/sinus tablets category has apparently recovered from the hit it took from most products containing pseudoephedrine (PSE) being pulled behind the counter and is still going strong. Part of the reason for this is because of products like Sudafed PE, the reformulation of Sudafed that is able to stay out on shelves. Consumers have accepted such new formulas with replacement ingredient phenylephrine (PE) and are buying them in large numbers. Meanwhile, some products containing PSE are still selling from behind the counter, thanks in part to heavy advertising by manufacturers like Schering-Plough HealthCare Products, Summit, N.J. Its Claritin DM, with PSE, was a big seller.

LARGEST SALES $$

Sanitary Napkins/Tampons

After last year's 6.2% sales decrease in supermarkets for sanitary napkins and tampons, grocers seem to be slowing category l0sses, but still lag behind other channels. Because most types of stores are open late, consumers, although looking for convenience, will still make multiple stops for certain products. For this category, it seems grocery's core demographic is often looking elsewhere. However, supermarkets have increasingly been carrying a variety of women's sexual health and well-being products, and moving them from the pharmacy area to the sanitary napkins and tampons aisle, creating a much-needed oasis for women's personal products in the HBC area.

TOP SALES GAINERS >>

Hair Conditioners

While hair conditioner sales went up 5.4% in supermarkets this year, shampoo sales rose only 2.17%. However, shampoo and conditioner combo packs, a subcategory of shampoo, reached a dizzying 72.8% in sales gains. It seems consumers like the value of buying combo packs but use more conditioner per shower and buy extra bottles to fill in. In addition, celebrity worship seems to have played its part. Sleek hairstyles were popularized this year by reality star Nicole Richie's side-swept bangs, singer Rihanna's stick-straight locks, and smooth bobs from former Spice Girl Posh Spice and actress Katie Holmes.

TOP SALES GAINERS >>

Suntan Products

More than 1 million new cases of skin cancer will be diagnosed in the United States this year, according to the Cancer Research and Prevention Foundation, Alexandria, Va. Similarly, the Shade Foundation of America, Scottsdale, Ariz., has found that the incidence of melanoma more than tripled among Caucasians worldwide between 1980 and 2003. With this news, consumers are buying sun care products regularly and manufacturers are offering a multitude of choices. For example, companies like Neutrogena and L'Oreal are making innovative formulas that block aging UVA rays. In the past, emphasis has been on cancer-causing UVB rays only.

TOP SALES GAINERS >>

Hair Accessories

Supermarkets are ahead of the other channels on sales gains in hair accessories, showing that busy shoppers will gladly opt for the supermarket selection if it's available. Popular manufacturers like Scunci and Goody released both practical and sporty innovations including headbands with rubber no-slip gripping as well as more glamorous fare, like silk head scarves, meeting a variety of needs.

TOP SALES GAINERS >>

Mouthwash

Mouthwash touts prevention, a big theme in the health and wellness culture of the U.S. Procter & Gamble's Crest Pro Health, introduced in 2005 with a $100 million advertising campaign seems to have evolved into larger territory and sales on supermarket shelves in 2007, along with that of the category leader, Listerine. Whitening Pre-Brush Rinse from Listerine was introduced shortly after Pro Health and the visibility of both has had a positive pull on the entire category, including private-label brands.

The top nonfood category tracked by IRI, internal analgesics, doesn't break the billion-dollar mark, but not to worry, four untracked blockbuster categories do. Pharmacy reached a huge $28.8 billion, fuel hit $14.5 billion, greeting cards get $2.6 billion and magazines are at $2.1 billion.

• PHARMACY — The National Association of Chain Drug Stores, Alexandria, Va., prepared year-end 2006 data from IMS Health, Norwalk, Conn., to find that supermarkets made $28.8 billion in pharmacy alone. The entire retail industry made $249.8 billion, leaving supermarkets with an 11.5% share. Mass merchandisers represent 9.7%, with independent pharmacies at 17.4%, mail order at 20.2% and chain drug at 41.2%. Supermarket sales grew 4.3% from last year. Good news, the boom is expected to continue, said consultant Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill. “There is increasing awareness of the value of drug therapy,” he said. In addition, as supermarkets get better at the business of pharmacy, manufacturers continue to launch new products. “It should be continued growth for a long run.”

