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APRIL 2019

Pharmacy: The World Speaks

P.104

Leaders

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Vol. 41 No. 4 DrugStoreNews.com

FEATURES

44 One-On-One with Piping Rock’s Kim Vigliante

28 Emerging Brands Report HRG’s picks for the top launches from the last year

130 Last Word with David Orgel Consulting’s David Orgel

46 Focus On: Clio 48 Retail Pacesetters

INSIDE BEAUTY

DSN spotlights 20 retailers that are making a difference in the industry

86 Sun Care Mineral-based products, variety heat up the category

COLUMNS

92 Sun Care Products

8 Editor’s Note

94 Beauty on the Rebound

12 Industry News

Companies focus on trends and wellness to spur sales

26 Products to Watch

100 One-On-One

34 Counter Talk

with Lique’s Kristin Bibb and Ashley O’Rourke

with Facebook’s Carlos Garcia

36 Counter Talk with AAHP’s Mark Land

38 Counter Talk with pharmacist and professor Michael Schuh

102 Spotlight On: Skin Care

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PHARMACY 104 The World Speaks Pharmacy’s leading voices offer their assessment on the state of pharmacy

40 One-On-One with NasoNeb’s Bill Flickinger

117 Generics REX Awards 2019

42 One-On-One

Shining a light on top companies in generics

with Dr Reddy’s Labs’ Marc Kikuchi

HEALTH 122 Sexual Wellness Focusing on awareness and key demographics can fuel category growth

SOCIAL

128 Sexual Wellness Products

Facebook.com/ DrugStoreNews Twitter.com/ DrugStoreNews

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DSN (ISSN 0191-7587) is published monthly 12 times a year by EnsembleIQ, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription rates: Manufacturers, schools, libraries and all others allied to the field $119. Canadian subscribers $129. Foreign subscribers $225. Periodicals postage paid at Chicago, IL, and additional mailing offices. POSTMASTER: Please send address changes to DSN, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Canada Post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. For change of address, six weeks notice to Drug Store News, P.O. Box 3200, Northbrook, IL 60065-3200 is requested. Give old and new address and zip code. If possible, enclose address portion from cover on previous issue. Subscription changes also may be emailed to drugstorenews@omeda.com, or call 847-564-1468. Vol. 41, No. 4, April 2019. Copyright © 2019 by EnsembleIQ. All rights reserved.

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April 2019 DRUGSTORENEWS.COM

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EDITOR’S NOTE

Amazon’s Swift Current The speed at which Amazon adapts its strategy can be informative for its competitors By Seth Mendelson

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on’t think for a second that Amazon is above the fray when it comes to retailing at the end of the second decade of the 21st century. Quite to the contrary, the giant digital company, which desperately is trying to become a brick-and-mortar play at the same time, is feeling the pain of changing consumer shopping patterns. The company announced earlier this year that it was closing its domestic pop-up store operation in favor of concentrating on other aspects of retail, specifically a cashless convenience Seth Mendelson Editor in Chief/ store format and, possibly, gift stores. Associate Brand And, as we speak, the company’s venture into traDirector ditional supermarket retailing, with the acquisition of Whole Foods Market several years ago, does not yet seem to be paying the dividends that many expected. Welcome to retailing today. Get used to it and get ready to change — fast. While Amazon and a few other digital companies are greatly responsible for the change in consumer shopping habits, these companies cannot take all the credit for how shoppers go to market. In fact, some may argue that traditional retailing was dramatically changing well before the digital players arrived. Consumers, they said, were simply getting smarter and more fickle with their shopping decisions, and those retailers that failed to stay on their toes were doomed to extinction.

But, far and away, the one operation that is fastest to the draw when it comes to experimentation and changing is Amazon. I can name quite a few of these merchants that started to fail way before the digital era exploded on them. Those names include Sears, Kmart, JCPenny and even Macy’s. As I have stated numerous times before in this space, the retailers that survive will be the ones that can develop quick changes in strategy and implement them in a New York minute. Walmart leads the way in this regard as officials at the giant operation seem to understand that staying in one spot makes for an easy target. Target, though starting slowly, also has caught on to this trend. CVS Pharmacy and Walgreens, also slow out of the gate, have made very good progress in developing new programs that will embrace shoppers and save them time, money and, most importantly, a level of stress when discussing health-related issues. But, far and away, the one operation that is fastest to the draw when it comes to experimentation and changing is Amazon. The company is not afraid to try new things and it is not afraid to fail. As it has shown time and time again, failing is a sometimes expected result of sticking your neck out. Of course, it also could lead to success. Think about that for a few moments. dsn

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An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Vice President, Brand Director Eric Savitch (856) 489-3336, esavitch@ensembleiq.com Editor in Chief /Associate Brand Director Seth Mendelson (212) 756-5160, smendelson@ensembleiq.com EDITORIAL Associate Managing Editor David Salazar (212) 756-5114, dsalazar@ensembleiq.com Senior Editor Sandra Levy (845) 893-9573, slevy@ensembleiq.com Desk Editor Maria Manliclic (212) 756-5093, mmanliclic@ensembleiq.com Online Editor Gisselle Gaitan (212) 756-5138, ggaitan@ensembleiq.com SALES & BUSINESS Beauty Director Laura Fontana (440) 724-4369, lfontana@ensembleiq.com Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Brand Marketing Manager Mary Ellen Magee (856) 419-8411, mmagee@ensembleiq.com Production Manager Jackie Batson (224) 632-8183, jbatson@ensembleiq.com Director of Audience and Data Gail Reboletti (224) 231-6363, greboletti@ensembleiq.com PROJECT MANAGEMENT/PRODUCTION/ART Vice President Production Derek Estey (877) 687-7321 x 1004, destey@ensembleiq.com Creative Director Colette Magliaro cmagliaro@ensembleiq.com Art Director Amy Kelkenberg PRESIDENT Consumer Goods Retail Business Jennifer Litterick (647) 946-9219, jlitterick@ensembleiq.com CUSTOMER SERVICE Having a problem with your subscription? Send us full details with the mailing label of the last copy you received, along with your telephone number. Write to: Circulation Fulfillment Director, Drug Store News, P.O. Box 3200 Northbrook, IL 60065-3200; email drugstorenews@omeda.com; or call (847) 564-1468 CIRCULATION LIST MANAGER Elizabeth Jackson MeritDirect (847) 492-1350 x 318. REPRINTS PARS International, LF-Reprints@parsintl.com, (212) 221-9595 x435, tinyurl.com/LF-reprints. Single copy price is $15 for a regular issue and $100 for a statistical issue. PERMISSIONS For permission to reuse material from Drug Store News/DSN (ISSN 0191-7587) please access www.copyright.com or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, (978) 646-2600, (855) 239-3415. CCC is a not-for-profit organization that provides licenses and registration for a variety of uses.

CORPORATE OFFICERS Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Financial Officer Dan McCarthy Chief Operating Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several

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ADVERTORIAL | EXECUTIVE LEADERSHIP SERIES: WESTROCK

Retail Re-Emerging: Taking the Reins of Differentiation Leon Nicholas, vice president, Retail Insights & Solutions at WestRock

I

t was not long ago that the headlines trumpeted the decline of brick-andmortar retail, as phrases like the “death of retail” and “retail apocalypse” characterized the national mood. Fast forward to 2019, and the tone could not be more different. Across the trade, retailers are investing billions of dollars in store remodels, often incorporating the latest in experiential digital technology that must meet the needs of today’s discerning shopper. Shoppers have responded with their wallets, as retailers have delivered a string of positive comparable store sales across a wide variety of formats in recent quarters. Following a period of retrenchment and rationalization of indistinguishable banners, the retail industry today has emerged stronger, more differentiated and more shopper-focused than at any time in recent memory. Of course, much work remains to be done for retailers to solidify their gains, but brick-and-mortar chains are embracing the core advantage that they have always possessed: their very physicality and the benefits of physical presence that only a store can provide. When Amazon recently announced that it plans to open grocery stores across the United States, it was a clear signal that brick-and-mortar has a significant role to play in the future of retail. Yet, rather than just “storing” merchandise, retailers are adding layers of differentiation onto physicality. This differentiation is revealing itself across four areas, including merchandising engagement, digital activation, pick-up options and services merchandising, each of which is essential to retail’s resurgence in the years ahead. Let’s explore each in turn.

Merchandising Engagement and Relevance 10

While the notion of “retail-tainment” still has merit, engaging a time-pressured shopper with relevant, appealing merchandising has become a priority. This balance of appeal, convenience and functionality has manifested itself in a renewed focus on re-imagining the merchandising of center store categories. New fixtures, lighting and digital signage are revitalizing formerly staid departments across categories ranging from confections, pet, beverage and laundry care. In some cases, this revitalization has meant the growth of store-within-a-store destinations; in others, efforts to engage shoppers by leveraging customized displays as solutions sell, in effect, the entire store’s proposition as a balance between wants and needs. More than ever, cross-category merchandising, particularly in many of the nation’s

regional and smaller format stores, has led to a renewed focus on trip purpose (i.e., occasion solutions) vs. trip timing (i.e., immediate need or fill-in). The net result are stores that are more contextualized and differentiated. Stores get the benefit of higher conversion, and shoppers rate stores higher for relevance and convenience.

Digital Activation

The convergence of physical and digital assets in stores has been another factor in retail’s re-emergence. Stores are increasingly leveraging digital signage, both in aisles and on endcaps, to engage shoppers. Importantly, these digital screens enable interaction with shoppers through, for example, meal solution guidance or beauty regimen recommendations. In many cases, such screens can be

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dynamically responsive by changing visuals based on geographic variables (e.g., temperature, zip code, or pollen count) or shopper recognition algorithms (e.g., shopper age, gender and even mood). Mobile applications in stores are producing the digital advances with the greatest impact. Retailer apps featuring product location, prescription drug pick-up times and shopping list management are commonly used, especially by younger shoppers. Advances in “connected packaging” are further enabling shoppers to scan product surfaces to receive additional information and even customized messaging and promotions directly on their phones. In addition, personalized messaging and pricing can be incorporated onto both the shelf-based digital screens and mobile devices through QR code scanning or Bluetooth beacons. The result is the development of the “store as a media channel,” offering retailers and brands to transfer traditional ad budgets from traditional media (TV, print, circulars) to the emerging opportunity to message to the millions of shoppers in-store. In effect, these advances turn a transaction into an interaction, personalizing the shopper’s experience in the store.

From Store to Distribution Center

Online order pick-up is probably the single greatest change implemented by stores. Overshadowing the benefits of home delivery, so-called “BOPIS,” or buy online, pick-up in-store, efforts enable shopper convenience on her terms, turning the store into a distribution center that holds product until it is convenient for the shopper to pick up, at no additional cost to the shopper. Households with kids rate these services highly for the time savings alone, and shoppers with more limited mobility can effectively shop more of the store’s assortment with greater ease. Though retailers have much yet to accomplish in order to balance inventory management and store labor complexity, the reduction in shipping costs to shoppers’ homes is substantial. The next phase will focus on providing an incentive for pick-up shoppers to add incremental items to their orders.

Services Merchandising

In light of online incursions, stores have a mandate to drive store productivity. Compared to online, services provide a unique differentiator while driving traffic into the store. Long-accustomed to pharmacy counters and more recently clinics,

shoppers are now finding an array of other services at traditional retailers that had normally been offered only at club retailers. These include restaurants (so-called “grocerants”), fitness classes, auto care and dietician services. Successful retailers are frequently pairing such services with products available in store. For example, offering to cook the meat purchased, providing discounts on products that dietitians recommend, or coupling savings on over the counter (OTC) products with clinic services. In these and other ways, the value of the service is enhanced to drive the overall perception of the store as a destination. Until the day comes when a sports physical or flu shot can occur online, stores can count on a traffic (and revenue) stream to their stores as a unique advantage. Far from a state of decline, the industry that has emerged after a period of retrenchment is today more relevant to the shopper and better equipped for future growth. Retail store productivity, via efficient conversion, will be achieved through greater shopper productivity, via convenience and increasingly digital engagement. That formula will likely make the next five years in retail more dynamic than the last 25.

Retail Reimagined Attract. Engage. Execute. Measure. westrock.com/displays

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INDUSTRY NEWS

Nature’s Truth Offers Hemp Oil Taking its cue from consumer interest in a growing trend, Nature’s Truth from Piping Rock has introduced hemp seed oil supplements in liquid and quick release soft-gel capsules. The hemp oil for the products comes from Canadian-grown hemp seeds that are then cold pressed. The oil is rich in omega-fatty acids, including omega-3, 6 and 9. Nature’s Truth’s hemp oil offerings are non-GMO and free of gluten, dairy and artificial flavors. Nielsen numbers for the year ended Jan. 25 show hemp sales increasing by nearly 600%.

Bioré Uses Blue Agave, Baking Soda to Solve Combination Skin Worries For consumers who struggle with part oily and part dry skin, Bioré has a new set of products that could help solve some of those skin worries. The Kao USA brand is launching a new collection of Blue Agave + Baking Soda products that help clean and nourish combination skin. Using the cleansing powers of baking soda and the conditioning benefits of blue agave, Bioré aims to help those looking for ways to exfoliate and deep clean their skin, while also conditioning dry skin areas. Featured in the collection are: • Blue Agave + Baking Soda Balancing Pore Cleanser, developed for combination skin, cleanses the oily parts of the skin, smooths and conditions the dry and rough areas, removes dirt and impurities from pores and exfoliates away dead cells; • Blue Agave + Baking Soda Instant Warming Clay Mask, which is pH balanced, purifies and refines skin by absorbing excess oil. It instantly warms on skin contact to open pores and get rid of dirt, oil and sebum that could be clogging pores; and • Blue Agave + Baking Soda Whipped Nourishing Detox Mask, made with menthol for a pore-tingling sensation, is formulated for combination skin. It soothes and conditions skin, eliminates impurities and leaves skin feeling fresh. The new Bioré Blue Agave + Baking Soda Balancing Pore Cleanser and Instant Warming Clay retail for $5.99 each, and the Whipped Nourishing Detox Mask retails for $6.49. Consumers can find the products on the shelves of select food, drug and mass merchant stores.

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INDUSTRY NEWS

Flawless, Finishing Touch to be Acquired by Church & Dwight The popular Flawless and Finishing Touch hair removal products soon will have a new home. Church & Dwight has reached an agreement with Ideavillage Products to acquire the two brands. “Women today are more focused on hair removal from their bodies. Flawless provides simple, fast, dermatologist-approved solutions for face, brows and legs. Flawless is a beloved brand by look-conscious consumers who want to be ‘selfie ready’ at any moment,” said Matthew Farrell, Church & Dwight’s CEO. “Flawless represents a powerful addition to our specialty hair care portfolio, which includes Batiste dry shampoo, Viviscal hair thinning supplements and Toppik hair fibers.” The definitive agreement between both companies is for approximately $475 million in cash, plus an additional earn-out payment of up to a maximum $425 million. “Ideavillage is recognized for its highly skilled management team with fast decision making, rapid new product development and speed to market. We are excited to work with [Ideavillage, CEO] Andy [Khubani] and his team on this brand,” Farrell said. “We expect our global footprint and sales expertise to drive significant sales growth via new distribution and further expansion into international markets.” Ideavillage will support the Flawless business through a separate long-term services agreement with Church & Dwight, the companies said. “We have found the perfect partner for our Flawless brand and for accomplishing our vision of expanding into new categories and markets,” Andy Khubani, CEO of Ideavillage, said. “Our cultures complement one another beautifully, and I’m very excited and confident in the future.” The acquisition is expected to close in the second quarter of 2019.

Cialis Generics Get Approvals, Launches Five generics companies have received regulatory approval for or introduced generics of Eli Lilly’s erectile dysfunction drug Cialis (tadalafil) in recent weeks. Camber Pharmaceuticals, Dr. Reddy’s Labs, Lupin, Alembic Pharmaceuticals and Zydus Cadila all have gotten the

Food and Drug Administration’s nod or launched their product. Camber’s generic is available in 2.5-, 5-, 10- and 20-mg dosage strengths in 30-count bottles. Dr. Reddy’s and Zydus also offer those dosage strengths. Alembic’s generic was approved in the same four strengths, as was Lupin’s. In addition to erectile dysfunction, the drug can treat benign prostatic

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hyperplasia on its own or alongside erectile dysfunction. The Cialis brand and generic market was valued at roughly $1.7 billion for the most recent 12 months ended in January, according to IQVIA data.

