A GOING CONCERN

PAT NATSCHKE LENIUS

The antidiarrheal segment is offering supermarkets a highly profitable sales opportunity.

Although the category is a small subsegment within the stomach aids category, representing 13% of stomach remedy sales, antidiarrheal products are generating $80 million in sales at food stores annually.

Product introductions accompanied by extensive promotional campaigns by manufacturers and the Food and Drug Administration's approval of loperamide hydrochloride for over-the-counter sales have fueled growth of the category over the past couple of years, retailers

told SN.

Towne-Oller & Associates, the New York-based subsidiary of Information Resources Inc., reported antidiarrheal sales were up 12% in food stores for the 12-month period ended May, 1994.

The sales growth has prompted all but one of the retailers contacted to increase display space for antidiarrheal products.

"We have probably increased space 30% over the last year and a half," said Jim Tate, general manager of M&W Markets, Boise, Idaho.

Big Y Foods, Springfield, Mass., also has increased shelf space, according to Betsy Turgeon, health and beauty care buyer.

"Product introductions in addition to heavy television advertising have caused sales growth of the category. There seems to be more growth in pills and caplets and less interest in liquids," she said. "We have probably added about four or five antidiarrheal type items within the last 13 to 14 months," said Lou Mullins, HBC supervisor at Thrifty Food Stores, Burlington, Wash. "We have had to do some shelf adjusting because of the category growth."

"Imodium A-D has helped the category. It has drawn awareness to the category in the supermarket. We are doing a fantastic job with private label, much stronger business than in the national brands," said Dan Van Zant, general merchandise supervisor at Ray's Sentry Markets, Brookings, Ore.

"There is a lot of profit in private label. We are getting as much profit in private label as in the national brands. Private label is really selling well, equal to Imodium A-D liquid. There are big numbers in private-label caplets. Part of the reason for this is price appeal," said Mullins of Thrifty Food Stores.

John Coker, general merchandise supervisor at Food Giant, Seattle, said retailers do not really need to advertise the category.

"Pricing has come down a little, probably because of demand. The new formulas have enticed consumers to try the products," he said.

Antidiarrheal products are displayed in the antacid/stomach aid section in the stores, retailers said.

"Over the past couple of years, with product introductions, the gastro-intestinal area has grown in sales. As baby boomers get older they are developing more stomach problems and concerns. It seems to be a growing section. I would not be surprised to see a couple more brands come out," said Jim Key, nonfood direct-store buyer at Community Cash Stores, Spartanburg, S.C.

Jim McCarty, nonfood buyer at Brookshire Grocery Co., Tyler, Texas, said tablets or caplets are showing the most growth in the antidiarrheal subcategory, probably because that form is easier for people to take vs. having to drink the liquid. "Advertising has made people more aware that there is something out there to treat the problem. Introductory allowances have made it necessary for retailers to promote the subcategory, probably with temporary price reductions," he said.

"Loperamide hydrochloride is head and shoulders above everything else in its efficacy," said Randy Ongie, key account manager at Millbrook Distribution Services, Johnson City, Tenn., which services stores operated by K-VA-T Food Stores, Grundy, Va.

Loperamide is a "fairly expensive" ingredient and the dollar ring for products containing it is "fairly significant," but consumers are willing to pay it because they recognize the savings in not having to visit a physician to get the prescription in addition to paying for the prescription, Ongie pointed out.

"This mirrors what we have seen happen in other categories such as cough and cold and pain relief. There are big stockkeeping unit proliferations, and good, strong private-label programs. There is a slide from pharmacy sales to over-the-counter sales," he said.

As a result of the ever-spiraling costs for doctor's visits, insurance premiums and prescription drugs, the shift from prescription-only to over-the-counter for many medications is causing people to become more open to the idea of self-medication. That is the strongest factor happening in the HBC category in grocery stores in the last five years, Ongie said.

The antidiarrheal subcategory does not have to be heavily advertised by individual retailers, but a temporary price reduction will be more effective tied in with a coupon drop, he said. "Having the product available is key, especially at flu time," Ongie said.

Mullins of Thrifty Food Stores said that his stores have increased their advertising of antidiarrheal products. "We reduce the price depending on the allowance. Cooperative advertising dollars have been presented to us. We would probably just do regular newspaper advertising instead of coupons."

Antidiarrheal products are advertised but only appear as a line item in the ad, Van Zant said.