Many retailers have been recasting their family planning sections to create sexual wellness sets that include OTC contraceptives, condoms, personal lubricants, testing kits, sexual supplements and even sexual enhancement devices.
“We’re seeing more expanded sections that include products like sexual supplements and sexual devices,” affirms Laura Mahecha, industry manager of health care for Kline and Co., a Parsippany, N.J.-based market research firm that recently published a report on the sexual wellness category.
Trenton, N.J.-based Church & Dwight helped transform the category when it extended the Trojan brand beyond condoms to personal lubricants and sexual enhancement devices. Targeted to mass-market shoppers and backed with prime-time television and social media advertising, the products are receiving prominent positioning on store shelves and have helped move the category well beyond contraceptives.
Like many other categories, the condom category is showing growth at both the high and value ends of the spectrum, while sales of midprice products remain stagnant. A flurry of high-end premium products has led to a 2 percent increase in dollar sales across multioutlet channels for the 52 weeks ending Sept. 6, according Chicago-based IRI.
Thin is In
Since thinness is a key driver in the category, manufacturers are focusing on the high-performance, high-price segment. Last year, Church & Dwight introduced Bareskin products, which are advertised to be 20 percent thinner than standard condoms, to its lineup. Meanwhile, Ansell’s SKYN nonlatex polyisoprene premium-price condoms, launched in 2008, have been a big success; the Australian company added a SKYN Elite extension this summer. The Durex brand, from Parsippany-based Reckitt Benckiser, also has an entry, ReelFeel, in the nonlatex premium segment.
The condom category continues to be dominated by Trojan, which holds a nearly 75 percent dollar share of the category, but sales of the brand’s condoms were down slightly across all channels ending Sept. 6, according to IRI. At the same time, Durex had a 26 percent uptick in dollar sales. Now Durex and Ansell’s Lifestyle brand both hold about a 12 percent share of category dollar sales.
Smaller brands, such as NV Healthcare’s Nuvo and Global Protection’s One, have entered the category with some success, although their share of the market remains tiny. Harris Teeter’s assortment includes niche players at both ends of the market. The Matthews, N.C.-based chain, a wholly owned subsidiary of Kroger, includes Okamoto’s 10-count condoms, priced at $16.99, and Hollander Sustainable Brand’s Sustain condoms, priced at $9.99, in its mix.
While larger manufacturers are chasing the premium consumer, some smaller companies are seeing an opportunity for value products as prices in the category increase. “The industry today is almost completely focused on the premium shopper. Unfortunately, the value shopper has been left behind,” says Ari Isaacs, president of Oceanside, N.Y.-based NV Healthcare.
According to Isaacs, NV Healthcare’s NuVo offers consumers a premium condom at extreme-value pricing through everyday upsized bonus packs. Consumers, he notes, are becoming more comfortable buying a value brand in this category. “We’ve seen tremendous growth in various channels this year with NuVo, and expect that trajectory to continue,” adds Isaacs. “We also see incredible opportunity in the supermarket channel and are making a concerted effort to increase distribution there.”
Growth in the category going forward will be driven by innovation, and condom manufacturers are exploring ways they can bring novelty to their products. SKUs featuring texture or lubrication continue to be popular with consumers, according to Kline’s research. NuVo, for example, recently launched a Tease ribbed condom and a new UltraSensitive condom.
Church & Dwight has secured North American licensing rights to Futura Medical’s Blue Diamond condom, which features a topical gel used for the treatment of men with erectile dysfunction. The product, not yet approved for distribution in the United States, will be something to watch.
Emergency Contraceptives Drive Sales
Female OTC contraceptives are driven by sales of emergency contraceptives. In a novel strategy last year, Israeli company Teva launched a private label levonorgestrel product, Take Action, to directly compete with its levonorgestrel Plan B brand, in an attempt to gain back share that had been eroded by generic competition. The move worked: Take Action now holds a 32 percent dollar share and is showing triple-digit growth, while Plan B still maintains a 55 percent dollar share despite its much slower 8 percent gains over the previous year’s dollar sales, according to IRI. By comparison, My Way levonorgestrel, from Somerset, N.J.-based Gavis, is showing strong gains in dollar share (38 percent), but still holds a minimal share (5 percent) of the dollar market.
Couponing by manufacturers is common for products that can retail for up to $45. Theft is also an issue in this segment, so products are often displayed in antitheft packaging and/or kept behind the pharmacy counter. That can be a barrier to sales when a pharmacist isn’t present. To surmount this problem, some of Supervalu’s Shoppers Food & Pharmacy locations keep Plan B and Next Choice emergency contraceptives in locked cases, along with condoms and personal lubricants, adjacent to the pharmacy so they can be unlocked when the pharmacies aren’t manned.
Meanwhile, sales in the pregnancy test kit category were up 1.7 percent over the previous year, according to Kline’s research.
New Players Emerge
Despite an aging population and increased openness regarding sexuality, dollar sales of personal lubricants slumped nearly 5 percent, according to IRI. The category’s leading brand, K-Y, took a beating after New Brunswick, N.J.-based Johnson & Johnson’s McNeil division pulled product from shelves following an FDA inquiry in 2013. Although product has been returning to stores, dollar sales for the brand were still down more than 10 percent for the 52 weeks ending Sept 6. Reckitt Benckiser, which purchased K-Y from McNeil last year, plans to revive the sagging brand.
The longtime category leader is facing increased competition from Biofilm’s Astroglide brand, which saw a 6 percent spike in dollar sales and now commands a 19 percent dollar share of the category, as well as from newer players that provide consumers with more choices.
For instance, in June, Ansell extended its SKYN brand to the personal lubricant category with the introduction of SKYN Natural Feel, containing aloe vera and vitamin E, and silicone-based SKYN Maximum Performance. Both lubricants are compatible with latex and polyisoprene condoms. The new products helped Ansell achieve double-digit dollar sales increases for the 52-week period ending Sept. 6. Kline’s research suggests that natural and silicone-based personal lubricants will be the strongest performers going forward.
Devices and Desires
Sales of sexual enhancement devices are ahead 7 percent, according to IRI. Category pioneer Church & Dwight’s Trojan is the category leader, with 56 percent of dollar share across multioutlet channels, while Reckitt Benckiser’s Durex and Ansell’s Lifestyles sexual devices both saw dollar sales spikes of nearly 9 percent last year.
“The popularity of the ‘Fifty Shades of Grey’ books and movie has helped move these products into the mainstream,” explains Kline’s Mahecha. “Having the products in their local drug store or supermarkets helps breaks a taboo for consumers who might not have shopped for those items before.”
She adds that consumers’ acceptance of electronic gadgets across a number of health care categories may have also helped this segment catch fire at mass outlets, pointing out, “Consumers who are using Fitbits and other electronic monitoring devices may not find it such a stretch to use an electronic device for sexual wellness.”
“The industry today is almost completely focused on the premium shopper. Unfortunately, the value shopper has been left behind.”
—Ari Isaacs, NV Healthcare
“The popularity of the ‘Fifty Shades of Grey’ books and movie has helped move these products into the mainstream. Having the products in their supermarkets helps breaks a taboo for consumers who might not have shopped for those items before.”
—Laura Mahecha, Kline and Co.