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INDUSTRY NEWS

Confirm Biosciences’ HairConfirm Gets National Distribution San Diego-based diagnostic test maker Confirm Biosciences’ HairConfirm drug test is getting nationwide distribution. The

product, which can test for up to 14 commonly abused drugs, has launched into CVS Pharmacy stores. HairConfirm provides a 90-day look at substance abuse, compared with the 2-to-3 day window offered by urine tests. The test offers a private Specimen ID, and test results can be accessed through a secure online portal to maintain anonymity, Confirm Biosciences said. HairConfirm is approved by the Food and Drug Administration, and the tests are completed by Confirm Biosciences’ CLIAcertified lab. Results are provided in 3-to-9 days, along with an easy-to-read report. The company also provides customer support and resources to help guide discussions with loved ones. The HairConfirm kit retails for $19.99 plus a laboratory fee — $59 to test for 10 drugs or $89 for a 10-drug test plus four prescription opioids.

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Gillette Venus, Vera Bradley Unveil Razor Collection Gillette Venus is adding a bit of a

fashion flourish to its popular line of women’s razors. The Procter & Gamble brand is partnering with designer Vera Bradley on the Vera Bradley + Venus designer shave collection. Featuring Bradley’s popular daisy dot paisley pattern, the designs will be featured on a selection of specialedition products. Part of the collection will include disposable razors and cartridges, as well as a scented shave gel, the company said. “Since launching in 2001, Gillette Venus has brought innovation to women’s beauty routines with products that women trust will perform and want in their bathrooms. The Vera Bradley + Venus collection offers just that,” said Alessandra Dolfini, the global Venus vice president. “Vera Bradley strives to create thoughtful solutions for women that are both functional and beautiful, making the brand a perfect partner for the collection.” The full Vera Bradley + Venus collection includes:

• Razor handles and two razor blade refills; • Extra Smooth Swirl Razor Blades in a 4-or-6 count; • Disposable razors in a count of three; and • Blushed Bloom shaving cream in a 6-oz. size. “Vera Bradley is honored to work with this iconic brand,” Rob Wallstrom, CEO of Vera Bradley, said. “At Vera Bradley, we are all about creating beautiful solutions for our customers, and this collection will be a terrific one!” The Vera Bradley + Venus collection, which hit Target stores in early April, also is available for purchase on the retailer’s website.

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INDUSTRY NEWS

Heinz Continues to Combine Condiments with Kranch

Nando’s Perinaise Spices up Mayonnaise

Heinz is continuing its

Nando’s, a popular South African restau-

new trend of blending two popular condiments together to create one super sauce. After teasing the product’s launch on social media, Kranch — a special combination of ketchup, ranch and a special blend of spices

— has been chosen to join the brand’s growing condiment family. Kranch is the fourth condiment combo from the company. The trend began with Heinz getting consumer opinion on what sauce they would like to see before launching its first hybrid product — the brand’s mayonnaise and ketchup combination, which was

dubbed Mayochup. Next came the combination of mayonnaise, barbecue sauce and a special blend of spices to create Mayocue. This condiment launch then was accompanied by the simultaneous unveiling of Mayomust — a blend of mayonnaise, mustard and a special blend of spices. Kranch, which will be available for purchase in a 19-oz. squeeze bottle, contains 100 calories per two-tablespoon serving, the company said. Shoppers can find the product on the physical shelves of the condiment aisle at retailers nationwide for the suggested price of $3.49, as well as online.

rant chain in Europe, is bringing some heat to traditional mayonnaise stateside. The restaurant chain, known for its signature Peri-Peri sauce — recognized as the most popular sauce from England to Australia to South Africa — is looking to make a splash in the United States with its new Perinaise sauce. Nando’s new Perinaise sauce is made with a blend of African bird’s eye chili, sun-ripened lemons, fresh herbs, exotic spices and cage-free eggs. In addition, the sauce is gluten-free and kosher, and made without the use of artificial flavors or colors, the company said. Nando’s Perinaise will be available in three different flavors and heat levels: hot, which has a high heat level; original, which has a medium heat level; and lemon and herb, which carries a mild heat level. The sauce is available at such retailers as Kroger, Safeway and Amazon this spring at the suggested retail price of $3.99 each.

M&M’s Adds Hazelnut Spread Center to its Chocolate Candies There’s a new addition to the evergrowing M&M’s portfolio of candy. The Hackettstown, N.J.-based company, part of the Mars family of brands, is introducing M&M’s Hazelnut Spread Chocolate Candies, which features hazelnut spread covered in milk chocolate. The product is a permanent addition to the brand’s lineup of products. “Chocolatey hazelnut spread unlocks a side of indulgence that’s all its own, so we wanted to tap into that mania and bring something to life that our fans would go crazy for,” Allison Miazga-Bedrick, brand director at M&M’s, said. “It’s no secret people love hazelnut spread and love M&M’s, so we can’t wait to see the reaction to this breakthrough taste experience.” Before it hit shelves, the brand gave fans an opportunity to sample the candy by opening a one day pop-up stand in the middle of New York City’s Grand Central Terminal. The stand allowed consumers to express their excitement of the product for a bag of the new candy. Shoppers can find M&M’s Hazelnut Spread Chocolate Candies on the shelves of retail stores nationwide in April in a single, share size and sharing size stand-up pouch.

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INDUSTRY NEWS

MyBite’s Chocolate Lineup Expands MyBite Vitamins is expanding its line of dietary supplements that

are designed to look and taste like best-selling chocolate confectionary treats, according to officials at the Vancouver, Wash.based company. The 10-SKU line of vitamins launched last fall in Target and will expand into other retailers this year. Products in the line include milk chocolate adult multivitamins, multivitamins for men and kids, and energy bites. Dark chocolate varieties exist for multivitamins for women, calcium, vitamin D and triple-defense immune. Products are priced between $12.99 and $15.99 each. “MyBite Vitamins is the innovation that your customers have been waiting for,” said company president Kate Jones, who co-founded of the line along with Marty Rifkin. “A chocolatey bite with smooth caramel and roasted peanuts? There’s nothing else this delicious in the vitamin aisle and that’s helping to bring lapsed users back into the category.” Jones said that retailers need to help educate consumers to maximize sales. “With MyBite Vitamins, tasting is believing so sampling with the customer is hugely beneficial,” she said. “Additionally, any space to educate the consumer is key. MyBite Vitamins are 25 calories or less with limited sugar and no

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artificial colors, flavors or preservatives, so consumers can feel confident they’re enjoying the same nutritional benefits they’ve come to expect from traditional formats, but with a satisfying, indulgent taste profile.”

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PET SPECIALTY

SUPPLIER PERSPECTIVES

NESTLE´ PURINA dŚĞdŝŵĞŝƐEŽǁƚŽƌƵƐŚhƉzŽƵƌWĞƚdƌĞĂƚ^ĞĐƟŽŶ Shoppers Look to Treats to Improve Their Pet’s Health As more and more pet owners ĂƌĞďĞĐŽŵŝŶŐĂĐƟǀĞůLJĞŶŐĂŐĞĚ and informed about their fourlegged friend’s health, targeted ŽƌĨƵŶĐƟŽŶĂůĨŽŽĚĂŶĚƚƌĞĂƚƐĂƌĞ growing in popularity. Consumers ĂƌĞůŽŽŬŝŶŐĨŽƌŶƵƚƌŝƟŽŶƚŚĂƚ=ƐŶŽƚ only enjoyable, but also healthy and enables their pet to live his best life. In fact, ǁŚĞŶŝƚĐŽŵĞƐƚŽƉĞƚ ƚƌĞĂƚƐʹĂĐĂƚĞŐŽƌLJƚŚĂƚŚĂƐĂůǁĂLJƐ ŚĞůĚŐƌĞĂƚƉŽƚĞŶƟĂůĨŽƌƌĞƚĂŝůĞƌƐ ĂƐĂďĂƐŬĞƚďƵŝůĚĞƌʹϮϱƉĞƌĐĞŶƚ ŽĨƚŚĞĐĂƚĞŐŽƌLJŝƐĐƵƌƌĞŶƚůLJŵĂĚĞ ƵƉŽĨĨƵŶĐƟŽŶĂůƚƌĞĂƚƐ> It’s these ďĞƩĞƌ?ĨŽƌ?LJŽƵƚƌĞĂƚƐƚŚĂƚĂƌĞ growing faster than the rest of the treat category (at nearly 5 percent growth vs. 3.6 percent). WĞƚƚƌĞĂƚƐ ƚŚĂƚƐƉĞĐŝĮĐĂůůLJĂĚĚƌĞƐƐĚĞŶƚĂů ŚĞĂůƚŚŵĂŬĞƵƉϭϮƉĞƌĐĞŶƚŽĨƚŚĞ ƚŽƚĂůƉĞƚƚƌĞĂƚĐĂƚĞŐŽƌLJ> ^ŝŶĐĞ&ĞďƌƵĂƌLJŵĂƌŬĞĚEĂƟŽŶĂů Pet Dental Health Month, it’s important that consumers and retailers alike understand the importance of good oral care for pets, as well as the opportunity dental treats present to build sales in the treat aisle.

KƌĂů,ĞĂůƚŚŽŶĐĞƌŶƐĨŽƌ WĞƚƐ Periodontal disease is the most common dental disease found in both adult dogs and cats. It develops as a result of bacteria and plaque that make their way under the gum line. Signs of periodontal disease include bad breath, redness along the gum line, tartar ĂĐĐƵŵƵůĂƟŽŶĂŶĚŽƌĂůƉĂŝŶ@ƐƚŚĞ disease progresses, it becomes ƉĂŝŶĨƵů3ĂŶĚŝĨůĞŌƵŶĐŚĞĐŬĞĚ3ǁŝůů result in the loss of the tooth.

The good news is that with consistent home dental care and regular vet visits, periodontal disease can be prevented.

Oral Health Council, help clean hard-to- reach places and are ƐĐŝĞŶƟĮĐĂůůLJƉƌŽǀĞŶƚŽƌĞĚƵĐĞ tartar buildup on a dog’s teeth.

dŚŝƐŶĞǁƉƌŽƉƌŝĞƚĂƌLJƌĞĐŝƉĞĮŐŚƚƐ bad breath at the source versus ƚŚĞƚƌĂĚŝƟŽŶĂůŵĞƚŚŽĚŽĨŵĂƐŬŝŶŐ it.

ƚ,ŽŵĞĞŶƚĂůĂƌĞ^ŽůƵƟŽŶƐ

Under the same DentaLife® brand, Purina introduced the Advanced Clean Dental Chew for dogs. The new treats are made with a dense, chewy texture designed to keep your dog chewing longer. Together with its patented twisted tripleridge shape, DentaLife® Advanced Clean is able to reduce tartar buildup and deliver a powerful deep clean.

dŚĞĞŶƚĂůKƉƉŽƌƚƵŶŝƚLJĂƚ Retail

ƐĨƵŶĐƟŽŶĂůƉĞƚƚƌĞĂƚƐŝŶĐƌĞĂƐĞŝŶ popularity and demand, a number ŽĨŶĞǁƉƌŽĚƵĐƚƐ3ƐƉĞĐŝĮĐĂůůLJ those formulated to help maintain ŐŽŽĚŽƌĂůŚLJŐŝĞŶĞ3ĂƌĞŚŝƫŶŐƚŚĞ marketplace. Purina launched the successful DentaLife® brand of dog and cat treats early in 2016. DentaLife treats are made with wholesome ingredients and feature a crunchy exterior and chewy, porous inside that pets love. The treats, which are approved by the Veterinary

Purina DentaLife® also released ĐƟǀ&ƌĞƐŚTM in January 2019, ǁŚŝĐŚŝƐĂƌĞǀŽůƵƟŽŶĂƌLJƐĐŝĞŶƟĮĐ ďƌĞĂŬ?ƚŚƌŽƵŐŚŝŶĐŽŵďĂƫŶŐďĂĚ breath.

Pet retailers can take advantage of this trend by brushing up their ƚƌĞĂƚƐĞĐƟŽŶƐƚŽĨŽĐƵƐŽŶƚŚĞƐĞ ĨƵŶĐƟŽŶĂůƐŶĂĐŬƐ@ZĞƚĂŝůĞƌƐƐŚŽƵůĚ consider a monthly merchandising program that uses new merch units and secondary placements, plus highlight new items in the oral health segment. In doing so, they can realize incremental sales ĂŶĚƉƌŽĮƚƐ@

Purina trademarks are owned bySociété des Produits Nestlé S.A. Printed in USA.

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INDUSTRY NEWS

CoverGirl’s Simply Ageless Collection Revamps Formula CoverGirl’s Simply Ageless Collection is relaunching with the addition of a

brand-new concealer. The popular collection has been updated with a reformulation that includes hyaluronic acid and vitamin C in each of its products in order to incorporate more skin plumping and brightening effects, the company said. Featured products in the collection’s relaunch include: • Simply Ageless Instant Fix Advanced Concealer, a new addition to the lineup, covers dark circles and fine lines, has a lightweight formula with concentrated pigments, and contains hyaluronic acid and vitamin C. The concealer, which also hides discolorations under the eye, brightens and refreshes the under-eye appearance, comes in nine shades, and retails from $12.99 to $18.99; • Simply Ageless Instant Wrinkle Defying Foundation, which floats over wrinkles and does not accentuate them, has hyaluronic acid and vitamin C for 24-hour skin hydration. The foundation includes SPF 28 broad spectrum to guard against aging effects of sun damage, reduces the appearance of fine lines, minimizes pores, comes in 18 shades, and retails from $12.99 to $18.99; • Simply Ageless 3-in-1 Liquid Foundation, which hydrates and tones skin over time, has ultra-fine pigments to provide coverage of discoloration associated with aging skin; reduces the appearance of sun spots, age spots and dark spots; minimizes the appearance of fine lines and wrinkles; improves skin renewal; is available in 18 shades; and retails from $12.99 to $18.99; and • Simply Ageless Anti-Aging Foundation Primer, which hydrates skin and fights signs of aging, has micro-fillers, hyaluronic acid and vitamin C to moisturize skin. It retails from $10.89 to $17.49. The full collection can be found on the beauty shelves of mass-market, drug store, and food retailers nationwide, as well as on e-commerce sites. Prices are the sole discretion of the retailer, the company said.

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Extreme Showering. It’s a thing! Feel out loud with Zest® Body Wash & Bar Soap

AVAILABLE AT

CRAFTING EXTRAORDINARY EXPERIENCES

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INDUSTRY NEWS

Embrace Scar Therapy System Arrives on Walgreens Shelves Neodyne Biosciences’ Embrace line of scar therapy products can now be found on the first aid shelves of Walgreens stores

nationwide and online. Embrace’s Active Scar Defense — an FDA-cleared therapy system that also is clinically proven to prevent scar tissue formation and reduce the overall appearance of scars — is available in two sizes, medium (2.4 in.) and large (4.7 in.). Walgreens also will be offering Embrace Minimize, a product meant to help reduce the appearance and texture of older scars, in a 4.7-in. size. “Scarring that results from injury, as well as elective or medically necessary surgical procedures, can have severe physical and emotional implications,� said Kelley Lipman, president and CEO of Neodyne. “Embrace Active Scar Defense is uniquely designed to relieve the skin’s natural tension — which is the primary cause of scarring — to essentially stop scars before they start. We are thrilled to be partnering with one of the largest drug store chains in the U.S. to make Embrace broadly available to people looking to heal comfortably, while effectively reducing the appearance of visible, dark and raised scars.� Embrace Scar Defense features a patented applicator and 100%

silicone sheet that is made with medical grade adhesive, which achieves precise tension reduction on the skin. The end result is a lighter, thinner and flatter scar, the company said. Neodyne recently partnered with Serena Williams to help raise awareness for Embrace’s line of products. Williams, who had an unplanned C-section and emergency surgery following the birth of her daughter, used Embrace to manage the pain and discomfort associated with her recovery.

OCTOBER 23 – 25, 2019 Las Vegas Convention Center • Las Vegas, NV

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PRODUCTS TO WATCH

HRG’s March Madness New products with big potential stand out from the pack

T

hough March saw the return to daylight saving time and the The NCAA Division I Men’s Basketball Tournament, the new product team at Hamacher Resource Group still found time to assess 445 new products and select five standouts. The team’s picks for products with big potential on the shelf came from its assessment of 39 OTC products, 151 wellness products and 255 beauty products. HRG’s five products to watch from March are:

fast constipation and cramping relief. It is offered in 12-oz. bottles.

