Herbals enrich supplement sales

Drug Store News, August 5, 1996 by Mike Troy

Expanded offerings of vitamin, mineral and herbal supplement products are generating customer traffic and driving chain drug sales to new heights.

For the record, Information Resources Inc., data on the category show sales of vitamins, including minerals and herbal products, in all outlets has increased 10.3 percent to nearly $2 billion. Accounting for about 51 percent of that figure are drug stores, with sales of slightly more than $1 billion for the 52-week period ended May 19, 1996. For a more detailed breakdown on market shares of various category segments in drug, supermarket and discount stores see the charts below.

Inciting nutritional product sales for several years now has been the mass media's fascination with stories relating to the benefits of nutritional supplements. Such positive accounts have transformed supplements, primarily herbs, into a category with mainstream appeal from one whose consumer base was previously limited to a dedicated group of users who frequented health food stores.

Demand is up, so is selection

Chain drug operators large and small have responded to inc.-eased consumer demand by expanding product offerings and shelf space. Products are promoted with greater frequency, and chain drug buyers report they are mo-re receptive when manufacturers start talking about new items.

"When you look at the overall category of vitamins and herbals, our sales are up double digits primarily on the strength of individual items such as melatonin," said a category manager at a large regional chain. "We definitely view the category as a destination department and profit generator. Most of our stores have a minimum of 36 feet, and we promote it heavily with three or four items featured each week."

Another regional retailer with stores in the West said, "We've always been on the cutting edge with large vitamin departments ranging from 20 to 36 feet. We are looking at increasing that because there are a lot of new products and departments we think have some synergism."

For example, the vice president of merchandise of this chain said it makes sense to merchandise vitamins, herbs, supplements, diet aids and meal replacements was one large department.

Go west for herbals

West Coast chains with larger format stores, such as Thrifty PayLess, Long's, Burtell and American Drug's Sav-on division, have traditionally devoted more space to the category than east-of-the-Mississippi counterparts with smaller format stores such as Revco, CVS and Rite Aid. In fact, one large northeastern chain just last year added herbs and expanded its planogram from eight to 12 feet.

"I am still under spaced compared to most of my competition, but we are gradually turning it into a destination department, and our prototype stores have planograms in the 16 to 18 foot range," said a buyer at a large northeastern chain "The problem is if you are going to stay in front of the pharmacy, which is where we believe the appropriate position is, you don't have much more room than that."

But in the nutritional category it seems retailers can't afford to not find room for new items. As a buyer at one large chain put it, "If someone had come in here to tell us how well melatonin was going to do before the first articles broke, they would have been laughed out of the office. Now when they come in with something like DHEA you pay more attention.