Presentation and promotion spur growth in pantry-fill

Drug Store News, Sept 9, 2002 by Rob Eder

It is no secret that chain drug retailers have made a significant commitment to building more convenience into the drug store shopping experience and that a major focus of that effort has centered on building a larger presence in food, mainfesting itself in vastly expanded departments, additional coolers and a considerable promotional effort.

Beyond the contributions of the beverage, candy and snack categories, pantry-fill is a big part of the convenience proposition in drug stores and is a growing piece of the pie.

At the heart of that growth are categories like cold cereal, worth almost $89 million in drug, growing at 23 percent; soup, a $70.2 million business in drug stores, up more than 13 percent; coffee, worth $65 million, up more than 12 percent; and canned seafood, $36-plus million, up almost 17 percent. And certainly, this is a category that has benefited from extra promotion. Looking over the top 20 brands in pantry-fill, there is a direct correlation between what goes in the circulars and what makes that list. CVS circulars, during the week of Aug. 25 to Aug. 31, featured discounts on three items among the top 20: No. 1, Folgers coffee, No. 11 Post Honey Bunches of Oats cereal and No. 20 Heinz Ketchup. Around the same time, Rite Aid circulars featured No. 4 Maxwell

House ground coffee and Nos. 7, 8 and 18 Kellogg's Frosted Flakes, Raisin Bran and Froot Loops.

"We didn't see this type of activity in the circulars a few years ago that we are seeing today with food products in drug stores,' IRI executive vice president of client services and consulting David Shanker told Drug Store News. Heightened promotional activity, expanded departments, deeper assortments, competitive price points--all are direct drivers of the growth demonstrated in pantry-fill, Shanker explained.

Now that chains have a foothold in the category, vendors are beginning to show them how to sustain the growth by trading customers up to a more premium, higher-priced product--as is the case currently in the tuna category. Vendors such as Bumble Bee have brought more dollars into the category by convincing retailers to substitute chunk light for solid white albacore, a strategy that has helped Bumble Bee grow dollar sales almost three times faster than units. "Consumers are still going to be looking for tuna fish. They now expect that drug stores will have it," Shanker said.

Drug's top 20: pantry-fill

                              $ Sales  % Change  $ Share *

 1. Folgers ground coffee       $22.9    11.1%     46.4%

 2. Starkist tuna                11.6     8.2      50.4

 3. Jello gelatin dessert
    mixes                         9.4    24.6      96.6

 4. Maxwell House
    ground coffee                 9.1   -13.4      18.4

 5. Bumble Bee tuna               6.8    20.0      29.4

 6. Maxwell House Master
    Blend ground coffee           6.5     5.4      13.2

 7. Kellogg's Frosted Flakes
    cereal                        6.2    12.4       7.0

 8. Kellogg's Raisin Bran
    cereal                        6.0    22.8       6.7

 9. Celebrit canned ham           5.8     7.7     100.0

10. Taster's Choice
    instant coffee                5.6   131.8      50.1

11. Post Honey Bunches
    of Oats cereal                5.6    44.7       6.3

12. General Mills Cheerios
    cereal                        5.1    13.8       5.8

13. General Mills Honey Nut
    Cheerios cereal               5.1    23.7       5.8

14. Quaker Hot Cereal/
    Oatmeal                       5.0    26.3      72.8

15. General Mills Cinnamon
    Toast Crunch cereal           4.5    23.3       5.1

16. Chase & Sanborn
    ground coffee                 4.2   324.0       8.6

17. Chicken of the Sea
    canned tuna                   4.0    40.8      17.6

18. Kellogg's Froot Loops
    cereal                        3.9     5.8       4.3

19. General Mills
    Lucky Charms cereal           3.7    18.2       4.1

20. Heinz ketchup                 3.6    39.2      93.1

Source: Information Resources Inc. for the 52 weeks ended July 14

* Share of category in drug stores