1

Dulcolax Liquid Laxative

Designed for consumers on the go, the Dove Go Fresh Deodorant Wipes, offered in a cucumber green tea scent, is alcohol-free. The Unilever brand’s product is formulated to be nonirritating and allows for odor to be wiped away any time.

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Dulcolax is branching out from its line of tablets. Parent company Sanofi introduced the magnesium hydroxide-based liquid laxative in a mint flavor. The stimulant-free laxative is designed to offer

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2

Always Pure Ultra Thin Pad Super with Wings

Procter & Gamble is continuing to expand its Always Pure line of natural feminine care products. The Ultra Thin Pad Super with Wings is being sold in packs of 21. The product is made with 100% organic cotton and the pads are free of chlorine bleaching, dyes and fragrances.

3

Dove Go Fresh Deodorant Wipes

4

Vicks Pure Zzzs Nightly Sleep Tablets

5

Neutrogena Blackhead Eliminating Strip to Scrub

Building on the success of its ZzzQuil brand, Vicks is branching out into the natural direction with its Pure Zzzs Nightly Sleep Tablets. The drug-free product is a melatonin-based sleep aid that contains chamomile and lavender to help users fall asleep naturally. The product comes in 60-count bottles.

The latest facial care product from Johnson & Johnson’s Neutrogena brand is looking to streamline the process. The blackheadeliminating product starts as a pore strip that dissolves in water, transforming into a face scrub. Formulated with salicylic acid, the product is gentle enough for daily use and comes in six-count boxes. dsn

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The first prenatal gummy with a good source of choline.â€

†This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

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EMERGING BRANDS REPORT

Future 50 Emerging Brands Standout new products from 2018

W

hile novelty is a key element to keeping customers happy, retailers rarely are faced with a shortage of products that might end up on their shelves. That’s where the new product team at Waukesha, Wis.based Hamacher Resource Group comes in. Throughout 2018, the new product team reviewed 2,587 new products across the health, wellness and beauty categories — up

7% from the number of products reviewed in 2017. The team rated products based on a weighted review of promotional support, product innovation, its earning potential and its category. From its review of products, HRG identified the Future 50 Emerging Brands, which encases the products that most set themselves apart based on sales indicators and community pharmacy distribution. dsn

DSN FUTURE 50: TOP 2018 NEW ITEM LAUNCHES, POWERED BY HAMACHER RESOURCE GROUP* DESCRIPTION

BRAND

CATEGORY

SUBCATEGORY

LAUNCH DATE

1

Aleve Back & Muscle Pain Tablets (24 and 50 count)

Bayer

Pain relief

Internal pain relief

2

Bausch + Lomb Lumify Redness Reliever Eye Drops (2.5 ml)

Bausch Health

Eye and ear care

Eye preparations

May

3

Robitussin Adult Honey Cough + Chest Congestion DM Liquid (4 oz.)

Pfizer

Cold and allergy

Cough-cold, flu and sinus

July

4

Biofreeze Soothing Pain Relief Cream (3 oz.)

Hygenic

Pain relief

External pain relief

August

5

Sensodyne Rapid Relief Toothpaste, extra fresh and mint flavors (3.4 oz.)

GSK Consumer Oral care Healthcare

Toothpaste and treatments

January

6

Band-Aid Hydro Seal Blister Heels Hydrocolloid Gel Bandages (6- and 10-count)

Johnson & Johnson

First aid

Wound and surgical dressings

January

7

Aspercreme Lidocaine Patches XL (3 count)

Sanofi

Pain relief

External pain relief

January

8

Systane Complete Optimal Dry Eye Relief Lubricant Eye Drops (10 ml)

Alcon

Eye and ear care

Eye preparations

April

9

Tums with Gas Relief Antacid/Antigas Chewy Bites, lemon and strawberry (28 count)

GSK Consumer Digestive Healthcare health

Stomach and nausea remedies

April

10

Vicks VapoCool Severe Medicated Drops, winterfrost flavor (18 count)

Procter & Gamble

Cold and allergy

Cough drops, sore throat relief

July

11

Crest Gum Detoxify Fluoride Toothpaste, deep clean and gentle whitening (4.1 oz.)

Procter & Gamble

Oral care

Toothpaste and treatments

February

12

Icy Hot Pain Relieving Cream Lidocaine Plus Menthol (2.5 oz.)

Sanofi

Pain relief

External pain relief

January

13

Fixodent Ultra Denture Adhesive Cream (2.2 oz.)

Procter & Gamble

Oral care

Denture care

February

28

March

Photos provided by HRG

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EMERGING BRANDS REPORT DSN FUTURE 50: TOP 2018 NEW ITEM LAUNCHES, POWERED BY HAMACHER RESOURCE GROUP* RANK

DESCRIPTION

BRAND

CATEGORY

SUBCATEGORY

LAUNCH DATE

14

DayQuil/NyQuil Severe Cold & Flu LiquiCaps (8 and 16 count)

Procter & Gamble

Cold and allergy

Cough-cold, flu and sinus

July

15

Halls Real Honey Cough Drops, honey vanilla flavor (30 count)

Mondelez International

Cold and allergy

Cough drops, sore throat relief

July

16

Listerine Sensitivity Mouthwash, fresh mint flavor (500 ml)

Johnson & Johnson

Oral care

Mouthwash

February

17

ThermaCare Ultra Pain Relieving Cream (2.5 oz.)

Pfizer

Pain relief

External pain relief

September

18

Mucinex Sinus-Max Pressure Pain and Cough Caplets (20 count)

RB

Cold and allergy

Cough-cold, flu and sinus

September

19

Listerine Ready! Tabs Chewable Tablets (8 count)

Johnson & Johnson

Oral care

Breath remedies

October

20

Ricola Cool Relief Oral Anesthetic Drops, icy menthol flavor (19 count)

Ricola

Cold and allergy

Cough drops, sore throat relief

July

21

Robitussin Adult Honey Nighttime Cough DM Liquid (4 oz.)

Pfizer

Cold and allergy

Cough-cold, flu and sinus

July

22

Depend Fit-Flex Underwear for Men Maximum Absorbency (large 17 count and x-large 15 count)

Kimberly-Clark

Incontinence

Disposable incontinence

February

23

Depend Fit-Flex Underwear for Women Maximum Absorbency (medium 18 count and small 19 count)

Kimberly-Clark

Incontinence

Disposable incontinence

February

24

Zim’s Max-Freeze Pro Formula Cold Therapy (Cooling Gel 4 oz. and Cooling Roll-On 3 oz.)

Perfecta

Pain relief

External pain relief

September

25

Zarbee’s Naturals Honey Cough Soothers + Mucus, lemon menthol flavor (14 count)

Zarbee’s

Cold and allergy

Cough drops, sore September throat relief

26

Secret Freshies Antiperspirant/Deodorant Invisible Solid Ball, cool waterlily and luxe lavender scents (5 oz.)

Procter & Gamble

Deodorants

Women’s deodorants

27

Florajen Women Multiculture Probiotic Supplement Capsules (30 count)

Clarion Brands

Feminine care

Feminine personal care

April

28

Act Dry Mouth Moisturizing Gum with Xylitol, sugar-free, soothing mint flavor (20 count)

Sanofi

Oral care

Oral remedies

February

29

Alka-Seltzer PM Heartburn Relief + Sleep Support Gummies, mixed berry flavor (46 count)

Bayer

Digestive health

Stomach and nausea remedies

June

30

Refresh Repair Lubricant Eye Drops (.33 oz.)

Allergan

Eye and ear care

Eye preparations

June

31

Cepacol InstaMax Sore Throat Pain Reliever Lozenges, berry frost flavor (16 count)

RB

Cold and allergy

Cough drops, sore September throat relief

32

Alka-Seltzer Plus Cold & Flu PowerMax Day and Night Liquid Gels (24 count)

Bayer

Cold and allergy

Cough-cold, flu and sinus

30

January

July

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EMERGING BRANDS REPORT DSN FUTURE 50: TOP 2018 NEW ITEM LAUNCHES, POWERED BY HAMACHER RESOURCE GROUP* RANK

DESCRIPTION

BRAND

CATEGORY

SUBCATEGORY

33

Colgate Optic White Stain Fighter Anticavity Fluoride Toothpaste, clean mint and fresh mint gel flavors (4.2 oz.)

ColgatePalmolive

34

Tums Extra Strength 750 Antacid Chewable Tablets Sugar-Free, melon berry flavor (80 count)

GSK Consumer Digestive Healthcare health

Stomach and nausea remedies

35

Theraflu Nighttime Severe Cold Power Pods, honey lemon flavor (8 count) Theraflu Daytime Severe Cold Power Pods, berry flavor (8 count)

GSK Consumer Cold and Healthcare allergy

Cough-cold, flu and sinus

August

36

ZzzQuil Pure Zzzs Melatonin + Chamomile & Lavender Gummies (24 count)

Procter & Gamble

Pain relief

Sleep aids and stimulants

February

37

Accu-Chek Guide Test Strips (25 count)

Roche Diagnostics

Diabetes care

Blood glucose testing

October

38

Gillette Mach3 Cartridges (4 count)

Procter & Gamble

Shaving and grooming

Men’s razors and refills

January

39

Johnson’s Cottontouch Newborn Face & Body Lotion (13.6 oz.)

Johnson & Johnson

Baby care

Baby health, beauty & wellness

July

40

Gold Bond Cracked Skin Fill & Protect Skin Protectant Cream (.75 oz.)

Sanofi

First aid

Wound treatments and skin relief

February

41

Luden’s Throat Drops, honey lemon flavor (25 count)

Medtech Products

Cold and allergy

Cough drops, sore throat relief

April

42

Pampers Complete Clean Wipes, baby fresh scent (72 count)

Procter & Gamble

Baby care

Disposable diapers and wipes

March

43

Tiger Balm Active Muscle Rub (2 oz.)

Prince Of Peace

Pain relief

External pain relief

September

44

Colgate Enamel Health Whitening Anticavity Fluoride Toothpaste, clean mint flavor (6 oz.)

ColgatePalmolive

Oral care

Toothpaste and treatments

February

45

Garnier Whole Blends Gentle Shampoo Oat Delicacy, shampoo and conditioner (12.5 oz.)

Garnier

Hair care

Beauty shampoo, conditioner and treatments

January

46

Act Dry Mouth Lozenges with Xylitol, sugar-free, honey-lemon flavor (18 count)

Sanofi

Oral care

Oral remedies

January

47

Vagisil Scentsitive Scents Daily Intimate Wash, white jasmine (12 oz.)

Combe

Feminine care

Feminine personal care

January

48

Burt’s Bees Lip Balm Tube, cucumber mint flavor (.15 oz.)

Burt’s Bees

Cold and allergy

Lip care

August

49

Schick Quattro for Women Razor + Cartridges (3 count)

Edgewell Personal Care

Shaving and grooming

Women’s razors and refills

50

Secret Active Antiperspirant/Deodorant Clear Gel Fresh (2.6 oz.)

Procter & Gamble

Deodorants

Women’s deodorants

Oral care

Toothpaste and treatments

LAUNCH DATE

February April

April January

*Rankings based on HRG’s proprietary star-rating system, measuring such key criteria as product innovation, promotional support, category growth, product orientation and earning potential.

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COUNTER TALK

An Omnichannel Digital Approach Why shopper marketers need to double down on mobile By Carlos Garcia

M Carlos Garcia, industry manager, Facebook

34

ajor shifts in consumer behavior, including changes to media consumption and the rise of direct-toconsumer businesses, are dramatically changing the retail industry. Today, digital media influences 51 cents of every dollar spent on grocery purchases. To couple this, it’s now easier than ever for start-ups and indie brands to rise into the consumer sphere of consciousness; 49% of the top-ranking brands in 2017 hailed from small manufacturers. We’ve all seen how such new brands as Glossier and The Honest Company have successfully won over consumers with their agile business models and innovative marketing strategies. However, traditional retailers and brands also can succeed in this evolving retail landscape. To do so, they must embrace an omnichannel, digitally focused approach, leveraging online and in-person experiences to build memorable brands and convenient service models. By investing in digital advertising and, specifically, in mobile advertising, shopper marketers at established CPGs can thrive in the midst of this major industry shift. The average consumer checks his phone more than 80 times per day, providing companies with more than 80 opportunities to influence sales. Shopper marketers must invest in mobile advertising to influence online discovery and evaluation. According to a study we conducted at Facebook, more than half of those surveyed said they would like to receive personalized offers or coupons on their mobile phones while they shop in store. By investing in mobile, brands and retailers can reach consumers directly — when they are building shopping lists and when they are checking out in store. Mobile also allows marketers to be proactive or reactive to such market dynamics as competitor offers, slower-moving SKUs or geography. The shift to mobile has created new consumer expectations for immediacy and personalization. As a result, marketers need to consider exactly how their message is delivered, and use advertising formats that adapt to changing customer needs.

More than 75% of worldwide digital video viewing takes place on mobile devices. So it’s no surprise that vertical video advertisements drive great campaign results. According to recent Facebook data, 7-of-10 tests showed that vertical video advertisements drove an incremental increase in brand lift, including a 3-to-9 point increase in ad recall. Consumers and advertisers also are embracing the stories format — 24-hour mini-narratives that feature vertical videos and photos. In a recent survey, 62% of respondents said they were more interested in a brand or product after seeing it in a story on social media. Both vertical video and stories advertisements can help shopper marketers connect with consumers along their path to purchase.

The shift to mobile has created new consumer expectations for immediacy and personalization. Businesses investing in mobile advertising also should consider how they could incorporate a messaging strategy into their marketing mix. Messaging is a great way for companies to connect with consumers throughout their buying journey — to help them seek such basic information as store hours and product details, as well as deliver more specific information, including recipe ideas and beauty tips. More than 61% of people have said messaging is the easiest, most convenient way to contact a business, and more than 58% of people surveyed feel more confident messaging a business than calling it on the phone. Shopper marketers should consider where messaging can remove friction — and maybe even add delight — for customers, giving people the confidence to move from consideration to conversion to loyalty. CPG retail has always hinged on partnership. Mobile platforms, can become new partners to help further elevate the shopper marketing experience and bolster the strong bonds brands and retailers already have with customers. dsn

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4/24/19 2:58 PM


COUNTER TALK

Homeopathic Medicine’s Growth Ensuring quality for homeopathic products — from labeling to safety By Mark Land

T Mark Land, president, American Association of Homeopathic Pharmacists, and vice president, government and regulatory affairs, Boiron USA

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he growing number of homeopathic products sold in the drug channel has captured the attention of many retailers and others. As the demand for less processed products in all categories likely is to continue and grow stronger, it is doubtful that the resurgence of this 200-year-old system of medicine known for its safety profile is merely a trend. Indeed, it may be a new beginning. Those new to homeopathic drugs may ask, “What needs to be known to stay in regulatory compliance and stay out of trouble as demand and innovation in this niche push compliance past current boundaries and attract the attention of Food and Drug Administration?” Competition always has been viewed as good for innovation, yet progress needs to be built on a solid foundation. Newcomers do not have the decades of technical experience necessary to work with homeopathic medicine’s infinitesimal active ingredients, or the detailed knowledge of the regulatory requirements of this over-the-counter drug category. In recent years, the FDA has issued warnings to retailers for private-label OTC drugs, as well as their manufacturer, so it is best if staff for both entities have a full understanding of requirements and limitations. Retailers and entrepreneurs would be wise to vet which contract manufacturers are familiar with the standards of the Homeopathic Pharmacopoeia of the United States, drug Good Manufacturing Practices and the FDA’s proposed homeopathic drug guidance that most likely will be approved soon. As for contract manufacturers, FDA has said they are responsible for whatever goes out their doors. They need to make products as if their own name was on the label because, in the eyes of the law, it is. This is regardless of the retailer or entrepreneur creating the formula and designing the label, or whether the manufacturer advised that the product and package did not comply. In fact, FDA can hold these manufacturers responsible, even if their manufacturing contract terms place liability with the labeler.

To ensure retailers that manufacturers are best serving the public and their homeopathic products comply and are up to date with the latest regulations, the American Association of Homeopathic Pharmacists is hosting a one day educational event in Baltimore this summer. The AAHP Summit is of interest to manufacturers and retailers alike. Retailer staff who review products for compliance and acceptance into their franchise will benefit from attending the AAHP’s Summit on Challenges & Solutions in Quality & Safety of Homeopathic Drug Products. Quality control and assurance staff, as well as toxicologists and pharmacovigilance staff, responsible for safety at retailers’ contract manufacturers should attend, as should those responsible for legal review and marketing claims. An AAHP inaugural industry reception on June 27 will precede the June 28 educational summit. This special evening reception will include remarks from such thought leaders as Scott Emerson of the Emerson Group on the state of homeopathic products at the retail level and networking with senior executives from the industry.

