Pain on the Shelf

Retailers rethink their pain relief sets as topicals are poised for double-digit growth.

Food retailers must sell more than simple mustard plasters and alcohol rubs to satisfy today’s shoppers looking for topical pain relief.

With limited shelf space, retailers are challenged to navigate a $460 million sales category in mass market outlets where new products and formulations of gels, ointments, creams, lotions, sprays and patches are introduced each year by leading drug companies and smaller vendors.

“It’s tough because grocery has even less space than mass and drug, and mass and drug are doing SKU rationalization in a lot of these categories,” says Laura Mahecha, manager for health care at Kline & Co., based in Parsippany, N.J.

An aging population suffering from all kinds of musculoskeletal aches will lead the charge for more targeted relief medications.

The population of those age 65 and older is projected to more than double from 40.2 million in 2010 to 88.5 million in 2030, when one in five U.S. residents will be 65 or older, according to government projections.

Consumers are choosing topical remedies over external analgesics because they’re concerned about medication safety, overdosing, and the potential side effects and interactions with other medications.

In-store pharmacists need to grapple with safety issues associated with all pain relief medications, including topicals, in advising shoppers on pain management.

Safety issues associated with the two classes of pain relievers — acetaminophen (Tylenol) and nonsteroidal anti-inflammatory drugs (NSAIDs) — are potential liver damage with overuse of acetaminophen, especially with alcohol consumption, and stomach irritation, internal bleeding, kidney damage, heart attacks and strokes with NASAIDs.

Topical sales may have benefited over the past few years by the recalls and subsequent lost shelf space of Tylenol (Johnson & Johnson/McNeil Consumer Healthcare) and Excedrin (Novartis Consumer Health). Those recalls have caused headaches for merchandisers and disruption on the shelf.

Mahecha said private label internal analgesics benefited most during Tylenol’s four-year absence. Meanwhile, topicals began to experience annual growth of 4 percent to 5 percent in sales.

This year, Tylenol has begun to recapture its lost retail distribution. The disappearance of Excedrin, which also suffered a recall and supply disruptions from a closed plant, was temporary in comparison to Tylenol.

Those recalls, however, further highlighted quality and safety issues for the consumer, and caused retailers to reevaluate their pain relief shelf sets.

For the 52 week period ending Aug. 11, 2013, IRI reports internal analgesic tablets at $3.1 billion, up 1.2 percent. Units slipped 1.8 percent. The $391 million internal analgesic liquid segment is performing better, up 12 percent in dollars and 9 percent in units.

Topical Challenge

The $460 million topical (rubs) segment, meanwhile, is up 5.6 percent in dollars and 6.5 percent in units.

Kevin Bingham, VP sales, who is responsible for the Salonpas topical line at Florham Park, N.J.-based Hisamitsu America, a division of Hisamitsu Pharmaceutical Co. in Japan, projects a 10 percent growth rate for topicals between 2013 and 2015.

That growth will come from product innovations and the expectation that Novartis prescription drug Voltaren, a NSAID, to treat osteoarthritis will go over the counter (OTC). The U.S. Food and Drug Administration (FDA) approved Voltaren as a prescription topical remedy in 2007. It has been selling successfully in Europe as an OTC product.

“If Voltaren is approved as a topical [OTC,] that will cause a big bump in the market because it doesn’t really cannibalize so much on Icy Hot or Bengay, but it just brings Voltaren prescription users to the OTC market with organic growth over the existing market,” Mahecha says.

Efficient Merchandising

With topicals positioned for growth and the internal oral segment still being adjusted after the Tylenol debacle how should grocery merchandisers with limited space approach their topical sets?

Hiramitsu America’s Bingham says the focus should be on eliminating redundancies and number of sizes on the shelf offered within a brand as well as those products lacking advertising and promotional support — what he calls “low-investment” products.

Salonpas is investing $26 million in media mostly television advertising this year to support its line and new Deep Relieving Gel item. The brand devotes retail trade funds to price reductions special retail sampling events off-shelf displays and educational signage.

“What we like to see and what many retailers are doing is prime locations for brands with broad awareness and support. Those are typically placed in the top third tier of the set,” Bingham says. The middle of the set should be reserved for “showcase high-growth” brands with innovation while smaller-profit brands should be positioned toward the bottom.

He adds that form loyalty also plays out in merchandising decisions — creams/gels versus patches.

Salonpas’ research indicates that consumers are price, form and brand loyal in deciding what topicals to buy. Those hierarchy decisions should be factored into shelf sets.

Bingham also sees a role for private label in the category. “It helps retailers with their overall category mix, sales and profitability,” he says.

While store brands can benefit from the increased advertising, promotional support and awareness generated by the leading brands, Bingham cautions that retailers must maintain a delicate balance so as not to overplay their private label.

One Topical Set

Quincy, Mass.-based Stop & Shop Supermarket carries the Salonpas line, and an analysis of a topical shelf set at a Connecticut Super Stop & Shop location illustrates the space crunch large grocery chains face in an assortment-intensive analgesic category, and suggests there’s room for improvement.

In the store, external and topical analgesics were merchandised in an aisle containing first aid, mouthwash, bar soap and toothpaste.

Topicals represent about 12 percent to 15 percent of the total dollar volume of all pain relief analgesics sold at mass market outlets, according to recent IRI data.

The amount of space the Stop & Shop store devoted to topicals — two bottom rows of an 8-foot analgesic set, nine shelves high — appeared to be about right given the dollar volume generated. Yet the position in the set isn’t ideal for an older and even elderly demographic looking for topical relief.

The section, which needed some attention, featured about 37 SKUs of topicals, including the leading brands sold at supermarkets — Icy Hot (Chattem, a Sanofi company), Bengay (Johnson & Johnson) and Salonpas. Several holes in the set were missing product, including an SKU of Aspercreme (Chattem), a $7.2 million brand at food stores.

On the shelf, Stop & Shop generally flanked leading brands with its store-brand equivalents. Both Tylenol (McNeil) and Excedrin (Novartis) were back on the shelf, with two facings each. The price differential was $8.79 for 50-count Tylenol, compared with $4.99 for the CareOne equivalent.

Several therapeutic wraps and patches — ThermaCare (Pfizer), Salonpas and Icy Hot — were carried in topicals. A separate set down the aisle featured Carex hot and cold packs, $10.99 and on sale for $8.99. These items were also merchandised by the pharmacy.

“If Voltaren is approved as a topical [OTC,] that will cause a big bump in the market because it doesn’t really cannibalize so much on Icy Hot or Bengay.”
—Laura Mahecha, Kline & Co.