MOUTH WASHOUT

CHRISTOPHER MILLER

Mouthwashes are moving as slow as molasses on supermarket shelves.

But while molasses has a reputation for being slow, it's also known for being sweet. Likewise, supermarket retailers polled by SN said mouthwash sales have the potential to get mighty tasty, too, if category promotions are increased. Food store executives also reported they are feasting on the higher profit margins private-label mouthwash can give them.

Shari Steinbach, spokesperson for Spartan Stores, Grand Rapids, Mich., confirmed that "sales in the oral rinse category are not growing."

"Nothing is really jumping off the shelf for us at this point," echoed Larry Fogliasso, director of nonfood for Gelson's Markets, Los Angeles.

Such comments are confirmed by Nielsen North America, Schaumburg, Ill. The research firm reported dollar volume in oral antiseptics for the year ended Dec. 10, 1994, was $238.3 million, down 2.1% from the previous year. Volume in oral rinses was $58.3 million, up only 2.6%.

But Michele Arnault, national product manager, McKesson Drug, San Francisco, pointed out mouthwash is a category worthy of attention because it "has a lot of image and draw potential.

"Mouthwash lends itself to promotion," she added. "With that in mind, retailers are taking full advantage of the wide variety of [opportunities]

available to them."

Nearly all retailers contacted by SN said they were beefing up their regular mouthwash displays with shelf-talkers or other signs. They said they were also finding second positions for the category in stores, usually at end caps or out-post displays. And they were topping it all off with temporary price reductions and circular ads. Spartan's promotional strategy typified this kind of combination: "Mouthwash is promoted in [our] stores with ads, end caps and off-shelf displays," said Steinbach.

Some retailers rely almost exclusively on national brand promotions to push mouthwash. J.H. Harvey, Nashville, Ga., is one such retailer, said Wyman Butler, nonfood merchandiser for the 38-store chain.

"We've pretty much been riding [manufacturer's] coattails because they are pretty aggressive with us. They work with us pretty strongly and they've had a number deals [available to us]," he said. Not all retailers gave high marks to mouthwash makers, though.

Dave Lynam, health and beauty care buyer for Harding's Friendly Markets, Plainwell, Mich., said mouthwash manufacturers should be doing more to help retailers sell their products. "I don't see a lot of activity from the manufacturers in some of your national brand leaders. The promotional level is not where it should be," he said.

Still, another retailer from a large Southern chain said he found success combining national brand HBC items with private-label mouthwash in one promotion. "In most of our ads we promote some type of private label. We try to promote mouthwash in the ads every week, too. [Then] we tie in our displays of private label-mouthwash to our displays of national brand toothpaste," said the source, who asked to remain anonymous.

Indeed, private-label mouthwash has proved a bastion of category success in a plethora of supermarkets. And while private-label products are sometimes a tougher sell in taste-sensitive categories, said food retailers, consumers have accepted private-label mouthwash like a child accepts a homemade cookie.

Jim Key, nonfood direct store buyer for Community Cash Stores, a 27-store chain based in Spartanburg, S.C., said private label mouthwash outsells the national brands by three to one at his chain. And, he said, "it carries about twice the profit.

"I figure we'll promote private label a lot because you can get a good price point and make good profit," Key continued. "As far as national brands, you really have to take a big price cut to get the product to move like you need it to."

Lynam of Harding's Friendly Markets, said private-label mouthwash "is pretty much accepted throughout" the chain's 34 stores. Lynam said that Harding's private label is priced about 15% lower than branded items and averages margins in the 20% to 30% range. Wanda Lovelace, HBC buyer for Jons Markets, Los Angeles, reported similar numbers. "Our gross profit on private label is a minimum of 20% more than on branded products," she said. "We try to keep the price point at about a 10% difference."

Lynam's and Lovelace's figures were typical among most of the retailers with which SN spoke. A few, however, reported margins or price point differences that were much higher. Butler said, "A private-label price point would be less than half the price point of a name brand" at J.H. Harvey. An anonymous source from a large Southeastern chain said his margin on national brands is "in the mid-teens," while "our private-label margins are 50%-plus." He added that his store uses a "really strong, really high-quality private-label program." Regardless of promotional activity or category success, most of the supermarket retailers who spoke to SN agreed a mouthwash section between eight and 12 feet is appropriate for oral rinses and oral antiseptics. Other than bolstering promotions and promoting private label, though, there aren't many other salient ways to move mouthwash, according to retailers. Time may be one factor that will eventually help mouthwash sales, as some consumers have not yet accepted the category for everyday use, said Arnault of McKesson.

"I would have thought that there would be a big increase in some of the mouth rinses because people want to keep their teeth longer," she offered. "But they're used to brushing and they're used to flossing, and maybe they've never incorporated the mouthwash into their [daily] regime."

Lisa Mackenzie, HBC buyer for Sobey's of Stellarton, Nova Scotia, agreed. She noted that an improvement in the quality and ingredients of toothpastes may have had an adverse effect on mouthwash sales. "People aren't using dual products anymore because they're getting what they need from the toothpaste," she explained. Sobey's, however, also takes good advantage of it's locality for promotion, she said, adding: "April is dental health month here. We've put a major focus on that and made [mouthwash] one of our 'select items' for that particular month."

Arnault also suggested that the rash of new introductions to the category may have occurred too much, too fast: "Some of the new items, they're not as motivating. I don't know if that's overload for the consumer. I don't know if the consumer is willing to pay a higher price."

Fogliasso of Gelson's, on the other hand, said he thinks more new introductions will boost consumer interest. "You've got to be open minded enough to bring a new entry into that category and give the consumer the choice, to see if it's going to sell or not," he said.