The AAHP is hosting a one day educational event in Baltimore this summer. Since 1923, AAHP has promoted excellence in the practice of homeopathic pharmacy, manufacturing, marketing and distribution by supporting the requirements, criteria and published guidelines in the HPUS and relevant federal statutes, as well as other industry regulations/compendia, all to help members provide safe, effective homeopathic medicines. To register for the three-track safety, quality and regulatory summit or the industry reception being held in conjunction with the Joint American Homeopathic Conference, visit jahc2019.org/ aahp-summit.html. dsn

April 2019 DRUGSTORENEWS.COM

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4/24/19 2:59 PM


COUNTER TALK

Getting it Right How pharmacogenomics can affect community practice By Michael Schuh

P Michael Schuh, ambulatory pharmacist, assistant professor of family and palliative medicine, and assistant professor of pharmacy, School of Health Sciences College of Medicine

harmacogenomics is coming to a pharmacy near you. Pharmacogenomics is the individual genetic testing of how we metabolize medications. Pharmacogenomics combines pharmacology with genomics, the science of mapping genomes. All that is needed is a cheek swab sent to a lab to obtain results. Results are sent back to a physician’s office or patient in the form of a report, sometimes with a medication list of how that patient metabolizes medications on the list. The testing is becoming very popular.

Foundation of Knowledge

What relevancy does this have on community pharmacy? A lot. Pharmacists already have the best foundation knowledge in pharmacology, pharmacokinetics and pharmacodynamics, so they are the natural “go to” as the most accessible healthcare professional to help interpret the testing and clinically use it. We have been telling patients for years not to drink grapefruit juice with statins. Now we know specifically why. Furanocoumarins in grapefruit juice inhibit the enzyme CYP3A4 so blood levels of certain statins may be increased, resulting in the adverse drug reactions of muscle soreness and elevated liver enzymes if grapefruit juice is taken with certain statins. Other CYP3A4-metabolized medications could be affected as well.

Getting Smarter

As software is being developed, soon pharmacogenomics information will be deployed into dispensing software to identify gene-drug interactions just as one would identify and record

allergies into a patient’s pharmacy health record. Our genetic makeup to metabolize medications generally does not change over our lifetime. Like allergies or other drug intolerances, pharmacogenomics testing can help determine which medications may be more effective or more likely to cause an adverse drug reaction.

Educating Patients

So what can we do until this software is available to flag certain medications for ineffectiveness or adverse drug reactions? We can educate ourselves about this new science to acquire at least a working knowledge. With this knowledge, we can help patients when they come into the pharmacy with their reports. We can explain the basics and possibly manually add any actionable, important genedrug interactions to their pharmacy record. This can help us to make recommendations to patients or their physicians on the best medication therapy to use before the prescription gets filled.

Added Clinical Value

Pharmacogenomics can be a market differentiator. It can set one apart from the competition as a more clinically oriented dispensing pharmacy, or it may add another service revenue stream to a pharmacy that already emphasizes services. Patients will pay out of pocket for the testing and related interpretive or clinical services. Local providers will know your store as one with better prescription screening, and use yours as the preferred for interprofessional collaboration. Patients will identify and trust your pharmacy as one with more comprehensive service, resulting in increased foot traffic and increased sales. dsn

Pharmacists already have the best foundation knowledge in pharmacology, pharmacokinetics and pharmacodynamics, so they are the natural “go to” as the most accessible healthcare professional to help interpret the testing and clinically use it. 38

April 2019 DRUGSTORENEWS.COM

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3/5/2019 10:41:31 AM 4/24/19 2:59 PM


ONE-ON-ONE

Winning by a Nose NasoNeb finds unique way to deliver sinus relief

O

fficials at NasoNeb felt that consumers were being offered inadequate nasal therapy delivery systems, so they developed a product that they believe stands above the crowd. Bill Flickinger, the company’s president, said that NasoNeb has a solid alternative in a conversation with Drug Store News. Drug Store News: Tell us about NasoNeb and its history. Bill Flickinger: We recognized a demand for a superior nasal therapy delivery system to meet the needs of physicians who told us that the devices available to them were insufficient. Metered-dose inhalers and spray bottles reach only the front of the nose; medication delivered by irrigation

Bill Flickinger, president, NasoNeb

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bottles or Neti pots run right down the sink, and the solution is very dilute; and pulmonary nebulizers deliver very little medication to the nasal and sinus cavities and failed in clinical studies. There is a large population of sinus sufferers who do not respond to these therapies in the way that they could. What was needed was a device that reached deep into the nasal and sinus cavities with a high concentration of medication. After consulting with thought-leading physicians, we designed a system specifically for therapy delivery to the nasal and sinus cavities. Initially, the NasoNeb System was prescription only. Pharmacists treated nearly 100,000 sinus sufferers with, among other drugs, corticosteroids. After nasal steroids went over the counter, we sought and obtained an OTC designation for the NasoNeb technology. Shortly thereafter, we launched the NasoNeb Sinus Therapy System. We then released the NasoNeb Moisturizing Nasal Solution, featuring multiple moisturizers in a dual salt, pH-balanced formulation intended to be less drying than saline alone.

DSN: How do you educate the consumer about the product usage and benefits? BF: We use social media, electronic ads and our website to reach consumers directly. We participate in in-store promotion, POS materials, flyers and loyalty programs with our retail partners. We are expanding our reach with other media tools, such as TV to build awareness. We educate physicians with print and electronic advertising, mailers, fax blasts, samples, and exhibits at clinical conferences. We perform in-office detailing to ensure that they can recommend the NasoNeb Sinus Therapy System to their patients.

DSN: The NasoNeb Sinus Therapy System appears to be a unique product. Tell us about how it works. BF: The NasoNeb Sinus Therapy System creates large droplets that stay in the nose. An air stream drives these droplets throughout the nasal and paranasal sinus cavities. The NasoNeb Sinus Therapy System helps people feel better and breathe better. They can deliver medication, any saline, and the NasoNeb Moisturizing Nasal Solution with the NasoNeb Sinus Therapy System for a deep moisturizing experience not found anywhere else. As an example, in one clinical study of perennial allergy sufferers, NasoNebdelivered corticosteroids improved symptoms and the ability to breathe.

DSN: How can pharmacists get involved? BF: They need to stock the NasoNeb Sinus Therapy System and NasoNeb Moisturizing Nasal Solution in their store. Plus, they need to take advantage of our webinars and printed education materials. Call us at 1 (866) 960-9833 with any questions you may have. Pharmacists should recommend the NasoNeb Sinus Therapy System along with the NasoNeb Moisturizing Nasal Solution, or other medications as needed, to their customers seeking a new complete sinus therapy. To learn more about our current and new products, come see us at NACDS Total Store Expo, Cardinal Health RBC and ECRM Cough Cold. We make announcements on our website at nasoneb.com. dsn

“We recognized a demand for a superior nasal therapy delivery system to meet the needs of physicians who told us that the devices available to them were insufficient.�

April 2019 DRUGSTORENEWS.COM

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2/21/2019 5:03:59 PM 4/24/19 3:00 PM


ONE-ON-ONE

Reddy for the Future Dr. Reddy’s Labs targets growth following realignment

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arc Kikuchi, CEO of North America generics at Dr. Reddy’s Labs, leads the company’s Princeton, N.J.-based North American business and serves as a member of its board. He talked with Drug Store News to discuss the state of the industry and Dr. Reddy’s future plans. Drug Store News: How does Dr. Reddy’s plan to grow its business in the United States? Marc Kikuchi: As an outcome of a strategic realignment exercise, we have committed ourselves to six chosen spaces that are expected to drive growth for the company over the next five years. U.S. generics is one of those six growth areas for the company going forward. In the domestic market, we aim to significantly increase our portfolio offerings with a number of launches planned for the next fiscal year. These launches span various dosage forms, and many of them are likely to be complex, limited competition opportunities.

DSN: How does Dr. Reddy’s plan on accomplishing that? MK: Our team has identified several areas that will be essential for driving our growth in the U.S. market, including specialty generics, oncology injectables, biosimilars, and store brand OTCs to name a few. The execution in each of these areas, along with focus on enhancing our customer service, and improvements to our operational efficiencies, cost controls and internal processes will help deliver on our growth aspirations. Additionally, we will continue to make strategic investments for long-term, sustainable growth while exploring selective business integration and opportunities to augment growth.

“In the domestic market, we aim to significantly increase our portfolio offerings with a number of launches planned for the next fiscal year.”

DSN: What is unique about Dr. Reddy’s approach to its growth strategy? MK: At a time when many industry leaders are moving away from generics, Dr. Reddy’s has committed itself to focusing on growth in the domestic generics segment. In order to support this segment, we are significantly investing in our infrastructure for active ingredients and finished dosages, manufacturing and research, and development to service this business effectively. As mentioned earlier, our enhanced portfolio offering with supply reliability and competitive costs will be the key components to drive this growth as we strive to collaborate with our customers.

This includes growth in the oncology space, with the introduction of several injectable products. The expansion in our portfolio offering, coupled with our robust supply chain and our strong cost position, will help us drive growth for the generics business in the domestic market. We also look forward to offering significant value for the U.S. healthcare system and patients by providing affordable generic options for many branded drugs.

DSN: What type of factors do you see as long-term growth opportunities for Dr. Reddy’s in the United States? MK: Our goal is to be among the leading generic providers and manufacturers in the United States. We strongly believe that the combination of a strong portfolio pipeline, robust supply chain and

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a competitive cost position will be essential to achieving this vision. In addition, we are looking to significantly invest in go-tomarket models required to commercialize specialty generics products in the areas of urology, multiple sclerosis, oncology, gynecology and diabetology. dsn Marc Kikuchi, CEO of North America generics, Dr. Reddy’s Labs

April 2019 DRUGSTORENEWS.COM

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ONE-ON-ONE

Building Future Growth Piping Rock continues to focus on driving sales, product innovation and investment

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im Vigliante, senior vice president of sales and marketing at Piping Rock, said that innovation and driving sales are the focus of the Bohemia, N.Y.-based company’s marketing plans. Drug Store News spoke with her about the company. Drug Store News: Tell us about Piping Rock and what’s new with the company. Kim Vigliante: Our focus at Piping Rock across all our different brands is on driving sales and bringing new, innovative products to market. We offer the latest trending products in wellness at an unbeatable value because of our ability to do in house what many competitors outsource. Because of this, we can guarantee excellent quality, a great price and, importantly, speed to market. To support our growing demand and to better serve our customers, we are building for future growth and investing in our company infrastructure, research and development, as well as customized information technology systems. Additionally, part of our growth strategy includes facility expansion plans. We are very excited to announce the opening of our new Aurora, Ohio facility this summer. This new location was carefully chosen to better leverage our operational capabilities and enhance our shipping access points throughout the country. As we strive for product and quality excellence, our new products support a “clean” platform, which includes, but is not limited to non-GMO, gluten-free, preservative-free, etc. DSN: Are new products hitting the market? KV: In terms of new products, we’ve launched quite a few this year that are right on pace with the latest supplement trends. With the growing popularity of the Keto Diet, MCT oil has become a highly demanded product by consumers. Our

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Nature’s Truth 100% Pure MCT Oil is a vegetarian, unflavored, Keto-friendly liquid. We also will be introducing additional MCT oil products in the coming months. Another segment that has generated a lot of buzz is hemp oil. We have launched both a hemp oil concentrated liquid formula and a soft gel formula. We are seeing immediate success early in the launch and expect this category to surge with rapid sales growth. We also have two new black elderberry supplements in Nature’s Truth. At Nature’s Truth, we offer Sambucus Black Elderberry in a capsule and also a super-concentrated liquid, both of which are crafted from handpicked berries only found in the nutrientrich soil of the Austrian mountains. DSN: How is the VMS category performing? What are the trends out there? KV: We are very pleased that we continue to be the top broadline growth driver in the entire U.S. vitamin category, as well as No. 1 in essential oils, according to Nielsen. The VMS category, on average, has seen moderate growth over the past year, according to Nielsen, with minimal sales growth of 2% this latest 13 weeks and 4% for the latest 52 weeks. The brands that are driving growth are the ones bringing innovation forward that is relevant and aligns with the latest consumer trends. These brands truly understand what consumers are looking for. DSN: How can retailers maximize sales in this category? KV: Retailers should lead with innovation, not duplication. I cannot tell you how many SKU rationalizations we’ve done with retailers that show shelves stocked with significant duplication from categories that are declining. For example, by filling the shelf with 40 different fish oils and 40 different vitamin Cs, retailers aren’t optimizing their assortment. They may, in fact, be confusing customers with too many options. By

Kim Vigliante, senior vice president of sales and marketing, Piping Rock

offering a wider selection of differentiated products, retailers will be better positioned to react and keep on pace with ever-changing industry trends. By partnering with us, we can help retailers identify these opportunities, drive foot traffic and maximize sales. DSN: What can you offer retailers to help educate consumers? KV: We want our retailers to succeed, which is why we work with them closely on developing plans that support their specific needs. We have had a lot of success with targeted social media outreach programs, email campaigns and specialty microsites that educate consumers and support specific initiatives. Through these different programs, we can highlight trending products at a specific retailer and even drill down to a specific location to draw consumer traffic into their store. In addition to these programs, we’ve partnered with retailers to educate their in-store health and beauty advisors on our products, so that they can better educate consumers. At store level, we also work with retailers on signage, shelf cards and displays that communicate our message in main traffic aisles. dsn

April 2019 DRUGSTORENEWS.COM

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FOCUS O N: C L I O

Carving a Successful Niche in Retail Clio’s focus on quality and price has helped it scale and expand its operation By Seth Mendelson

J

amie Leventhal is well aware that there are larger businesses in the space Clio, his company, competes in. He also is aware that with the right marketing philosophy and a lot of hard work, he can carve a successful niche in the marketplace despite those competing operations. As CEO and president of Clio, a Newton, Mass.-based personal care, sexual wellness and beauty appliance operation, Leventhal and his team have developed a business strategy that focuses on

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giving consumers less expensive, high-quality alternatives across a wide range of categories. The result: A growing presence in the mass retail world and an annual growth rate hovering around 50% annually over the last few years. Not too shabby for the 17-year-old privately owned company, now with nearly 50 employees and offices in three countries, that started as a dream by Leventhal and has turned into a growing player in five categories: grooming, nail care, skin care, cosmetic appliances and, most recently, sexual wellness and beauty care devices. “I think the key to Clio’s success is that we are a company with many hard-working employees, who operate under the philosophy that we need to be quick on our feet and nimble to create a niche in the industry that makes us unique,” Leventhal said. “We are defined by our passion and work ethic, and the fact that we work quickly to meet the needs of our retail partners, oftentimes ultimately over delivering. Over the years, we have built sustainable relationships with retailers and have become a trusted partner.” Leventhal said he quickly saw a niche for Clio in the opening price point segment of the grooming business when he started the company in 2002. While other manufacturers were offering

April 2019 DRUGSTORENEWS.COM

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products at prices that could reach $100 or more, Clio entered the marketplace with an obsessive focus on price points, mostly at $10 in the food, drug and mass arena. “We definitely hit the ground running,” he said. “Retailers were extremely receptive to what we had to offer and they were quick to get on board. In year two of business, we had already sold over a million units. That was quite an accomplishment.” A breakthrough moment came in 2005 when Clio introduced the Palmperfect Shaver. “Sales just took off. It was the first product to resonate with both the preteen girls and their moms,” Leventhal said. “We still have it as part of our product line and it still sells extremely well.” Private label also plays a key role in the company’s success. Leventhal estimated that private label makes up about 30% of his company’s sales and the category will continue to play an important role in future growth. “It goes back to being nimble and able to understand our clients’ needs, and then to get the job done for our retail partners as quickly as possible,” he said. Plus, the economies and efficiencies of scale have helped a lot. Leventhal said that with millions of units sold annually, as well as a keen focus on the personal care and beauty appliance segments, Clio is able to accommodate large and small retailers in the private-label world. “The efficiencies of scale and nearly 20 years of focus on personal care appliances allow us to bring products to market significantly faster than our peers,” he said. “That allows us to react quickly to client requests for new products. An in-house, worldclass design and development team with offices in the United States, Hong Kong and mainland China helps us develop award-winning items for our clients.”

