THE BIG SNEEZE

CHRISTINA VEIDERS / Additional reporting: MATTHEW W. EVANS / JOEL ELSON

It's here and it's big.

"All indications are that this is going to be a whopping ragweed season, which could mean misery for a lot of people," reported Dr. Robert M. Miles, president of The American College of Allergy, Asthma & Immunology, Arlington Heights, Ill., earlier this month.

"Sales have been very strong and up about 10% to 15% over the last year," said Kevin Howe, category manager for Imperial Distributors, Auburn, Mass. "The drought in the East is helping. There's been no rain to keep plant pollens from flying, and weeds like Goldenrod are thriving."

Estimates vary from a third to over half of the American population suffers from seasonal allergies each year, and there is some indication that the seasonal nature of allergies is becoming more of a year-round affliction for many. "Although allergy and sinus is a seasonal segment, symptoms are becoming more year-round. Products are selling all year long," said Charles Yahn, vice president of general merchandise for Associated Wholesalers, York, Pa. He speculated this situation may be caused by poor outside-air quality and lack of fresh circulating air in air-tight buildings.

For supermarkets, it's one of the biggest volume categories in health and beauty care. The entire cold/allergy/sinus category generated nearly $3 billion in sales for the 52 weeks ended March 28, 1999, according to Chicago-based Information Resources Inc., which does not break out the sinus/allergy segment separately. Except for a decline in cough drops, sales were up moderately in liquids, tabs/packs and syrups across all three channels. Supermarkets vied for dollar and unit market share with the drug channel; both channels split more than a third of sales each. While posting double-digit sales increases, mass merchandisers' market share represents close to 25% of category volume.

According to a report on the upper-respiratory category produced by the General Merchandise Distributors Council, Colorado Springs, Colo., of the 85.9% of U.S. households shopping the upper-respiratory category, 75% of households bought their medicines at supermarkets. This leaves a 25% opportunity gap for the supermarket channel.

In contrast to the cold/flu segment, allergies are more geographic in nature. While East Coast retailers are experiencing record-breaking allergy sales, a retailer like Haggen Inc. on the West Coast reports normal conditions. "The allergy season hasn't been all that bad this year," said Joel Todd, health and beauty care buyer for the Bellingham, Wash., chain. "In this area, we haven't had a drought. Even though the weather has been wetter than normal, we have a coastal climate and pretty mild summers," he said.

Geographic patterns are likely to change, however, with scientifically advanced new products like anti-IgE, a genetically engineered monoclonal antibody that blocks the body's response to exposure to antigens that trigger inflammation, sneezing and runny nose. Down the road, researchers hope monoclonal antibodies and enzymes can prevent or drastically reduce allergic reactions. Anti-IgE, being developed by Genentech, Novartis Pharma and Tanox Biosystems, is said to be about two years from Food and Drug Administration approval.

Meanwhile, sales of prescription antihistamines, which block the release of histamines that trigger allergic reactions, have doubled between 1995 and 1998 to $2.13 billion, according to IMS Health, Westport, Conn. Worldwide sales exceed $8 billion a year.

While the first generation of prescription allergy drugs that went over-the-counter in 1976 -- Allerest (Pharmacraft), Sudafed Plus (Warner-Lambert) and Chlor-Trimeton (Schering Plough) -- have been widely popular, consumers complained of drowsiness.

Hoechst Marion Roussel, the maker of Seldane, which at the time of its release in 1985 was a breakthrough non-sedating prescription antihistamine that was later found to cause life-threatening side-effects, has since introduced Allegra, one of a new generation of allergy drugs that provide relief without the drowsiness. Other such drugs included Claritin (Schering) and Zyrtec (Pfizer).

Drug manufacturers have pushed hard to publicize these drugs through direct-to-consumer advertising, especially since 1997, when the FDA relaxed its rules on TV advertisements for prescription medicine. Revenues for Allegra have soared to $316 million in the three years since the TV spots first aired and the FDA prohibited the company from mentioning that Allegra was an allergy medication. Sales hit $1.15 billion for the nation's leading prescription allergy drug, Claritin from Schering. Joan Lunden, the former Good Morning America host, is Claritin's celebrity spokeswoman. Industry analysts predict more high-profile, direct-to-consumer advertising will continue to elevate sales of prescription allergy medications, possibly at the expense of over-the-counter medications.

Several petitions from Blue Cross have been filed with the FDA asking that, because they are safer in terms of side-effects than current OTC antihistamine/decongestant combinations, these non-sedating antihistamines be switched to over-the-counter. However, the drug makers, who usually wait until their drug patents expire before seeking OTC approval, are opposing this move.

Yahn of Associated Wholesalers doesn't view the growing popularity of prescription drugs as a threat to OTCs. "Both our pharmacy sales and OTC sales are up. People concerned with health issues are trying all options. They may first go to an OTC and then to prescriptions drugs," he said.

Commented Howe of Imperial, "The casual consumers will still seek out the pharmacist if they aren't exactly sure which product to use because there is so much cross-over in the allergy/sinus category and the different symptoms."

So far this year, it's been relatively quiet for new OTCs in the allergy segment. The latest introductions are several line extensions from NasalCrom (Pharmacia & Upjohn Consumer Healthcare), which released a children's formula and two prevention packs. With its Children's NasalCrom, the manufacturer is seeking an additional six months of marketing exclusivity under the Waxman/Hatch bill.

First launched in March 1997 by McNeil Consumer Products, P&U acquired the brand soon after and began marketing the newly switched allergy nasal spray, emphasizing its preventative benefits. The drug has yet to reach the volume generated by brand leaders: Tylenol, Sudafed and Benadryl. However, retailers told SN, sales have been satisfactory. "NasalCrom is doing very well," said Connally Campbell, HBC buyer at C.B. Ragland, Nashville, Tenn. "The dollars are pretty good because the product is expensive," said Todd at Haggen.