• FUEL — As more supermarkets strive to be consumers' one-stop shop, they're selling the fuel needed to get there and back. The number of supermarkets with fuel centers has increased 12% from last year, to 2,203, according to EAI Inc., Westminster, Colo. In addition, a number of supermarkets including H.E. Butt Grocery Co., Kroger, Meijer and Supervalu are offering alternative fuels like ethanol-based E-85 and biodiesel while grocers like Giant Eagle aggressively promote fuel with their fuelperks! rewards. The effort has earned supermarkets $14.5 billion this year, according to EAI.

• GREETING CARDS — With competition from e-cards and photo greeting cards, made at home or through a photo service, the traditional greeting card industry is defending its turf. Supermarkets alone have $2.6 billion of the greeting card/gift wrap/party goods market, according to the SuperStudy of consulting firm Willard Bishop, Barrington, Ill. Hallmark estimates that the greeting card industry represents $6.6 billion in total retail sales and is keeping those numbers high with innovations like its new “Pop Goes the Culture” line, featuring often-repeated sayings from television shows, sports, politics, movies and personalities. American Greetings has a new line featuring comedian Ellen DeGeneres.

• MAGAZINES — Supermarkets have $2.1 billion of the magazine market, according to consultancy Willard Bishop. Based on numbers released by the Audit Bureau of Circulations, Schaumburg, Ill., and BPA Worldwide, Shelton, Conn., total single-copy magazine sales were up 1.6% in the second half of 2006, according to a report on the numbers from Harrington Associates. Although talk of online magazines might have had the industry nervous, it seems celebrity weeklies and content that remains differentiated from print to online are keeping paper customers reading.

TOP SALES GAINERS >>

Skin Care

Facial anti-aging in supermarkets is up 13.1%, the most of any subcategory. Supermarket retailers have been making an effort to provide shoppers, especially Baby Boomers, with a relaxing HBC aisle that carries both scientifically advanced and all-natural facial anti-aging products. On the natural end, retailers carry lines like Burt's Bees with a Royal Jelly Eye Creme and L'Oreal with Transformance Skin Perfecting Solution. Results-driven consumers are likely to be testing out a variety of products for themselves.

TOP SALES DECLINERS

Photo Supplies

Supermarkets are morphing from a convenient place for photo processing and film purchases into a way to pick up digital prints that were ordered online. Offering photo storage and sharing though the Web is one of the ways grocers have slowed the inevitable crash of photography sales brought on by the digital camera. Digital photo kiosks and digital photo workshops are other proactive solutions.

TOP SALES DECLINERS

Shaving Lotion/Men's Fragrance

Supermarkets are the furthest behind in this category. While women are still the primary grocery shoppers, the dawn of the metrosexual may mean men want to pick out their own fragrances at specialty or department stores. In addition, as of 2000, 48% of households in the U.S. were unmarried, according to DivorceMagazine.com. As such, single men might be forgoing lotions and fragrances or, again, buying them in more specialized stores.

TOP SALES DECLINERS

Office Products

Correction products are down the most in this category, by 7.1%, thanks to the PC's word-processing abilities but products like ink and printer paper, which are much needed by the PC, are still being bought from office specialty stores. To win back some share, some supermarkets, like Giant Eagle, have partnered with ink cartridge refill services while others, like E.W. James and Sons Supermarkets, Stop & Shop Supermarket Co. and Safeway have implemented Staples-branded store-within-a-store concepts.

TOP SALES DECLINERS

Baby Needs

Although new parents inevitably have to make supermarket trips, drug stores are gaining ground in baby needs. When a new bundle of joy arrives, parents are likely to stick to the book, and buy HBC items for their baby in an environment where they expect to find the biggest and best selection. Supermarkets like Meijer and Food Lion have organized baby clubs to offer new parents information, support and low prices.

TOP SALES DECLINERS

Deodorant

Supermarkets' lag in deodorant might be due to the age-old lack of shelf space. What's new in deodorant is a variety of fragrances: Axe for men has deodorant body spray in four scents; new Secret Scent Expressions come in Brazilian Cherry, Arctic Apple, Vanilla Chai and Kuku Coco Butter, and Procter & Gamble is also selling body sprays. Colgate-Palmolive's Lady Speed Stick now comes in more than 20 fragrances, including Caribbean Cool and 24/7 Satin Pear. Finally, Dove's new Smooth Cashmere has notes of jasmine, peach and vanilla.