He said that a vice president at a major retailer called him and said he wanted a store-brand version of an item that sold at a high-end prestige retailer developed in less than four months. “He wanted to know if we could do it and do it in that amount of time,” Leventhal said. “We got it done, and did an amazing job, in 120 days. It is our style and it is our reputation.” The company’s branded items also have gained trust with retailers and consumers. Thanks to a growing reputation for quality and the lower price points, branded items continue to gain space at retail.

Leventhal said he quickly saw a niche for Clio in the opening price point segment of the grooming business when he started the company in 2002. Leventhal is particularly excited about the company’s plusOne sexual wellness and accessories assortment. The currently fourSKU line, which is expected to double in size by the end of the year, features feminine self-care items at price points between $10 and $40 — well less than comparable products from competitors that sell for as much as $200. The key, he said, is offering branding, packaging and product design that will catch the consumer’s eye and make the placement of these products more acceptable at mass retail, as well as, of course, emphasizing the cost savings with premium performance to shoppers. “This is also going to assist brick-and-mortar retailers effectively compete against online retailers like Amazon by taking advantage of one thing that they have that the dot-coms don’t, which is self-checkout lanes,” he said. “For a sensitive purchase — such as sexual wellness devices — consumers can both buy the products with absolutely total anonymity and also buy them with instant gratification by using the brick-and-mortar self-checkout lines.” The Plum Beauty line of anti-aging and beauty appliances is another new focus for the company. Leventhal said the line currently features six SKUs and should grow to 8-to-10 items by the end of the year. Besides much lower price points than competitive brands, the line features innovative and trendy functions that can build truly incremental, margin accretive sales for merchants, he said. Leventhal said the future looks to be more of the same for the company. He said that Clio has no plans to expand its assortment beyond the categories it is in currently and its growing privatelabel business. “We believe that we have just scratched the service of what we can offer in these categories,” he said. “We have so many exciting and innovative ideas that can help retailers expand these categories and grow the business.” “With a bit more time, we’re looking forward to adding more retailers to our portfolio. We prefer to take our time with each merchant — working closely with them on a one-on-one basis — to develop the right programs with the right products at the right pricing to maximize their potential from these categories and our products. We’re really excited about the prospects.” dsn

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RETAILERS MAKING A DIFFERENCE

Setting the Pace

DSN highlights the retail chains leading the pack

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hey rule the roost, at least when it comes to the world of mass retail. A generation or two ago, retail was controlled by a completely different set of merchants. Sears and Kmart dominated the mass retail world, and The Great Atlantic & Pacific Tea Co. and Safeway were the big players in supermarkets. Among drug stores, there were seemingly dozens of regional players, all content to dominate a couple of different metropolitan areas. The Internet? No one could even dream what that would become. Today, retail looks completely different. Sears and Kmart merged and just barely are holding on. A&P is gone and, while Safeway is still around, it is now integrated into Albertsons’ wide and growing store base. Now Walmart, a once regional player in the south central part of the country, is the national leader, followed by Target and Costco. Two national drug store chains, Walgreens and CVS Pharmacy, dominate that marketplace — though they also seem to be direct competitors of the remaining major supermarket chains, not to mention the aforementioned Walmart, Target and Costco. In the pharmacy space, independent pharmacies, many of which are collected under banners linked to distributors, are holding onto their piece of the pie. As for the Internet, let’s just say that Amazon has done a number on the traditional retail model over the last decade, and all signs suggest it’s poised to do the same to pharmacy. To help the industry know more about the state of retail, DSN has compiled a list of the 20 most influential retailers today. dsn

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CONTENTS 50 Walgreens

72 Wakefern

52 CVS Health

74 Hy-Vee

54 Rite Aid

76 Albertsons

56 Walmart

78 Giant Eagle

58 Target

79 Wegmans

60 Costco

80 Ahold Delhaize

62 Amazon

81 Good Neighbor Pharmacy

64 Kroger 66 Publix

82 Health Mart 84 Medicine Shoppe

68 H-E-B 70 Meijer

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RETAILERS MAKING A DIFFERENCE

Walgreens Keeps Right on Growing

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omestically, Walgreens operates 9,560 drug stores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omnichannel business, Walgreens.com. Internationally, parent company Walgreens Boots Alliance operates 18,500 stores in 11 countries, including Boots in the U.K. In a strategic move to bolster market share and strength, Walgreens turned to acquisitions to fuel growth, purchasing nearly half of the stores run by Rite Aid. According to analysts, Walgreens now is in a much better position to compete against its rivals for consumers’ dollars. Wanting to be seen as more than just a pharmacy retailer, the company is focusing on value-added services to remain relevant to consumers. Roughly 400 Walgreens stores now offer healthcare clinics, either run directly by the retailer or through a third party. Looking to empower customers to choose where and when they receive their orders, Deerfield, Ill.-based Walgreens recently began offering next-day

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prescription delivery service for a nominal $4.99 fee, making it the fastest choice for receiving prescriptions next day. Walgreens Express allows patients to preview their cost, prepay for eligible prescriptions, and choose between home delivery and express pickup in store. For those who prefer to pick up their prescriptions in store, Walgreens has set aside a dedicated checkout line. The company will be expanding its same-day delivery service into more markets by the end of this year. At the end of 2018, Walgreens and Kroger announced they would be partnering in an effort to provide a better shopping experience for consumers. Since then, Walgreens has been testing the Kroger Express concept in Northern Kentucky pilot locations. A storewithin-a-store concept, Kroger Express brings 2,300 products to Walgreens shoppers in the 13 test stores. The assortment includes natural and organic products, Home Chef meal kits and national brands, along with produce, meat, dairy and frozen offerings. The one stop shopping experience gives customers access to products from both retailers and enables customers to pick up groceries ordered through Kroger.com at these Walgreens locations. Additionally, more than 60 Walgreens now sell Home Chef Express meal kits. Walgreens also is collaborating with online beauty retailer Birchbox to bring prestige beauty brands into 11 Walgreens stores, giving customers an extended assortment offering and interactive experience. Walgreens is dedicating separate space and design elements to this pop-up shop concept within its stores. Skin care, hair and makeup products from more than 40 prestige brands also will be featured. Birchboxtrained Walgreens Beauty Consultants will be available to offer advice and guide the customers through the experience. As part of the partnership, Walgreens also is including the Birchbox shop on its digital platforms. The addition of Birchbox will help Walgreens tap into the group of underserved customers who may not put their beauty needs first, and get her to increase her spend in the category. According to officials at Birchbox, this consumer group represents 70% of the market. David Larsen, senior research analyst at SVB Leerink in Boston, said that partnerships like the ones with Kroger and Birchbox give Walgreens a significant number of benefits, including expanded and customized assortments without a massive investment; something that is particularly noteworthy, considering the chain has been under intense pressure to trim unnecessary costs. dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

CVS Seeks to Transform the Healthcare Model

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VS Health is redefining what it means to be a drug store operator — and carving out its place as a healthcare company. With its $70 billion acquisition of health insurance provider Aetna, which closed last November, the retailer has established a new Health Care Benefits segment to go along with its retail and pharmacy benefit management operations. “CVS Health is in a superior position to lead the change needed in the fragmented U.S. healthcare system,” Larry Merlo, president and CEO of the Woonsocket, R.I.-based retailer, said in the company’s year-end earnings conference call. “In short, 2018 was a milestone year both tactically and strategically as we successfully completed our transformational merger with Aetna.” The company reported a 5.3% increase in revenues for the year that ended Dec. 31 to $194.6 billion. At year-end, it operated more than 9,900 retail locations and 1,100 walk in medical clinics. Perhaps nowhere is the company’s focus on remaining relevant to consumers

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more evident than in its three new HealthHub concept stores, which opened earlier this year in Houston. Merlo described the stores as being emblematic of its strategy around “creating a more consumer-centric healthcare experience.” The HealthHub stores feature a care concierge — a newly created store position designed to help direct customers to the health resources they need, including in-store dietitians and an array of resources for patients seeking to manage such chronic conditions as diabetes, hypertension and asthma. More than 20% of the new store format is dedicated to health services, the company said, including new durable medical equipment and supplies, as well as new product and service combinations for sleep apnea and diabetes care. The stores also offer full-personalized pharmacy support programs and MinuteClinic services, with a focus on recommending next best clinical actions and driving medical costs savings. “CVS has pushed heavily into a vertical integration of health care, from the prior acquisition of Caremark to the merger with Aetna,” said Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle. “This creates a different kind of company, particularly as it pertains to retail execution.” In addition, he said the new test formats “push the boundaries further into health services as they move closer to an integrated healthcare company.” In addition to the HealthHub stores, CVS Pharmacy has been testing a store-within-a-store beauty department called BeautyIRL. The expanded beauty offering debuted last year in four stores in Florida, Connecticut and Massachusetts. CVS Pharmacy also has embraced home delivery and is a leader in marketing and promotions, said Burt Flickinger, managing partner at New York-based Strategic Resource Group. “CVS has arguably the best database of any major retailer anywhere in North America,” he said. “It has the most powerful promotional programs anywhere in the world for chain drug.” Flickinger also said CVS Health’s deep executive and store-level talent gives it a competitive advantage over its rivals. CVS Pharmacy’s front-store merchandising is fueled by its ExtraCare loyalty program, which it rewards its best customers by providing them with automatic sale prices, customized coupons, ExtraBucks rewards and other benefits. It also carries about 7,000 products under the CVS Health and other proprietary brands, which accounted for about 23% of front-store revenues in 2018. dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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4/24/19 3:02 PM


RETAILERS MAKING A DIFFERENCE

Rite Aid Takes on a New Look

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ransition is probably the single best word to describe Rite Aid today. Last year, the chain sold 1,932 stores — nearly half of its base — to rival Walgreens. In March, Rite Aid officials announced a restructuring plan to take place immediately, a move that will result in a 20% reduction in full-time corporate positions and $55 million in savings. The plan includes replacing three of its top executives, including John Standley, CEO.

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This announcement comes just months after Rite Aid shareholders failed to support a deal to merge the drug chain with Albertsons. Despite all this, Rite Aid has been doing what it can to reimagine and shape itself into a survivor. As retail pharmacy competition has heated up, Rite Aid management shifted its focus to more profitable business segments, namely drug store prescriptions and e-commerce, as well as its pharmacy benefit manager EnvisionRxOptions, which gained a new CEO in February. Additionally, Rite Aid and McKesson have renewed their agreement for drug purchasing and that, combined with increasing prescription sales, are expected to help the company in the long-term. Rite Aid’s e-commerce initiatives include developing faster ship-from-store and prescription fulfillment services together with incorporating more drive-through pharmacies and mobile apps. These efforts, experts said, will help Rite Aid appeal to a wider audience from younger consumers to seniors, many of whom prefer to get their scripts from trusted retailers. Its 20-year-old partnership with GNC, which recently was extended through 2021, has played an instrumental role in helping to solidify Rite Aid’s reputation as a health-and-wellness destination. Approximately 2,200 GNC store-within-a-store locations are operating in Rite Aid stores nationwide, including a majority of Rite Aid’s wellness stores. Wanting to appeal to a wider range of consumers, the Camp Hill, Pa.-based drug chain announced plans to bring more than 200 prestige cruelty-free beauty items from value-priced indie-brand Kokie Cosmetics to its stores and at RiteAid.com. The move is expected to help Rite Aid attract the attention of millennial consumers. While some hail the move to shed stores and trim costs as admirable, others are left wondering whether alone it can sustain Rite Aid in the long-term. Jim Crumly, a financial blogger for The Motley Fool, said in a recent column “the increasingly crowded pharmacy space and strength of its rivals, coupled with Rite Aid’s financial state may be sufficient enough to initiate a downward spiral.” In Crumly’s view, Rite Aid can turn things around by leveraging its strengths, namely increasing the number of prescriptions it fills by expanding access to more preferred Medicare Part D networks and growing its in-store clinical capabilities. Fourth-quarter results showed Rite Aid increasing script count for the third consecutive quarter. dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Walmart Pushes the Digital Envelope

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aving a four-spoke business strategy focused on price, assortment, access and experience has played a pivotal role in Walmart’s success. For the fiscal year ended Jan. 31, total revenue for the Bentonville, Ark.-based company was $514 billion. Its three operating segments include Walmart U.S., which operates retail stores in all 50 states; Walmart International, which comprises a variety of formats including digital retail; and Sam’s Club, its membership-based warehouse club format that operates in 48 states.

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Combined, the retailer has more than 11,000 retail units under 58 banners in 27 countries and e-commerce websites in 10 countries. It employs more than two million people worldwide — including 1.5 million in the United States alone. The company plans to invest $2.7 billion during the next two years in higher wages, training and education for its associates and store management teams. Under the leadership of Doug McMillon, Walmart steadily has broadened its consumer reach and sought out new online opportunities to drive growth. The plan already has begun to pay off. Walmart grew its U.S. e-commerce sales 43% in the fourth quarter of 2018. Some of its latest online acquisitions include Art.com, ModCloth, Moosejaw, Bonobos, Eloquii and Bare Necessities. Retail analysts — among them Walter Loeb, president of Loeb Associates based in New York City — have said Walmart appears to be focusing its efforts on identifying specialty e-retailers, offering unique products and that are leaders in their respective categories. “This focus on expanding its presence online gives Walmart access to younger shoppers, many of whom may not shop their physical stores,” Loeb said. In addition to buying existing online retailers, Walmart has started building its own brand online business. In 2018, it launched Allswell, featuring bedding and mattresses, which are sold under a separate website, AllswellHome.com. Walmart continues to grow its innovative service offerings with an eye toward convenience. It is expanding the number of stores offering grocery pickup and introduced a grocery delivery service in 35-plus cities via a partnership with third-party delivery companies. After exceeding expectations, its Pickup Tower concept will be added into more stores, with the addition of lockers to accommodate larger items. Understanding that consumers who want low prices also can be attracted to innovative and exclusive product offerings, Walmart is skilled at balancing the perception of an everyday low-price format with offering fresh, on-trend products. They also know price-sensitive shoppers are not one-dimensional, and just as easily can care about cost as their impact on the planet. With that in mind, Walmart recently introduced a sustainability initiative to reduce the amount of plastic used within its store brand program that is expected to impact more than 30,000 items. The retailer also has partnered with celebrity couple Kristen Bell and Dax Shepard to launch Hello Bello, an affordably priced, premium plant-based line of products for babies. dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Target Focuses on Efficiencies and Acquisitions

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arget officials fully expected 2018 to be a transition year for the company as it worked to improve efficiencies across its supply chain, including investing in technology to support back-office operations, revisiting pricing and repositioning its store brand offerings. Instead, it turned out to be one of the most productive years in Target’s history. Not only was foot traffic in its stores up, online sales for the Minneapolisbased company were among the strongest they had ever been. Looking to become America’s easiest place to shop, it’s clear that many of Target’s initiatives are helping the chain achieve that goal within its 1800-plus stores and online. With the addition of Vermont in 2018, Target now operates in all 50 states. Its recently acquired Shipt shopper delivery service has been met with rave reviews as it allows consumers to have groceries delivered to their homes or picked up at the store without the need to get out of their car. Target’s move to remodel more than 1,000 stores also is receiving positive feedback from

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customers who appreciate how much easier it is to navigate the aisles. The steady stream of new brand launches has been an effective tool to keep interest and excitement high as well. From a supply chain perspective, the company will be continuing its focus on improving cost efficiencies and filling orders faster and more reliably. At Target’s annual financial meeting, chairman and CEO Brian Cornell said the company plans to continue investing in new own-brand launches, including its new premium wine label, The Collection, an assortment of California wines selling for less than $10 a bottle. According to Cornell, Target will be introducing another wine brand this spring as a result of its collaboration with Vineyard Vines. These new additions will join the chains’ existing own-brand wine options, Wine Cube and California Roots. The company also introduced three intimate and sleepwear brands in recent months. In February, Target brought women’s body care brand Flamingo — from the creators of the Harry’s line of men’s grooming products — to its shelves, touting its focus on digitally native brands. For all these reasons, analysts are bullish about Target’s future. They said the chain’s commitment to raise its starting wage to $15 by the end of 2020 is yet another move in the right direction. Amanda Lai, senior consulting associate at McMillanDoolittle in Chicago, said Target has been working hard to stay relevant in the minds of consumers, including investing in the look of its stores and store brands. Creating such destination categories as fashion, beauty, home, toys, and children and baby, she said, also has made a difference. “These key categories highly resonate with the needs and lifestyles of its customers, differentiate the retailer from Walmart and others, and have given guests a reason to continually shop at Target,” Lai said. Target’s willingness to spend money on technology, grow the number of fulfillment options it offers customers, and move into untapped markets by building small format stores in urban neighborhoods and college campuses also are solid investments, Lai said. Understanding what its shoppers want next and delivering on that positions Target for long-term success. “Target has blended the best of physical and digital shopping by investing in services across its physical, digital, mobile and omnichannel platforms,” Lai said. “Formerly online only brands, such as Casper, Harry’s, Quip and BarkBox are now available at Target stores and are easily recognized by the retailer’s digitally connected consumers.” dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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Costco Eases into E-commerce, Maintains Dominant Physical Stores

