Little Colds, Big Opportunities
The children's OTC category is emerging as a source of extra profits in HBW aisles.
As all parents know, when their children don't feel well, they'll do just about anything to make them feel better.
Increasingly, this includes purchasing an over-the-counter (OTC) remedy. Whether the problem is a cold, cough, pain, fever, rash, insect bite or stomachache, more parents are turning to the OTC aisle for a solution.
Indeed, OTC remedies specifically formulated for children aren't new; products such as children's aspirin have been on grocers' shelves for decades, along with cough syrups and specialized skin remedies. Emerging now, however, are new types of products, formulations and natural remedies fighting for shelf space.
Not all retailers move at the same pace when it comes to taking advantage of the sales and profit opportunities that children's OTC remedies have to offer. As would be expected, drug chains and mass merchants have been quick to adopt this product category. Supermarkets, on the other hand, have been slower to fully embrace these products.
"While many food retailers are enjoying the higher margins and incremental profits these items deliver daily, many have yet to expand their assortments — especially in baby OTC — to include more pediatric OTC options," says Dave Lesiak, director of sales for Carson, Calif-based Hyland's Inc. "In view of growing consumer desire to minimize medical expenses, providing convenient availability of safe, effective and reasonably priced self-medication options is an incremental profit opportunity worth exploring."
Hyland's, a manufacturer of all-natural remedies, recently introduced Hyland's Baby Cough Syrup and Hyland's Tiny Cold Tablets, which are both positioned to be used by children from 6 months to 3 years of age. These complement the company's line of cough, cold and allergy remedies for older kids.
According to Schaumburg, Ill.-based Nielsen, children's pain relief product sales reached $293 million last year, which was up about 1.8 percent as part of the $2.3 billion total pain relief category (This was in a year when the largest manufacturer in the category, Tylenol, wasn't fully active for part of the time).
Quest for Convenience
When it comes to merchandising children's OTC products, Lesiak believes that supermarkets should follow what they do for their adult consumers. "In those instances where we have realized the greatest sales success, items are merchandised by indication" — for instance, pediatric subsets adjacent to their adult category equivalents — "to proactively address consumer shopping habits and preferences," he says. "In the case of products positioned for use by infants, our experience suggests that the baby department is where moms first investigate their self-medication/treatment options."
Another merchandising philosophy would be to pull all of the children's OTC products into a separate section. "Many drug chains have a separate children's analgesic section. I don't know if a grocery store will handle as many products to always warrant that," says Wade Ambler, director of consumer brands at New Castle, Del.-based Scripts America, makers of RapiMed products.
RapiMed is poised to launch a new children's analgesic product delivered through a tablet that dissolves on the child's tongue. The flavored tablet will dissolve in less than 15 seconds, which Ambler says is four to eight times faster than other tablets now on the market.
This type of product is part of a growing trend to make children's remedies more convenient for parents not only to bring with them, but also to administer, which mitigates the need for measuring and cups or syringes. According to Ambler, along with safety and efficacy, parents are looking for convenience when choosing a product for their children. This quest for convenience may in turn further help supermarkets reach children's OTC shoppers. Proactive in-store promotion of the category and specific products can help make customers realize the presence of the products in supermarket HBW aisles.
Obviously, saving harried parents from making an extra trip to the drug store is a good incentive to making a children's OTC purchase at the supermarket. The trick is to grab parents' attention before they get back into their cars.
"Providing safe, effective and reasonably priced self-medication options is an incremental profit opportunity worth exploring."
-Dave Lesiak, Hyland's Inc.