HBC SECTIONS PREPARING FOR NEW OTC ANALGESIC

MICHAEL SLEZAK

CINCINNATI -- Backed by a $100 million advertising campaign, Procter & Gamble's new over-the-counter analgesic Aleve is expected to hit supermarket shelves June 13, retailers said.

While only about half of the retailers polled by SN had received a specific presentation about Aleve from P&G, most of them said they felt Aleve could help spur analgesic sales to new heights at food retail in 1994. The supermarket trade has been abuzz about Aleve since Jan. 11, the date the Food and Drug Administration approved P&G's bid to market the low-dose form of the popular prescription drug naproxen sodium as an OTC medication. P&G has been granted a three-year exclusivity by FDA to market the drug.

It is the first analgesic to make the switch from prescription to OTC since ibuprofen in 1984. Products such as Aleve offer supermarkets a large profit opportunity, especially when compared with the dollar volume generated by other grocery categories. According to Willard Bishop Consulting, OTC versions of the prescription products Naprosyn and Anaprox, which also use the active ingredient naproxen, are expected to grow to $915 million in prescription-to-OTC sales in the next two to five years. This compares with the sales volume of cake mixes, $615 million; hot cereal, $440 million, and bulk candy, $819 million.

"It will be one of the biggest -- if not the biggest -- new health and beauty care products this year. And it's one of P&G's biggest in a long time. They've come out with a real winner. P&G is very excited about this, and so is the trade," said Rozanne Burks,

HBC buyer-merchandiser for Gateway Foods' Buffalo, N.Y., division.

Tony Federico, vice president of nonfood at Ingles Markets, Black Mountain, N.C., agreed. "Aleve is going to be huge. We're really excited."

"Aleve will be a big seller. We plan to stock all six [stockkeeping units]," said Mark Beyer, HBC buyer for Copps Corp., Stevens Point, Wis. The six stockkeeping units include 24-count, 50-count, and 100-count bottles in both tablets and caplets, he said.

Experts on prescription-to-OTC switches have stressed how crucial it will be for supermarkets to stock a variety of Aleve SKUs as quickly as possible to avoid losing OTC switch business to drug stores and mass merchants.

This is underscored when comparing the market share of OTC sales and prescription-to-OTC sales in food and drug stores.

Supermarkets have a 39% share of OTC sales and drug stores have 45%. However, in prescription-to-OTC sales, drug stores have a commanding 60% share of the business, while supermarkets have 20%.

"We try to jump on the new items as early as possible. It's important to have the product once consumers see it on TV and come and shop for it. Obviously, you want to capitalize on advertising when advertising is big," said Wyman Butler, nonfood merchandiser for J.H. Harvey Inc., Nashville, Ga.

Federico of Ingles said he would like to get the product into his stores by June 1, although the scheduled ship date is almost two weeks later.

Burks agreed that supermarkets face a challenge in marketing Aleve because many consumers do not perceive food stores as the first or best place to find over-the-counter switches. "If the grocery store doesn't get it out right away along with the drug stores, they will lose a lot of dollars, because you're talking high dollar rank and gross profit in the category." She added that P&G suggested food stores can rake in margins of between 20% and 30% on the product. "They're not looking to make it really lowball," Burks said. "You're crazy not to make your gross profit on this type of an item."

"We'll stock Aleve right away, because it's definitely important to get [OTC switches] out quickly," said Beyer, who admitted it is crucial to convince the public that a supermarket stocks newly switched products as quickly as any other class of trade.

Most retailers said they will take advantage of promotional opportunities to let the public know they have Aleve in stock.

"We have some very special, unique plans, but of course we don't want to let them out beforehand," Federico offered.

While not all retailers polled by SN have received P&G's full presentation on Aleve, most said P&G representatives would be visiting them within the next week. Those chains included Jitney Jungle Stores of America, Jackson, Miss., and Piggly Wiggly Carolina, Charleston Heights, S.C., plus one other chain whose buyer wished not to be named.

One buyer who did receive the full P&G report on Aleve was optimistic the manufacturer will make Aleve "a winner."

"P&G's presentation was very exciting. They said they're spending $100 million in advertising in one year. It's going to be an incredible spend," said Burks of Gateway Foods. "We're going to get a whole new category with Aleve."

P&G presented her with a cornucopia of promotions for the product, but Burks added the company's shipper could be the most important item for supermarkets to look into.

"The shippers have an information brochure about the product and what it does. We'll have those shippers. Because there are people who won't understand what Aleve is. This will help educate consumers and sell the product along with their television commercials," said Burks.

"But," she added with a chuckle, "they're keeping their TV commercials a secret. They're being sneaky."

Burks said P&G also discussed a "carrier display," that will be available with Aleve. She said this was "a plastic device that clips right onto your shelf, so the Aleve sign comes out perpendicular, almost like a [point-of-purchase] sign, to attract the consumer to that shelf and to create its own special category."

P&G will also equip supermarkets with a "speed case," which has a complete mix of all six Aleve SKUs, "so you can be completely ready to set it up immediately," Burks said.

"They'll be doing coupons and in-store demos," she continued. "In November, it'll be free Aleve with a Vicks/Pepto purchase. Aleve will be a part of all of P&G's special events, even their largest ones, like Special Olympics and Publisher's Clearing House."

Burks said P&G is also well known for its doctor detailing with both doctors and dentists, and this may move Aleve more quickly than some retailers have anticipated.

"We'll be advertising shortly after the ship date. Off-shelf promotions will begin immediately -- almost as quickly as you see the product itself," Burks said.

"We'll definitely put it in ads once we're sure it's here," concurred Beyer of Copps Corp. "We'll probably be doing some floor displays. In fact, we're surveying some now for off-shelf."

Michael Wilson, HBC buyer for 19-store food retailer Boney Wilson And Sons, Wilmington, N.C., said he has received "a rough presentation" from P&G.

"They haven't given us all the information yet, but naturally, if they put the push behind it, we'll stock it," he said.