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ssaquah, Wash.-based Costco Wholesale has been moving into e-commerce at a deliberate pace as it expands its capabilities for online ordering and delivery throughout the country. The membership club operator appears to have found a balance between its compelling in-store offerings and the convenience of delivery, which it offers in partnership with Instacart and other third-party delivery firms. The “treasure hunt” merchandising strategy and discounts on bulk groceries, health and beauty, and OTC products keep customers coming in the doors for stock-up trips. It also offers a robust in-store pharmacy program, which includes free screenings for osteoporosis, heart health and diabetes. Home delivery of prescriptions also is available. Costco, which operated 762 membership-warehouse stores worldwide at the end of its last fiscal year in September, is the largest of the wholesale clubs, and continues to expand at a steady pace. The company opened 21

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new clubs in fiscal 2018, including 13 in the United States, and it plans about 23 new locations in 2019, with about three-quarters of those in the United States. Costco is planning to open its first location in China later this year. Sales for fiscal year 2018 were up 9.7% to 138.4 billion, compared with fiscal 2017. E-commerce sales at the company, which account for a little more than 4% of total sales, were up 32.2% for the year. The company said it is generating sales for two-day delivery of grocery e-commerce orders in all 50 states, including the six states where it does not operate wholesale clubs. “We continue to improve the online merchandise and sales offerings and services offerings with ‘Hot Buys’ and ‘Buyer Picks,’ and buy online and pickup in store,” CFO Richard Galant said in a conference call discussing year-end results. Costco’s in-store pickup service includes a limited test of lockers that allow customers to retrieve their orders themselves. Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle, said Costco’s formula for success has stood the test of time. “Costco remains an anomaly,” he said. “While they have Costco.com, they are a relatively small player in e-commerce. And while they have not done much to innovate from a physical standpoint, yet, they remain one of the most solid performers from a physical retail point of view. Great merchandise selection and solid execution are a winning and enduring formula.” Burt Flickinger, managing director at New Yorkbased consulting firm Strategic Resource Group, said Costco has generated a strong following for the value of its vitamin and supplement offerings, as well as its fresh grocery assortments. “Costco is becoming the world leader in vitamins and healthcare sales per store,” he said. The retailer’s vitamin and supplement private label, Kirkland Signature, has a reputation for high quality and low prices, Flickinger said. “They are attracting more consumers looking for healthcare items, in addition to being leaders in fresh, natural and organic,” he said. “It’s a combination of a one-stop shop in store, but also Costco.com and Costco delivery are really accelerating. So, you’re taking the highest volume stores, per store, per week, anywhere in the world, and then adding the additional online component and the strong focus on pharmacy, health, beauty and natural and organics — it’s an incredibly powerful food and drug combination.” dsn —Mark Hamstra

Image courtesy of Costco Wholesale

RETAILERS MAKING A DIFFERENCE

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Amazon Makes a Play in Traditional Retail

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rom both an employee and square footage standpoint, Amazon keeps getting bigger each year. The company employs more than 640,000 people and its global real estate footprint — which includes offices, warehouses, retail stores and data centers — has grown to 288 million sq. ft. While the Whole Foods Market acquisition bumped up those numbers, retail space accounts for less than 10% of that square footage. Much of the square footage growth instead stems from the additional fulfillment centers the company has built. Amazon is focused on getting products in the hands of consumers as fast as possible, but the push to do so comes at a cost. In 2018, Seattle-based Amazon spent $27.7 billion on shipping, which is $6 billion more than the previous year. In its annual 10-K filing, Amazon listed transportation and logistics under services it provides, leading many to wonder if Amazon may be launching its own service in an attempt to get its shipping costs in check. Like Walmart it seems Amazon also has lofty goals when it looks at ways to grow its business. Amazon has been testing the waters in the past year with

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expansion in both its online and physical store presence, as well as aligning itself with a varied number of partners from General Motors to Coachella. Its recent purchase of PillPack, one of several healthcare initiatives the company is working on, gives Amazon entrance into the pharmacy business. Experts said this could possibly be leveraged at its Whole Foods Market locations, which could benefit from the addition of having an in-store pharmacy. Should Amazon look to integrate PillPack into its Prime offering, those who will be impacted the most, some surmise, will be the prescription delivery companies. In March, Amazon announced its intentions to expand its foothold in grocery beyond the doors of Whole Foods Market and Amazon Go. By year’s end, the company reportedly will be launching dozens of grocery stores in large cities across the United States. Locations being considered include Los Angeles, Seattle, San Francisco, Philadelphia, Chicago and Washington, D.C. While it has not been announced which of Amazon’s banners the new stores will go under, Amazon is expected to create a price-based format intended to appeal to middle- and lower-income shoppers. Currently, Amazon operates roughly 500 Whole Foods Markets and 10 cashier-less Amazon Go stores, and offers groceries through its Amazon Fresh delivery service. In her report, “Death by Amazon: A Look at the Victims and Survivors,” Camilla Yanushevsky, an equity research analyst at CFRA Research in Rockville, Md., said that the sectors Amazon’s expansion efforts have significantly threatened include sporting goods, home furnishings, computer/electronics and office supplies. According to Yanushevsky, the cosmetics industry is among the few that has maintained strength against Amazon, but that may not be for long. Amazon recently launched its own skin care brand, Belei, a line of cleansing wipes, moisturizers, masks and serums for under $40. Belei’s product lineup addresses a range of such skin care issues as acne, fine lines, dark spots, dehydration and dullness. On Amazon’s expanding foothold in grocery, Yanushevsky said if Amazon launches its own lowpriced grocery chain, the retailers most affected would likely be such priced-based formats as the dollar stores. “Given that consumables account for three-quarters of Dollar General’s revenues and nearly half of Dollar Tree’s, these retailers have the most to lose should the reports about Amazon’s new grocery effort ring true,” Yanushevsky said. dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Kroger Relentlessly Grows its Food and Drug Empire

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incinnati-based Kroger, the leading operator of traditional grocery stores in the country, shows no signs of loosening its grip on that title. The company continues to explore new lines of business — from e-commerce to health care — and is in the midst of a significant strategic overhaul called Restock Kroger, a multipronged effort designed to ensure that it stays relevant for years to come. The effort includes four main drivers: redefine the food and grocery customer experience, expand partnerships to create customer value, develop talent, and live Kroger’s purpose. Kroger reported total sales of $121.2 billion for fiscal 2018, its first full year of Restock Kroger initiatives. In a recent interview with Bloomberg, Kroger CEO Rodney McMullen said

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the retailer has been in talks with multiple players in the healthcare industry, eyeing possible partnerships that could create a new line of business for the company. “Health care is an area where we see a lot of opportunity,” he said. Kroger also is ramping up its partnership with Walgreens, introducing a selection of its own grocery products inside 13 Walgreens locations. It also is offering meal kits from Home Chef meal kits, which the company acquired last year, in dozens of Walgreens locations in Chicago. “Other than Walmart and Amazon, no one has been more aggressive than Kroger in trying to reshape their business,” said Neil Stern, senior partner at consulting firm McMillanDoolittle. The company’s Restock Kroger investments are reflected in its expansion of omnichannel retailing, through which 91% of Kroger households have access to pickup or delivery, with 100% penetration expected by year’s end. Digital sales achieved a run rate of about $5 billion in 2018 and are expected to hit $9 billion this year. Kroger launched a pilot program in partnership with technology firm Nuro last year to test self-driving delivery vehicles in Scottsdale, Ariz., and recently said it would expand the test to Houston. Integral to Kroger’s relevance with consumers is the company’s balance of price and quality, perhaps nowhere better reflected than in its private-label offerings. The company said it introduced 1,022 new private-label items in 2018 and achieved private-label unit penetration of 30.5%. Its Simple Truth natural and organic label had sales growth of 15.3% in 2018 for total sales of $2.3 billion. Kroger also is rapidly expanding the Home Chef line and is rolling out the meal kits to 500 more stores for a total of more than 700, the company said in February. In addition to its delivery and e-commerce investments and partnerships, Kroger also continues to invest in such digital capabilities as self-scanning, and the company remains a leader in loyalty marketing, Stern said. “There’s been a lot of activity in a very short period of time to remain relevant on all fronts,” he said. Burt Flickinger, managing director at New Yorkbased Strategic Resource Group, said Kroger is a leader across many fronts of food and drug retailing, including with its Kroger Marketplace supercenter stores, “where a family can get all of their needs for an entire week. And in terms of promotional pulses for consumers, as well as staying competitively priced, Kroger continues to excel,” he said. dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Publix Expands ‘Fearlessly’ up the Eastern Seaboard

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ublix Super Markets has remained one of the most successful growth stories in the mass retail industry, as the company’s focus on high levels of service and well-executed retail operations had led it to become the dominant food and drug merchant in the southeast. The Lakeland, Fla.-based operator continued to expand up the eastern seaboard in 2018, with 24 new stores in Florida, 11 in North Carolina, six in Alabama, four in Virginia, three in Tennessee, two in Georgia and one in South Carolina. Publix operated 1,211 supermarkets at the end of 2018 and reported $36.1 billion in sales for the year, up 4.4% over 2017 results. Comparable-store sales rose 2.1% for the full year. “They continue to have a stellar balance sheet, steady expansion, great in-store service, and an aggressive emphasis on private-label products,” said Chuck Cerankosky, an analyst at Cleveland-based Northcoast Research.

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“Their expansion has been steady, but you might call it fearless because they go into markets with strong competitors and steadily work their way in.” As the company has expanded in the mid-Atlantic, it increasingly has competed against such regional powerhouse retailers as Wegmans and Harris Teeter, for example, along with a host of other traditional supermarket operators and discounters. The company recently announced that it would expand its newly re launched specialty and organic format, called Greenwise, with new locations planned for Florida and South Carolina. “We’re creating a community gathering place where high quality natural and organic products are the center of what we offer,” Publix president Kevin Murphy said in a statement about the Greenwise expansion plans. “And we’re helping our customers support their healthy lifestyle with convenient in house prepared meals and grab-and-go options made from organic and antibiotic-free ingredients.” Publix often cites its 202,000 employees, many of whom are part of its Employee Stock Ownership Plan, as the driving force behind its success. The company recently earned top honors as the No. 1 supermarket for customer service on Newsweek’s “America’s Best Customer Service 2019” list; and for the past 22 years, the company has ranked as one of Fortune magazine’s 100 best places to work in America. This year, Publix also came in atop Fortune’s “Best Big Companies to Work For” list for companies with more than 100,000 employees. “Publix continues to perform at a high level from a retail standpoint, driven by great execution and customer service,” said Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle. Publix also has a strong reputation for the food service in its delis, as well as for its promotion of home cooking through such programs as its Aprons cooking classes and demonstrations. It recently launched an online version of its Aprons cooking classes that began airing on its YouTube channel in January. The company also has stepped up its efforts around pharmacy and health care, including through its recent partnership with Flagler Health+ to place three of that company’s telehealth diagnostic sites at three Publix locations in the St. Johns County, Fla., community and one at an on-site Publix Pharmacy at Flagler Hospital. “Todd Jones, to his credit, as CEO has turned pharmacy into a real consumer advantage for Publix,” said Burt Flickinger, managing director at New York-based Strategic Resource Group. dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

H-E-B Builds Local Connections with its Customers

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an Antonio-based H-E-B remains one of the nation’s foremost regional powerhouse retailers, beloved by its dedicated customer base across the broad state of Texas. The company, which operates 400 stores in the Lone Star State and Mexico, is well-known for its local connections with consumers and its knack for tailoring stores to the individual neighborhoods it serves. Its website lists annual sales of $26 billion. “H-E-B is always just incredibly impressive because they are able to play offense and defense at the same time,” said Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle. “[Many companies] are trying to defend against the expansion of Aldi and all the other things they are

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having to deal with. But H-E-B, meanwhile, is able to successfully fend off all the competitors on its home turf, and at the same time be incredibly innovative, and that’s really a tough trick.” One of the ways H-E-B has innovated historically has been through its varied formats that are tailored to serve the various demographic groups it serves, Stern said. “They have Joe V’s [Smart Shop] for price, they have Mi Tienda for [Hispanic shoppers], they have Central Market for upscale, and they have H-E-B Plus to go into nonfoods,” he said. “They have been very good at innovating to solve consumers’ needs through format.” The chain also has been experimenting with services for those customers who prefer to shop online, with the rollout of its delivery and curbside pickup services. “They are going after the omnichannel piece, while at the same time being very good at the basics — good at the core business,” Stern said. “They are absolutely a company that’s able to hit on all cylinders.” H-E-B also seeks to be a partner for local producers. The chain recently launched its “2019 Quest for Texas Best,” marking the fifth year in a row that H-E-B has reached out to find the best local products made in its home state. H-E-B’s tie-ins with such local sports teams as the San Antonio Spurs NBA basketball team generate considerable buzz through a series of humorous, local commercials and community events. The company also has been expanding its in-store foodservice offering, with such concepts as a new taqueria — True Texas Tacos — that opened last year in a San Antonia store. H-E-B offers an extensive pharmacy program, which includes specialty pharmacy for patients with complicated treatment needs, drug compounding services, and its H-E-B RxTRA Advantage program, offering pharmacy benefit management for local employers. “H-E-B is the acknowledged leader in pharmacy in the Sun Belt, and consumers see pharmacy both in generics and branded as a real value,” said Burt Flickinger, managing director at New York-based Strategic Resource Group. He cited efforts on the part of the company to ensure that its pharmacy offerings are competitively priced. “They make sure that people on fixed and limited incomes can afford the key drugs,” Flickinger said. “So, H-E-B can go head to head with Walmart or Costco, or any kind of competitor, and win in pharma, which is the real credit to [chairman and CEO] Charles Butt’s brilliant leadership and strategic genius.” dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Meijer Operates Supercenters at a High Level

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eijer, a pioneer of the supercenter concept, continues to push forward with expansion of its core one-stop-shopping format while also experimenting with other retail designs. Last August, the privately owned chain opened a store called Bridge Street Market in its headquarters market of Grand Rapids, Mich., one of several local urban grocery stores the company is planning. The 37,000-sq.-ft. store offers a complete selection of groceries, but no pharmacy or many of the electronics, apparel and other general merchandise found in its 150,000-sq.-ft. supercenters. “This is new territory for us, but we believe this is not only a smart business move and addresses the need for new ways to serve our changing customers,

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but it also positively impacts our community,” Meijer president and CEO Rick Keyes said in a statement. One of the keys to Meijer’s success has been its skill at operating large-format stores successfully, said Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle. “Meijer is good at food, they are good at nonfood, they are good at pharmacy, and they are good at the health side of the business, as well as being a really good supermarket,” he said. “Making these large stores relevant has been one of their big successes.” The 241-store chain also has “one of the best loyalty programs in the market,” Stern said, and it continues to be a technology leader with such rollouts as its recent expansion of the Shop & Scan mobile self-checkout application to stores in the Chicagoland market. Meijer also was one of the early partners of Shipt, the third-party grocery delivery specialist. As of late last year, the company expanded its click-and-collect service, also handled by Shipt, throughout its Midwest operating area. Both services are available in 227 Meijer supercenter locations in six states. Meijer touts its status as a destination for family health and offers a suite of pharmacy services, including pharmacy rewards through its mPerks loyalty program. The company seeks to make it easy for its customers to keep track of their health with tools that include higi health stations — available in every Meijer pharmacy — that measure blood pressure, heart rate, body mass index and more. Customers can create a higi account to track their health over time and keep a digital record of their progress. Meijer also has partnerships with healthcare providers and hospital systems in many of its markets designed to increase services through in store and campus medical clinics. Its focus on its communities’ health needs also is reflected in its recent launch of a Consumer Drug Take-Back Program, which helps customers dispose of unwanted drugs, in part to keep them out of the wrong hands. It is installing secure in-store kiosks designed to help customers safely and properly dispose of unused or expired prescription drugs at no cost. Meanwhile, the company also is expanding into new locations with its traditional supercenter format, with three new stores planned for openings during the first half of this year in the greater Cleveland market, including one located in one of the nation’s oldest Kmart Supercenters, which has been closed for some time, said Chuck Cerankosky, an analyst at Clevelandbased Northcoast Research. dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Wakefern Food Seizes its Co-Opportunity

