Drug stores find diet/weight loss and sports nutrition a 'natural' fit

Drug Store News, August 18, 1997 by Rob Eder

Dieters have undergone a shift in consciousness in recent years, and vendors and retailers have taken notice. Weight loss isn't about chemically abusing the body and skipping meals anymore. In this age when consumers are rediscovering the gifts of nature, many--although certainly not all--chain drug retailers agree that the diet/weight loss and sports nutrition categories have arrived at a crossroads, where the chemically formulated is beginning to give way to the naturally occurring.

"Lately customers are getting away from chemically based products," said Steve Upham, a buyer at the Rhode Island-based Brooks Pharmacy. "Our theory is to keep up with the current trends in the category, and the general consumer trend is definitely moving in the direction of more natural care products." At Brooks, keeping a close ear to the consumer pulse is an absolute requirement for maximizing profitability in a diet/weight loss department that averages just 6 to 8 feet in size.

Frank DeLeeuw, a category manager at Kmart, reports a similar trend developing in recent years. "What you see is the consumer that is dieting these days is deeply concerned about their daily vitamin requirements," he said. "There tends to be the same customer across the board--the person that is into weight loss is also interested in maintaining his or her health."

This having been said, it's not surprising that most retailers have aimed toward greater proximity between weight loss and vitamins and supplements. "It's adjacent to vitamins wherever possible," DeLeeuw said of Kmart's diet/weight loss department, which runs 17.5 feet to 20 feet on average.

Some chains, such as Phar-Mor and Rite Aid, have even gone so far as to develop a store-within-a-store concept in several select locations, devoting as much as 48 feet, and merchandising the categories together under the umbrella of natural care.

Brooks, Happy Harry's and several other smaller regional chains run adjacencies between diet and vitamins/supplements. Conversely, in Walgreens stores, where, on average, in-store real estate runs in slightly longer supply, diet/weight loss stands alone as close to the pharmacy counter as possible.

New products invigorate sales

As with most categories, most retailers said new products drive sales. However, given space limitations, before a new product makes the shelves of a Brooks Pharmacy, it has to pass Upham's muster. "When a manufacturer presents a new item to me, it has to make sense," he said. "And, not just as the buyer of a chain drug store, but as a consumer. When they can convince me that they can convince the customer, then I consider taking on the product."

Happy Harry's vice president of merchandising, Jon Rudden, agreed that new products pump life into the weight loss category, especially given the purchasing habits of the dieting customer. For Rudden, injecting new products into the merchandise mix spells more flexibility of choice for consumers, and thus, drives weight loss sales, which he said survive off a base of revolving-door customers.

And, the good news is the category is hopping with new products.

"We believe that to a large degree, diet customers are repeat customers," Rudden said. "Generally, they have tried some other product and they return looking for something else, something new and different that might actually work for them."

While the new wave of natural products has given consumers new reasons to be excited about the diet category, established brands still carry great weight.

In fact, at Walgreens, the theory is that the category is driven by familiar product names, such as Thompson Medical's Dexatrim and Slim Fast. "Whatever direction Slim Fast and Dexatrim go, that's the direction the whole category goes," said Walgreens spokesperson Michael Polzin.

A large reason for the Slim Fast brand's continued success at retail is the company's ongoing commitment to consumer advertising. "We spend a tremendous amount of money on television and this continues to be the Slim Fast heritage," said marketing director Marc Covent.

The company is also able to build excitement via new products, such as Slim Fast Jump Start, which launched in May. In addition to TV advertising, Slim Fast Jump Start was supported by an FSI in June and it will receive another push with an additional FSI Sept. 21.

A majority of retailers told Drug Store News that Slim Fast Jump Start has provided a significant boost to weight loss sales. "Slim Fast can barely keep up with consumption," Upham said, "because they have consumers convinced that they can lose weight quickly and they have a guarantee to back up that claim."

Retailers are also excited over the performance of Applied Nutrition's Diet System 6, a blend of six all-natural herbal ingredients combined to work synergistically to burn fat six ways, the company says. The product, which had already gained national distribution in Wal-Mart, Eckerd and American Drug Stores by the start of the National Association of Chain Drug Stores Marketplace Conference in June, continues to draw attention from chain drug buyers such as Upham who are eager to cash in on the natural care consumer craze. Thanks to a suggested retail of $12.95, retailers are perhaps most excited by its return, producing margins of nearly 40 percent.