Driven by consumers’ increased focus on preventive health and fueled by information on social media, the natural over-the-counter (OTC) market is taking a bite out of the traditional OTC category.
- While Baby Boomers seek natural products that can proactively treat conditions associated with aging, Millennial consumers — who wish to avoid such conditions altogether — are the ones significantly driving category growth.
- Many natural OTC products now focus on boosting immunity to prevent illness rather than on alleviating specific symptoms, with some manufacturers making use of recently developed combination products to do so.
- Along with immune-boosting supplements and cold/flu remedies, sleep aids and children’s products have lifted natural-segment sales.
While natural OTC products will never replace traditional OTC products, they represent an important growth opportunity — one that supermarket retailers can’t afford to ignore.
Supermarkets have expanded their natural product selections significantly over the past two years. “The proving time these products used to have in specialty stores before entering FDM [food, drug and mass-market retailers] has decreased dramatically. In some cases, FDM stores are going directly to the natural product manufacturers to have custom products made for them, and we have recently designed custom products for large grocery chains,” says Dr. Cameron Moeller, a spokesman for Alpine, Utah-based American Biotech Labs. “These natural product lines are now proven sellers in FDM, and it has simplified the consumer’s shopping experience. The demand for natural products is only going to grow.”
Boomers are seeking products that can proactively treat symptoms associated with aging, but Millennial consumers are the ones significantly driving category growth. “Younger consumers are not interested in treating symptoms — it’s all about prevention — and they are willing to pay a lot for products that help them do that,” notes Laura Mahecha, a health care analyst at Parsippany, N.J.-based Kline Market Research.
The Rise of Black Elderberry
That preventive approach has had a big impact on the cough/cold category, where a significant number of products now focus on boosting immunity to prevent colds and flu rather than on alleviating specific symptoms.
“The prevention side of the category, brands like Zicam, Emergen-C and Airborne, [is] growing faster than traditional OTCs that address symptoms,” affirms Lisa Buono, principal in Chicago-based IRI’s health care practice.
“Consumers want quality immune support supplements that can help them stay healthy,” observes Moeller. For example, American Biotech Labs has introduced Silver Biotics Silver Lozenges, which combine a silver supplement with manuka honey for an immune-boosting effect. The Kroger Co.’s Harris Teeter banner, based in Matthews, N.C., recently brought in American Biotech Labs’ Silver Biotics Silver Lozenges and flags them with “new product” shelf tags. The banner also carries Los Angeles-based PPC Group’s EZC Pack, formulated with echinacea, zinc and vitamin C.
Meanwhile, the probiotic segment, once a huge growth area, has experienced some stalling. “We’re starting to see scientific data questioning how effective probiotics are,” observes Buono.
New research that indicates probiotics are best absorbed when taken with a prebiotic has sparked the introduction of combination products. “Synbiotic formulations, which combine a prebiotic and probiotic, have become more popular,” notes Mahecha. Last year, Austin, Taxas-based Enviromedica launched Terraflora, a broad-spectrum synbiotic.
A shakeout may be looming for the category. While plenty of consumers take probiotics on a regular basis, retailers are identifying their best-selling products. Probiotics from Los Angeles-based Jarrow, for example, routinely sell out at some locations of MOM’s Organic Market, a 19-unit chain based in Rockville, Md., despite the product’s high retail price tag.
Lentz also sees probiotic ingredients branching out into other categories, including cold and allergy products, as part of a push for a holistic approach to well-being. “We’re seeing secondary facings of probiotic products at retail in the cold and allergy sections,” he says.
Combination products containing valerian, chamomile, melatonin and even CBD are showing significant growth as consumers take a prophylactic approach to treating sleeplessness.
“Many natural sleep supplements were showing double-digit increases,” continues Mahecha. Zarbee’s Naturals sleep supplements, for instance, saw sales increases of almost 200%, and sales of Olly Sleep Melatonin Gummy were up 74%, according to IRI all-channel data for the 52-week period ending Dec. 29, 2019. IRI data also shows that Cincinnati-based Procter & Gamble’s drug-free Vicks ZzzQuil PURE Zzzs tablets, in both kid and adult formulations, experienced triple-digit dollar sales increases.
Natural products have established a stronghold in the children’s OTC segment in particular. “Parents feel more comfortable with products that are free of dyes and sweeteners,” explains Buono. “Since traditional respiratory OTCs for kids under 2 years of age have been pulled off the market, these products have become even more popular.” Data from Hamacher shows Zarbee’s Naturals as the No. 2 brand in the pediatric cough/cold market, right behind Mucinex.