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hat began as a small, local cooperative with only eight grocery store owners, Wakefern Food has developed into the largest retailer-owned cooperative in the United States. Founded in 1946, the Keasby, N.J.-based co-op includes 50 members who independently own and operate more than 350 supermarkets under the ShopRite, The Fresh Grocer, Price Rite Marketplace and Dearborn Market banners in New Jersey, New York, Connecticut, Pennsylvania, Maryland, Delaware, Massachusetts, New Hampshire, Rhode Island and Virginia. Together with its member companies, Wakefern employs more than 70,000 people and is one of the largest employers in New Jersey. Wakefern operates more than 2.5 million sq. ft. of grocery and nonfood warehousing. Its transportation fleet, one of the largest private fleets on the East Coast with 400 tractors and 2,000 trailers, travels more than 35 million miles annually. One of the things separating Wakefern from others is upper management’s unwavering commitment to helping small businesses succeed in a big-business world. While each banner has carved out a successful niche, it is ShopRite that most associate with the Wakefern name. Operating in the uber-competitive northeast and mid-Atlantic markets requires the ability to change with the times, something ShopRite store owners are well aware of, which is why their

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focus has been on providing an exceptional shopping experience, both in store and online. Additionally, its carefully curated private-label offerings, featuring on-trend products and innovative packaging, have served as a benchmark program other retailers have emulated. Its ShopRite Trading Company private-label line, featuring gourmet and specialty foods from around the world, widely has been recognized. Many of the 276 ShopRite stores are family owned and operated, and their ties to the communities they operate in run deep. Management has often said commitment to its customers helps drive all of its decision-making. To meet those needs, ShopRite isn’t afraid to think big. Its newest stores range in size from 60,000-to90,000 sq. ft. and are tailored to meet the needs of the communities it serves. Newer stores often feature a full array of specialty departments, including a fresh bake shop, expanded selection of natural and organic foods, full-service pharmacies, delis and meat departments, international cheeses, and a wide array of general merchandise and HBC items. ShopRite also has developed an extensive prepared food program, which some have said is a necessity if ShopRite wants to maintain share in Wegman’s-dominated markets. ShopRite also is known for its value-add programs, including ShopRite from Home online shopping service; Scrunchy’s Playhouse, an in-store childcare service; in-store banking facilities; and drop-off dry cleaners. ShopRite was among the top three supermarkets recently named to Newsweek’s 2019 “America’s Best Customer Service” list, and rightly so. Its intensive and comprehensive customer service approach includes training associates at the highest levels to help customers in store, online and through ShopRite’s Customer Care Center. That service may involve helping a customer at one of ShopRite’s many pharmacies, having a menu plan developed with one of ShopRite’s registered dietitians, or making sure a customer’s online grocery order is hand-selected in store by a personal shopper. “Wakefern’s unique structure enables its stores to maintain close links to communities,” said David Orgel, principal at David Orgel Consulting based in Westfield, N.J. “This is particularly important as consumer behaviors quickly change and new competitors enter markets. ShopRite is known for its awardwinning customer service and a deep understanding of local markets. The company is moving ahead with progressive strategies across all platforms, from in store to online, a move that will keep it relevant in the intensely competitive market in which it operates.” dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Hy-Vee Moves in Brand-New Format Directions

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ith deep roots going back to the 1930s, West Des Moines, Iowa-based Hy-Vee is an employee-owned company operating more than 245 retail stores across eight Midwestern states with sales of $10 billion annually. The supermarket chain is known for its quality, variety, convenience, healthy lifestyles, culinary expertise and customer service. It also was named Drug Store News’ 2018 Retailer of the Year. Hy-Vee often is lauded for its customer service and management style. The importance of providing “A Helpful Smile in Every Aisle” is ingrained in the company’s 80,000-plus employees on day one. Hy-Vee store managers are given significant control over store operations, including pricing, promotions, merchandising and policies.

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Known for its large-scale format, the company has been shaking things up in the Midwest with its new convenience-focused, smaller-store format, Fast & Fresh. The 10,000-sq.-ft. stores feature on-the-go meals, sushi, wood-oven pizza, Starbucks coffee, a growler craft beer station and Hy-Vee Aisles Online pickup for convenience on the go. The company also launched its first Hy-Vee HealthMarket, a freestanding concept store with a focus on sports nutrition and supplements, fresh produce, meat and dairy items, meal kits, frozen foods, and a healthy beverage station. The store also features a pharmacy and hearing center, and an Aisles Online pickup location. The nearly 17,000-sq.-ft. store also has high-end cosmetics and offerings from Basin natural beauty and body care. Adjacent to the store is an Orangetheory Fitness studio. The West Des Moines location is said to be one of 60 the company plans to launch in the coming years. At the same time, Hy-Vee has turned its attention to expanding its pharmacy operations, acquiring several pharmacy retailers, including all Weber & Judd locations in Minnesota, which were rebranded as Hy-Vee HealthMarket Rx locations. The locations offer traditional pharmacy services, free prescription delivery, automated refill ordering, immunization services, free blood pressure checks, private medication consultations and a registered dietitian for nutritional consultations. In February, Hy-Vee acquired several Shopko pharmacies in the Midwest. These six pharmacies are in addition to the 22 Shopko pharmacies that Hy-Vee acquired in December 2018. “Hy-Vee is a standout retailer in providing health-and-wellness solutions,” said David Orgel, a principal with David Orgel Consulting based in Westfield, N.J. “Increasingly, consumers are demanding health solutions, and Hy-Vee is on the leading edge,” Orgel said. “The company is a master at leveraging dietitians, pharmacists and in-store health clinics to raise its profile as a wellness provider. To complement this, Hy-Vee merchandises a wide range of natural, organic and allergen-friendly products in its store. The retailer has made impressive strides with its total-store health strategy and even extends efforts beyond stores into communities.” Hy-Vee has been developing a partnership with restaurant franchise Wahlburgers and plans to build, own and operate 26 Wahlburgers restaurants. In addition, Hy-Vee sells Wahlburgers-branded menu items at its full-service Hy-Vee Market Grille restaurants in the Minneapolis and Des Moines, Iowa markets. dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Albertsons Builds Connections Between Food and Pharmacy

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oise, Idaho-based Albertsons has a long history of both grocery retailing and pharmacy operations, and the company is continuing to invest in the connections between food and health. The company, which was named DSN’s 2018 Pharmacy Innovator of the Year, remains a destination for consumers seeking a range of health-and-wellness solutions as it expands its e-commerce, private brands and prepared foods capabilities to stay relevant with today’s consumers. Albertsons posted sales of $46.5 billion through the first three quarters of 2018, including an identical-store sales increase of 1.9% in the third quarter. Pharmacy sales accounted for about 8.3% of the year-to-date total,

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the company said in filings with the Securities and Exchange Commission. Although Albertsons’ planned acquisition of Rite Aid fell through in 2018, the company continues to invest in state-of-the-art healthcare initiatives. For example, last year the company partnered with Akos Medical Clinic to open two high-tech medical clinics in Safeway stores. The clinics include artificial intelligence- and augmented reality-powered selfguided medical stations. The stations collect such data as weight, temperature, blood pressure and blood oxygen count, as well as images and sounds that can be sent to a healthcare provider for video consultation. Albertsons said it planned to expand the clinics to dozens more Safeway locations throughout the first half of 2019. “What [chairman emeritus] Bob Miller and [chairman] Jim Donald and the division presidents are doing — combining the pharmacy, which is the biggest salient strength of Albertsons, with food — is really helping drive comparable same-store sales,” said Burt Flickinger, managing director at New York-based consulting firm Strategic Resource Group. Albertsons also has been ramping up its e-commerce efforts, using its own delivery vehicles and personnel, as well as third-party delivery firms. Its home delivery service was available in 11 of the top 15 U.S. markets as of late last year. The company continues to expand its click-and-collect service, dubbed Drive Up & Go, and its meal-kit delivery service, Plated, which it also has begun making available for in-store purchases. Albertsons also maintains a comprehensive loyalty program with its “just for U” offering that it has expanded throughout the organization in the wake of the Safeway merger. The company launched more than 1,100 new privatelabel items in 2018, and four of its own brands now tally more than $1 billion a year in annual sales. In the third quarter, private-label brand penetration reached 25.2% of sales. Neil Stern, senior partner at McMillan Doolittle in Chicago, said Albertsons has been busy trying a lot of different approaches to stay relevant with consumers. “It is just a question of how do they define themselves to the world? There are a lot of things they are doing, and there are a lot of moving pieces.” As of Dec. 1, Albertsons operated 2,277 retail food and drug stores under 20 different banners across 35 states, with 1,743 pharmacies, 395 fuel centers, 23 dedicated distribution centers, five Plated fulfillment centers, and 20 manufacturing facilities. dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Giant Eagle Offers Value in Food, Fuel and Pharmacy

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ittsburgh-based Giant Eagle is a regional stalwart that is expanding both its supermarket operations and its footprint as a convenience store operator. The privately owned retailer, which lists annual sales of $8.9 billion on its website, operates 216 supermarkets and about 200 GetGo fuel locations. As 2018 ended, the retailer completed the acquisition of Ricker Oil, which added 56 Ricker’s c-stores in the Indianapolis and Fort Wayne, Ind., markets to the company’s roster, further expanding Giant Eagle’s operating area in Indiana. The company’s connection with its c-store and fuel operations has been an increasingly important element of its operations as it leverages the fuel centers as part of its fuelperks! rewards. The program, which is connected to Giant Eagle’s Advantage Card loyalty system, now also includes its former RxRewards program, which allows customers to earn food or fuel discounts

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based on both the number of prescriptions filled at Giant Eagle and the money spent on prescription co-pays and cash prescriptions. “Their fuel rewards program remains very popular, which is not a surprise, because gasoline is something everybody wants to save money on,” said Chuck Cerankosky, an analyst with Northcoast Research based in Cleveland. He also highlighted the company’s extensive and growing private-label program, which includes more than 10,000 products under the Giant Eagle, Nature’s Basket and Market District brands, all supported with a double-your-money-back guarantee. The Market District brand — its premium and specialty privatelabel line— shares its name with Giant Eagle’s high-end format that has helped it remain relevant in markets where customers are seeking that level of experience. Burt Flickinger, managing director at New Yorkbased Strategic Resource Group, said that Giant Eagle has maintained a competitive pharmacy offering, while competing against Rite Aid on the drug store retailer’s home turf in western Pennsylvania. “Giant Eagle, the Shapira family [owners] and [president and CEO] Laura Karet have always looked at the perfect combination of pharmacy, food and fuel as something to really give value to consumers in their greater Pennsylvania, Ohio and contiguous markets,” he said. “They’re one of the leaders in pharmacy.” The retailer’s pharmacy program is comprehensive and includes a well-developed specialty pharmacy operation for patients with complex therapy needs, along with an extensive prescription delivery program and a dedicated pharmacy mobile app. Giant Eagle also takes steps to remain a leader in e-commerce to satisfy the needs of its customers who prefer to either have groceries delivered or to order online and pick up at the store. Last year, the retailer debuted a scan-as-you-shop mobile app at its Market District format. The Giant Eagle Mobile Shopper app is linked to customers’ Advantage Card, allowing customers to apply discounts while they shop and earn fuelperks! rewards. Giant Eagle also is one of the leaders in grocery delivery in the markets where the service is offered, and it has been expanding its Curbside Express click-and-collect service. “We believe the savviest Giant Eagle customers will use our various, technology-driven services interchangeably,” said Dan Donovan, a spokesperson at Giant Eagle. “The goal for us is to equip our customers with an array of unique and helpful tools.” dsn —Mark Hamstra

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Wegmans Continues to Make its Presence Felt

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amily-owned Wegmans might only operate 98 stores in half a dozen states — New York, Pennsylvania, New Jersey, Virginia, Maryland and Massachusetts — but with 48,000 employees and $8.9 billion in annual sales it is one of the largest privately held companies in the United States. The Rochester, N.Y.-based company dates back to 1916 and is best known for raising the bar on the customer shopping experience, offering tons of product choices, restaurant-quality prepared foods, modern stores, eye-catching displays, and top-notch customer service. It is clear that Wegmans, which has won dozens of awards and distinctions, works hard to live up to its customer pledge: “Every Day You Get Our Best.” The company also widely is recognized for being a great place to work. Employees consistently give the company high marks for its extensive array of benefits, including competitive pay and benefits packages, higher compensation for working Sundays and holidays, flexible scheduling, and tuition assistance. An estimated 7,400 people that work at Wegmans, or 15% of its workforce, have been with the company 15 years or more.

A typical Wegmans features 50,000-to-70,000 products, including more than 4,000 organic choices. Given its larger-than-average-sized assortment, Wegmans stores often range from 75,000-to-140,000 sq. ft. Store design emulates a European open-air market and balances higher-margin perimeter offerings with many value-add departments, including a Market Café, sub shop, coffee shop, organic salad bar/veggie bar, homestyle bar and Asian bar, pizza shop, artisan bakery, pharmacy, housewares, seasonal merchandise, floral shop, greeting cards, gifts, and a large HBC department. The chain has been busy entering new markets as of late. Wegmans made headlines earlier this year when it announced it would be opening a store in the Brooklyn borough of New York City. The store, which has a projected opening date of fall 2019, is located at the Brooklyn Navy Yard, and at 74,000 sq. ft. will be on the smaller side for Wegmans. It will feature a 100seat Market Café on the second-floor mezzanine, as well as a bar serving wine, beer and spirits. As other Wegmans do, this location will follow the European market look and feel. In another round of firsts, Wegmans also announced that it would be opening its first North Carolina store this fall in Raleigh, making it the seventh state the retailer operates in. In addition to the usual Wegmans offerings, the 104,000-sq.-ft. supermarket will feature a family friendly casual restaurant counter called the Burger Bar. In February, Wegmans expanded its curbside pickup service, offered in partnership with Instacart, to include all Rochester stores. The program, which launched a year ago, now is available throughout the company’s current six-state footprint. Neil Stern, a senior partner at McMillanDoolittle in Chicago, said Wegmans excels in everything it does because it continues to push the envelope, particularly when it comes to innovation. “Wegmans has long been an industry leader in perishables and prepared foods. They set the standard in both of these areas and have now extended this to powerful local assortments and the most comprehensive options in meal solutions,” Stern said. He also said that the company stands out for its focus on people. “Wegmans consistently lands on everyone’s list as one of the most admired companies in America and one of the best places to work. The mere fact that such a large percentage of its workforce has been with the company more than a decade is a testament to how well the Wegmans family treats its employees.” dsn —Carol Radice

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RETAILERS MAKING A DIFFERENCE

Ahold Delhaize Successfully Stays the Course

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ith 2,000 stores and 23 distribution centers, Ahold Delhaize has shaped itself into a formidable competitor. Operating a wide range of formats from convenience stores and supermarkets to hypermarkets, its retail banners in the United States include Hannaford, Stop & Shop, Giant, Food Lion, Giant Martins and Peapod, giving the Quincy, Mass.-based company a particularly strong foothold in the east. Its U.S. brands alone generated more than $44 billion in 2018.

