H-E-B PUTS BRAND ON DIABETES PRODUCTS

STEPHANIE LOUGHRAN

SAN ANTONIO -- H.E. Butt Grocery Co. here is enjoying strong initial sales from its own line of diabetes care products, H-E-B inControl, according to Scott Delaney, business development manager for generic drugs and over-the-counter medications for the retailer.

"It gives H-E-B a launching pad to get into disease state management," he told SN in an interview last week.

Hispanics, which make up a significant proportion of the population in the retailer's operating area in southern and central Texas, are more prone to diabetes than the general population, according to Delaney.

"It makes perfect sense to have these products," he said.

The supermarket company also offers national diabetes care brands, such as Johnson & Johnson's LifeScan line.

During November, which is National Diabetes Awareness Month, the seven H-E-B inControl products, which include a lancing device, 50-count and 100-count test strips, and a $12.99 diabetes-monitoring starter kit, debuted at pharmacy counters in 160 stores that have in-store pharmacies, said Delaney.

He told SN the rollout has been "extremely successful," garnering 10% to 15% market share within the first month, and generating a lot of interest from the customers.

H-E-B is also developing its own branded syringe line for diabetics.

"We're really starting to focus on our disease state initiative," Delaney said, adding that he hoped the supermarket chain could develop similar ventures with products used to treat other diseases.

By the middle of 2002, Delaney said the 160 stores plan to have a four-foot diabetic care set in a patient-friendly display, instead of behind the counter, "where they will be able to feel the products and hopefully generate more questions to the pharmacists."

Gregg Johnson, vice president of consumer health care, Home Diagnostics Inc. (HDI), Fort Lauderdale, Fla., said this particular private-label offering builds brand equity in a growing category, gives H-E-B substantial profit margin (45% to 55%, according to Delaney), and passes 30% to 40% savings onto the consumer compared with national brands.

HDI, the supplier of the H-E-B inControl products, is also developing similar private-label health care products for Hy-Vee, West Des Moines, Iowa, and Publix, Lakeland, Fla., according to Johnson. The company also has co-branded diabetes management tools with Winn-Dixie, Jacksonville, Fla., under the Medic name.

Private-label diabetes care products offer retailers a chance to market their brand daily, since most diabetics use their blood glucose monitors twice a day, Johnson pointed out.