Feeling No Pain
By taking advantage of the opportunity offered by pain management products such as hot and cold packs, grocers can reap significant profits.
Americans are now suffering from more aches and pains than ever before. While this may not be good news for the afflicted, there's a silver lining for those retailers astute enough to offer shoppers a wide assortment of topical over-the-counter pain management solutions.
"The category is doing very well," says Art Pirrone, VP, sales and marketing for North Kingston, R.I.-based Modular Thermal Technologies, makers of CryoMax cold packs. "As the aging population continues exercising, they have more swelling, inflammation and injuries, so there is a lot of room for hot and cold therapies."
The market for topical pain management products has been increasing over the past several years. According to the Schaumburg, Ill.-based Nielsen Co., sales of these remedies topped $313 million last year. While this figure pales when compared with the $2.3 billion sales ticket for internal analgesics, many consumers are starting to curtail their pill-popping ways and have migrated to topical pain management, especially for muscle strains and bruises. Sales of internal analgesics are in the decline (down 3.1 percent), while external products have grown 2.6 percent.
"This category won't cannibalize sales of internal analgesics," says Derek Dearwater, EVP of Merritt Island, Fla.-based Niche Products, the national brokerage for Thermionics. "Just because of the high cost of health care and physical therapy, many consumers are trying a do-it-yourself approach."
When it comes to sales of topical pain management products, supermarkets have come late to the party. According to Nielsen's Brand Report, 70 percent of all sales in the category are derived from the efforts of the chain drug channel. This leaves just 30 percent of sales divided among food, mass and specialty HBC outlets.
"The opportunity is in the food chains," Pirrone says. "Supermarkets have put in pharmacies for the last 20 years, but they didn't go the extra mile and put in full first aid and pain relief sections to complement them."
Mass merchants have begun to place more emphasis on the category, which has put even more pressure on supermarkets to make these products more available to their customers.
Getting the Word Out
There are two ingredients necessary for supermarkets to make significant inroads into topical pain management category sales. First, the retailer has to have a strong assortment of the products in the category, and then it needs to let its shoppers know about the presence of the products in the store.
Since there's a wide variety of items in the category, which is growing in number as the category increases in popularity, retailers should give it adequate shelf space to show consumers a full choice of remedies and brands. Admittedly, the category can't compete with some of the more popular and profitable OTC categories, such as internal analgesics and cough/cold remedies, but it shouldn't be relegated to the bottom shelf of a back gondola. Prominent positioning will help increase customer awareness of the products.
"Part of it is letting the consumer know you're participating in the category. The drug chains are promoting these products in their circulars monthly," notes Scott Matolka, director of sales and marketing at Akron, Ohio-based Hygienic Corp. "It's like any other category: Promotion drives awareness and price is a catalyst. I watch the grocery circulars and don't see the category represented often, not even at the shelf promotions."
"Manufacturers can help supermarket operators to promote the category, but ultimately it's up to those operators to embrace the category and join the vendors in promoting the products."
—Scott Matolka, Hygienic Corp.
Manufacturers can help supermarket operators to promote the category, Matolka adds, but ultimately it's up to those operators to embrace the category and join the vendors in promoting the products.
Awareness of the category in supermarkets is very much a "Tale of Two Stores." Locations with pharmacies have a distinct advantage over those without when it comes to building awareness of the category. The advantage is in the presence of a pharmacist — a live, talking health care expert to help guide suffering shoppers to these external pain management products. Merchandised near the pharmacy, the category gains more legitimacy then it does down some HBC aisle. The customer, baffled by the array of external and internal pain remedies, is likely to seek out and then follow the advice of a pharmacist.
For those supermarkets that don't have the luxury of having a pharmacy and pharmacist on hand, building awareness of the category is a much slower process. Signage and in-store promotion are musts to help educate the consumer. Retailers can also put these products in their circulars (whether on special or not) as a way of building top-of-mind awareness. Top-of-mind awareness is crucial in this category, since it's necessity more than price that drives shoppers to purchase these products.
"People buy these products when they need them; they don't stock up on products in the category when they are on special," says Dearwater. "You have to have the products on the shelf when the shopper needs to use them, and the consumer has to know that they are there even before they leave the house to go buy them. It's a condition-specific sale, just like Robitussin is generally only bought when someone has a cough. It's all about having the products available."
Traditionally, topical pain management products have been included as part of the first aid set. To be fair, drug stores also usually merchandise this category alongside first aid products. This grew out of the practice of using cold therapies as a way of treating injuries on an immediate basis. Since products in this category are now being marketed as long-term pain management solutions, it may be time to rethink the category's positioning in the store.
"I've always been puzzled when retailers put external and ingestible pain relievers in different aisles," says Matolka. "The external pain relievers are usually near the first aid, instead of making one pain relief destination."
'Tis the Season
While its items are far from seasonal, the category does sell better in the summer, when more people tend to participate in sports and more strenuous recreation. This is the perfect time to promote the category, both in-store and in circulars. Products can even be cross-merchandised with seasonal items such as sunscreen or any recreational and sports products a store may be carrying.
Most of the promotion of the category is done at this time of the year; however, there's also an opportunity to promote the category during the autumn and winter, especially in the northern parts of the country, when strains and sprains from leaf raking and snow shoveling can take their toll. Displaying hot or cold packs and analgesic rubs near snow shovels and ice melt can boost both awareness and sales.
One company that has taken steps to make its products more shelf-friendly to allow retailers to easily develop displays is Thermionics. The company has just released a redesign of its ThermiPAQ packaging to better spotlight the clay-based hot and cold packs inside and to help consumers understand their benefits. According to Dearwater, the new packages are shorter and deeper to fit better on typical grocery shelving. Modular Thermal Technologies' CryoMAX cold pads also are sporting new packaging that highlights the benefits of the product's eight-hour duration.
According to Matolka, Hygienic Corp. has introduced a new convenience version of its Perform brand, which is the retail version of Biofreeze. Perform Singles are the on-the-go alternative for consumers who want the convenience of being able to have the product with them whenever and wherever they need it.
Displaying hot or cold packs and analgesic rubs near snow shovels and ice melt can boost both awareness and sales.
Category Snapshot
The topical pain management category includes a number of product types. Some items, such as liniments and balm, are among the oldest types of over-the-counter health products, while other remedies are newly developed using state-of-the-art technology. Generally, the category consists of analgesic rubs, oils, lotions, balms, menthol gel rubs, and hot and cold packs, as well as electric heating pads. With sales of $225 million through food/drug/mass, according to Nielsen data, hot and cold packs make up the largest part of the category.