More Than Skin Deep

A focus on healthier lifestyles can trigger health-and-wellness product sales.

With all of life's pressures confronting today's grocery shoppers, supermarket operators have a great opportunity to provide moms and dads with the products they need to improve their overall health and wellness (H&W), and that of their families.

According to a new study, "2011 Consumer Shopping Habits for Wellness and Environmentally Conscious Lifestyles," by the Global Market Development Center (GMDC), based in Colorado Springs, Colo., the top health conditions that worry consumers are stress, being overweight, arthritis, depression and anxiety. Aging is the top "trigger" for H&W product purchases.

Conducted by The Hartman Group, based in Bellevue, Wash., the study is based on in-home interviews with 2,000 consumers in three markets and by observing their in-store shopping behaviors. It will be formally presented at GMDC's Health, Beauty and Wellness Marketing Conference, to be held Sept. 9-12 in Phoenix.

"When a person starts saying 'I need to start a healthier lifestyle,' they realize they must eat healthier. So food is in the primary position," observes Keith G. Wypyszynski, GMDC VP, business development/CMO. "What do they eat or drink? What else can they be doing? That's where vitamins and supplements come in, to make sure they are getting what they need, preventative in nature or providing additional benefits."

Personal care products are all part of the H&W mix as well, adds Wypyszynski. "Natural products, things that may be better for their skin, anti-aging products come into play. Then they start looking around themselves, at their homes, their environments, and they look for products that can help control or prevent allergies, that have less chemicals, anything that can potentially affect their health. That's the pathway they go along."

Leading suppliers give credit to grocery retailers for recognizing this and developing holistic H&W strategies to meet the overall needs of their customers. Moreover, data from the Food Marketing Institute indicates that most retailers are maintaining their commitment to H&W product marketing and merchandising, even though many customers are under difficult economic pressures in today's economy.

Retailers Respond

"We have found that some retailer operators are leveraging H&W trends to reposition their stores to shoppers as an alternative to existing health care providers," says Andrew Nestler, VP, sales at the consumer care division of Pittsburgh-based Bayer HealthCare. "If anything, H&W is more relevant to the supermarket retailer than ever before."

Nestler pointed out that supermarket operators capture the largest number of trips of any channel, and as a result, have the biggest opportunity to convert food-only shoppers to purchasers of health and beauty care (HBC) product in their stores. Meanwhile, he adds, although more functional foods are being added, key over-the-counter (OTC) categories aren't being reduced.

"We actually see OTC becoming more important to the retailers in building a H&W destination for their shoppers," he notes. "Most major retailers are racing to the next big opportunity to differentiate and to capture new shoppers not only for today, but [also] into the future."

Nestler adds that capturing OTC H&W shoppers can create meaningful differentiation for retailers. "OTC plays such an important role in how consumers address their H&W needs that it will continue to be a focus point for retailers as they look to position H&W as a competitive advantage," he declares.

H&W INNOVATION

Bayer Health Care bowed Bayer Advanced Aspirin this summer.

Bayer's research indicates that H&W includes physical, mental, spiritual and social well being, and that this broad view extends from the traditional methods of treatment, such as prescription drugs and OTC products, to functional foods, exercise, meditation and other nontraditional methods.

"On the surface, this may seem like a potential challenge for OTC manufacturers, but our experience to date indicates that retailers are placing more emphasis across key OTC and prescription categories and making the total H&W footprint in the store larger," Nestler explains.

Opportunities

Cheryl Policastro, director, shopper marketing and insights at East Hanover, N.J.-based Novartis Consumer Health, agrees with the idea that supermarket operators have the potential of increasing the sale of many OTC products as part of their overall H&W marketing strategies.

"As consumers resist giving up unhealthy foods and are reluctant to pay the higher prices of H&W foods, there are opportunities for wellness OTC categories like digestive health and vitamins/supplements," she observes. "Many consumers use a combination of OTC and healthy foods and beverages to manage their H&W."

Policastro cites two areas of opportunity for retailers to increase OTC sales: extending existing educational efforts for food categories into OTC to connect shoppers with the best OTC solutions for their health concerns, and leveraging opportunities to link OTC with other higher-conversion categories across the store.

Bayer's Nestler notes that within OTC, analgesics and nutritionals are "cornerstones" of a successful H&W strategy.

"As the population continues to age, baby boomers will look to analgesics and nutritionals to help address important health conditions such as heart health and chronic pain," he says, adding that Bayer's research indicates that most shoppers prefer one-stop shopping.

"The retailer that can capture that regimen shopper will have a sustainable advantage in the marketplace," he suggests. "While other classes of trade are attempting to raise the awareness of food's role in H&W through a limited selection and education, the supermarket operator has an entire store of groceries to leverage. Leading-edge supermarket operators are developing comprehensive H&W initiatives that incorporate prescription, OTC, health care services and nutritional programs to redefine H&W in a food world."

Nestler also urges supermarket operators to continue to support product innovation and to get out front on new product launches, citing Bayer Advanced Aspirin, which the company launched this summer, as a prime example.

Key GMDC Study Findings

Here are some key findings from the GMDC H&W study:

There are three main segments of H&W consumers:

■ Core (13 percent): Those who are most lifestyle-involved in H&W and serve as trendsetters and evangelists for other consumers

■ Mid-level (62 percent): Those who are moderately involved in a H&W lifestyle, tend to follow trends, and purchase large amounts of conventional and H&W-specific products

■ Periphery (25 percent): "Entrylevel" H&W consumers who are mostly "reactive" rather than "proactive" when it comes to matters of H&W.

The "sweet spot" for supermarkets, according to GMDC's Wypyszynski, are the mid-level consumers, on whom, he adds, mainstream grocery operators should focus their efforts. Some priority categories for mid-level shoppers, according to the study, are functional beverages, vitamins and specialty supplements, natural hygiene/toiletries for children, natural home-cleaning products, and natural personal care products.

"Values change as consumers evolve," the study points out. "Periphery consumers focus on price and convenience, mid-level consumers focus on knowledge and experience (while retaining some concerns about price and convenience), and core consumers value authenticity, knowledge, sustainability and 'local' (products, services, and retailers)."

Some important consumer attitudes identified include a sense that natural/ organic personal care products are healthier and safer, but that mainstream products provide more value and are easier to find in the store. Consumers believe there is no difference as to their effectiveness.

The most important purchase factor for personal care products, household cleaners and OTC products is effectiveness, while the biggest shopping problem is too many choices. GMDC says retailers could help make in-store choices easier through more intuitive organization and rationalizing their SKU mix to eliminate redundant choices.

"Where possible," GMDC suggests, "it is helpful to integrate all same-category products to give a full-consideration set to shoppers, avoiding special 'wellness' sections that typically place H&W goods in remote sections of stores."