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Regardless of format, Ahold Delhaize’s stores manage to balance the convenience of being a one-stop shop with a neighborhood market feel. Its signature easy-to-shop layouts and focus on local and regional offerings repeatedly earn the company high marks with customers. Ahold Delhaize has become known for its on-trend assortments and service departments, and its Giant banner even has gone as far as featuring a Fresh Hall in several locations. Emphasizing authenticity, real ingredients and a home-baked feel, this innovative merchandising concept enables the retailer to showcase its fresh offerings via signature departments. The company markets fresh, locally grown produce, and organic options featured along with an artisan bakery that offers several gluten-free options. Ahold Delhaize has not been shy about investing in its stores to keep them new and modern looking, and its employees have played a central role in creating a reputation for quality service. Observers praise the company for focusing on improving its offerings and creating service-centric stores, rather than relying on aggressively increasing its store count to grow. Ahold Delhaize did make an exception earlier this year when it launched its latest format, Giant Heirloom Market, in Philadelphia, featuring an assortment specifically curated for city neighborhoods. The store’s footprint is just under 10,000 sq. ft., and includes a mix of fresh seasonal foods, local offerings and everyday items. Despite a smaller space, there are plenty of service-based departments. For example, an on-site produce chef is on hand to prepare fruit and vegetables on request. Sampling stations also will be part of the everyday mix. Company officials said they are planning to launch more stores in the near future. Neil Stern, senior partner at McMillanDoolittle in Chicago, said Ahold Delhaize’s attention of late may have been focused on integrating the Delhaize acquisition, but now it is actively working to build competencies like private label across all of their brands. “Ahold is also innovating in e-commerce, where they are leveraging Peapod, as well as external partners,” Stern said, referring to the program the company launched in February called Giant Direct, Powered by Peapod. Ahold built a 38,000-sq.-ft. hub in Lancaster, Pa., which gives shoppers the option of having their online orders delivered to this pick-up location. Stern said the introduction of a smaller freshfocused format, referring to Heirloom Market, was an “innovative, bold and necessary move to remain competitive in certain markets.” dsn —Carol Radice

April 2019 DRUGSTORENEWS.COM

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RETAILERS MAKING A DIFFERENCE

Good Neighbor Pharmacy Builds out Independent Support

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merisourceBergen’s Good Neighbor Pharmacy independent pharmacy banner offers a full spectrum of support to help independents optimize and improve the performance of their pharmacy — from marketing and retail strategy to patient care. It helps pharmacies achieve this, in part, through its employee development program. Combining industry best practices with the insight of each business to tailor a training program to improve productivity, enhance patient satisfaction and better meet the needs of customers. Additionally, its managed care expertise helps negotiate smarter payer contracts with more than 50 pharmacy benefit managers. Its e-commerce platform, ABC Order, has received high marks for its ability to help independent pharmacies streamline workflow, reduce inefficiencies and make the ordering process quick and efficient. Its generics purchasing program, PRxO Generics, offers independents margin-improving solutions that keep costs manageable for patients while remaining financially competitive. At ThoughtSpot 2018, Brian Nightengale, president of Good Neighbor Pharmacy and senior vice president of community and specialty pharmacy at AmerisourceBergen, discussed the important role community pharmacies continue to play. Nightengale said independent pharmacies remain in a unique position to deliver value in the neighborhoods they serve. “The role of the pharmacist continues to expand beyond filling scripts. The consultative role they play in meeting primary care needs and improving patients’ health with drug therapy management are filling critical niches,” he said.

At last year’s ThoughtSpot, company officials stressed the importance in advocating for new valuebased payment models that are based on quality and outcomes resulting from the care pharmacists provide. Since then, it has launched a readiness program that allows for 70 Community Pharmacy Enhances Services Network-participating pharmacies in Tennessee to provide cognitive heart failure interventions. This year’s ThoughtSpot is slated to take place July 24 to 27 at the MGM Grand in Las Vegas. Whether its product sourcing and distribution, supporting community-based care, or partnering with manufacturers to bring an innovative product to market, its commitment to improving patients’ lives are what helps set it apart. It is the depth of its customer relationships, according to Steve Collis, president, chairman and CEO, that allows AmerisourceBergen to advocate alongside them. “Helping people access the healthcare products they need is our mission,” Collis said. “Within this role, we help communicate financially complex, patient-critical issues to legislators and policy makers at the federal and state level.” Alongside its Good Neighbor Pharmacy banner, AmerisourceBergen provides comprehensive pharmaceutical services to various of industries. With $160 billion in annual revenue, the Chesterbrook, Pa.-based company is best known for its value-driving services and cutting-edge business compliance solutions that improve access to health care. The company employs more than 20,000 people in more than 50 countries. None of the company’s achievements would be possible without a top-notch supply chain. During the past decade, AmerisourceBergen has invested more than $1 billion to enhance the quality and efficiency of its stateof-the-art distribution infrastructure and operations. Its 27 DSCSA-compliant distribution centers serve as the center of its network, streamlining logistics for its manufacturer partners and ensuring its customers receive products quickly and safely. The company ships roughly 3 million units per day from these facilities. Those following the company have said that whether it’s through technologies, business coaching or marketing expertise, AmerisourceBergen’s high-quality business model to help community health providers ensure local access to care positions it for long-term success. “Under the leadership of Collis, the company has become a highly profitable business, displaying a remarkable ability to grow, even in a challenging environment,” said Bob Ciura, an analyst and senior vice president at Sure Dividend in Chicago. dsn —Carol Radice

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RETAILERS MAKING A DIFFERENCE

New Leadership Charts Health Mart’s Path Forward

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or more than 180 years, McKesson has played a transformational role in health care. In recent times, it has expanded its focus beyond being a distributor to include healthcare technology and retail pharmacy services, all with the same goal — helping its customers run their businesses more efficiently. In fact, supporting community pharmacy is a focal point of the Las Colinas, Texas-based company. More than 5,000 retail pharmacies across all 50 states are members of McKesson’s Health Mart franchise. According to the company’s website, its intent with Health Mart was to level the playing field for its members and help pharmacies navigate the changing pharmacy market. Its host of solution-based services assist pharmacies in “improving clinical performance, managing operational changes and uncovering additional revenue opportunities to build and maintain a thriving business.” Leveraging the advantages of what independent pharmacies excel at, Health Mart pharmacies take a customer-centric approach, collaborating with patients, taking the time to listen and learn about their needs, helping them understand their prescription drug coverage, answering questions about drug interactions, and pointing out when lower-cost options are available. When it comes to filling prescriptions, speed and accuracy are key. McKesson has heavily invested in its 26 state-of-the-art distribution centers. In some cases, they retrofitted existing centers and, in others, it meant building new ones. The company also has six central-fill facilities with top-of-the-line

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automation, which enables it to quickly and efficiently fill scripts for its pharmacies. In January, the company named Nimesh Jhaveri, a 30-year industry veteran, as president. As someone who has worked his way up the ranks as a pharmacy technician, Jhaveri’s understanding of the company’s many business facets puts him in the unique position of effecting change. Under Jhaveri’s leadership, education will remain a key aspect of Health Mart’s approach. Each year, McKesson invites its community pharmacists to ideaShare, a peer-to-peer networking and learning forum designed to improve their knowledge, performance and profitability. The conference features focused learning, interactive exhibits, engaging workshops and interaction with peers. The goal is to provide pharmacy owners with the expertise and tools to maximize their clinical, operational and financial performance. Recognizing independent pharmacists need all the competitive advantages they can, the forum offers tangible information and skills their pharmacists can implement to get immediate results. This year’s conference takes place June 26 to 30 in Orlando, Fla. Chris Dimos, president of Health Mart and McKesson Retail Solutions, has said that the company’s goal is for Health Mart pharmacies to be top-ofmind for their patients when they think about wellness and quality local health care. The annual meeting, he said, gives its pharmacies the tools to thrive and compete by offering insights and techniques on how to gain access to new patients, foster provider relationships and identify new revenue sources to help grow their business. McKesson actively seeks out partnerships with companies that maintain advancing patient care as a focus, because company officials believe the patient is truly at the center of everything they do. The company’s acquisition of CoverMyMeds, for example, is seen as a helpful step to facilitate stronger relationships between providers and pharmacists. Analysts at Oyat Advisors in Switzerland said companies like McKesson, through its distribution and retail arms, provide an indispensable service and are in position to improve the end-to-end efficiency in the market through investments in technology, clinical programs and services. The company stays relevant, an Oyat Advisors analyst said, by constantly looking for new ways to add value to its pharmacies, citing such examples as Health Mart Atlas, a new managed care tool, and myHealthMart, designed to help Health Mart pharmacies improve performance and patient care. dsn —Carol Radice

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RETAILERS MAKING A DIFFERENCE

Medicine Shoppe Focuses on ‘Caring Beyond Prescriptions’

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edicine Shoppe International, which operates the Medicine Shoppe Pharmacy and Medicap Pharmacy banners for independent pharmacies, includes nearly 500 pharmacies across 43 states. As a division of Dublin, Ohio-based Cardinal Health, Medicine Shoppe is backed by an organization that aims to connect patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management. Backed by nearly 100 years of experience, with approximately 50,000 employees in 46 countries, Cardinal Health generated $136.8 billion in revenue in 2018 and ranks among the top 25 on the Fortune 500 list. An established franchise system with more than 50 years of experience working with independent pharmacies, Medicine Shoppe International partners with individuals interested in opening a new pharmacy or acquiring an existing operation. It also supports independent pharmacy owners who wish to enhance their existing brand through its co-brand offering. Under this arrangement, pharmacies can retain their identity while leveraging the power of the Medicine Shoppe or Medicap Pharmacy brand. Medicine Shoppe International pharmacies are built upon the founding principle that each customer deserves personal, professional care. The company is

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best known for its patient-based services and its ability to meet the needs of the diverse communities each pharmacy serves. Above all, its aim is for its pharmacies to be viewed as trusted healthcare advisors. Pharmacists are encouraged to personalize their approach with patients, taking the time to get to know each individually and their needs as a way to live up to the Medicine Shoppe motto, “Caring Beyond Prescriptions.” The goal is for its pharmacists and their staff to be viewed as partners in wellness and its pharmacy as a community healthcare destination. In addition to filling prescriptions, many Medicine Shoppe pharmacies offer Dispill multidose packaging, flu and strep testing, immunizations, medication therapy management, and medication synchronization. Connie Lane, franchise director at Cardinal Health, said the company supports its pharmacies with the tools and core services they need to succeed in a competitive, ever-changing industry. Whether it is assistance choosing a location or help managing reimbursement, Medicine Shoppe International offers its pharmacies resources to improve performance, streamline their business processes and maximize revenues so that its pharmacists and staff can remain focused on patient care. Cardinal Health consistently acknowledges its retail pharmacy leaders’ efforts. Each year the company honors a pharmacy they feel serves as a role model for other franchisees to follow. The winner is announced at Cardinal Health’s Retail Business Conference. This year’s Cardinal Health RBC meeting will take place July 17 to 20 in Nashville, Tenn. Looking at the larger picture, while Cardinal Health and the industry as a whole is in transition due to political pressures around margin compression, the company is taking steps to decrease its costs and diversify revenue sources. It may take a few quarters for management to fully integrate its recent acquisitions, but analysts believe the company is moving in the right direction. Regan Teague, an analyst at Day Hagan Asset Management in Sarasota, Fla., said that Cardinal Health is making progress on its strategic initiatives to drive future growth, and its focus on reducing costs has begun paying off. Strategic partnerships, he said, are one way in which the company has demonstrated it is refocusing on its core business. “The recent Cordis and Patient Recovery acquisitions show that management is trying to decrease its risk concerning drug prices,” Teague said. “We see this as a positive move for longterm growth.” dsn —Carol Radice

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A Bright Future Natural needs and variety could fuel the sun care category By David Salazar

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un care no longer is just about warm weather and trips to the golf course, tennis court or beach. While the outdoorsy shopper still is a primary driver of the category, an increasing interest in products for daily use is opening up the segment to more shoppers throughout the year. “Overall, we are seeing a big push toward wearing SPF on a daily basis, not just in the summertime or when people are outdoors expecting a lot of sunlight,” said Anastasia Tobias, senior brand manager for Banana Boat at Edgewell Personal Care. “They’re looking to be proactive in protecting their skin.” Additionally, as in most other categories, there is increasing demand for products that are free from ingredients that shoppers perceive as harmful and that seek to reduce potential harm to their skin and coral reefs as local governments and the Food and Drug Administration put more scrutiny on what’s in sunscreen. There’s good reason that manufacturers are looking to meet consumers’ demands in the category. IRI, the Chicago-based market research firm, pegged the market for suntan lotion and oil at $1.5 billion for the 52-week period ended Feb. 24. Though not seeing earth-shattering growth, the category grew at a steady 1.5% in terms of dollar sales, with unit sales increasing by 2.2%. “Consumers are looking for more than

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just SPF protection in the sun care,” said Thomas Kurnava, vice president of U.S. sales at Indianapolis, Ind.-based Australian Gold. “They are looking for secondary and skin care benefits in their products. The category growth is definitely coming through the higher SPF’s, as well as the products and brands that are focusing on clearer products, ingredients and labels.

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SUN CARE

know what they put on their skin absorbs through their skin, so in terms of consumer education that’s a huge difference.” Covington said that consumers are particularly interested in mineral sunscreens, those that use zinc oxide and/or titanium oxide that sit on top of the skin to block UVA and UVB rays, rather than chemical UV blockers. A big driver of interest in mineral-based products has been legislation — most notably in Hawaii — that look to curb such chemicals as oxybenzone and octinoxate in the interest of protecting reefs, whose bleaching legislators have said the chemicals contribute to. These come as the FDA reviews what chemicals it considers to be generally recognized as safe and effective. Goddess Garden recently rolled out its line of reef-safe mineral-based SPF 50 sun care products. The six-SKU line includes lotions and sticks, as well as sport, children’s and baby formulations. The shift in consumer behavior also is partially generational, according to Brooke Strasser, special projects and media sales at Caribbean Sol, based in Orlando, Fla. Founded by Strasser’s father, Bruce Shanks, the company focuses on natural and biodegradable plant- and mineral-based sun products. The company offers Sol Guard sunscreen in SPFs 8 through 30, as well

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as an SPF 20 Faces Only sunscreen that Strasser said is popular for daily use and includes Hawaiian sea plant extracts. “My generation — I’m 26 years old — is more aware and does more research about what we’re putting in and on our bodies,” Strasser said. “Plus, a lot of the people that are taking the place of buyers in the retail world are the millennial generation, and they’re also concerned with making sure they have a unique and conscious brand within their stores.” She said that reef safety is a byproduct of formulating products meant to be gentle on skin. “Our skin is just as sensitive as a coral. It’s 100% about saving the reefs and the marine life, but it’s also about saving your skin so you’re not dealing with skin cancer or irritated skin when you’re out in the sun,” she said. Virginia Beach, Va.-based 3rd Rock Sunblock’s sunscreen aims to bring the engineering background of founder Guerry Grune to bear on sun care to offer a zinc oxide-based product that’s completely unique. Formulated with vegetable glycerin and chelated zinc oxide to increase the product’s pH and boost water resistance and gentleness on the skin, 3rd Rock Sunblock’s sunscreen is 100% food-grade edible. “What’s happened is we’ve taken the product that lifeguards put on their nose

and we’ve made it into a lotion,” Grune said, noting that interest for the product, which is offered in unscented, aromatherapeutic and infant formulations, has been increasing. It isn’t just smaller companies that have noticed the uptick in demand for simpler sun care, either. Edgewell’s Tobias said the company’s Banana Boat Simply Protect line — formulated with 25% fewer ingredients than its other offerings and free of oxybenzone, parabens, oils and fragrances — launched last year and is expanding this year with Simply Protect Sensitive. “We’ve been continuing to see lift toward products that are made with simplified ingredients,” she said. Regarding reef safety, Tobias said that a review of Banana Boat and Hawaiian Tropic products found that two-thirds of their offerings are free of oxybenzone and octinoxate. “This allows us to give consumers the choice to use products that are reef friendly, but also continue to get that same trusted sun protection they know and love from brands they use,” she said. Among needs that manufacturers are trying to meet is creating products that can go hand in hand with a beauty regimen as more consumers focus on daily sunscreen application. Australian Gold offers a Botanical 50 SPF Tinted Face product that is a mineral lotion meant to work as both a sunscreen and a BB cream, and Banana Boat is rolling out a face-specific product Tobias said was aimed at encouraging daily usage. Johnson & Johnson’s Neutrogena brand offers its Hydro Boost Water Gel Lotion Sunscreen lines in two SKUs, SPF 30 and SPF 50. The line contains hyaluronic acid meant to help with skin moisturizing. “Hydro Boost sunscreen doesn’t feel like a traditional sunscreen. It’s lightweight, can act as a makeup primer and is fast absorbing/nongreasy,” a J&J spokesperson said. “It’s also great for all skin tones as it doesn’t leave any kind of white cast on the skin when applied.” Edgewell’s Hawaiian Tropic brand also is looking to position itself as a part of consumers’ beauty routines. The brand recently added to the Hawaiian Tropic Antioxidant Plus line of products by introducing an oilfree, ultra-weightless SPF 30 mist meant for a quick, refreshing application.

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SUN CARE Variety is Key

Even with the macro trends in the category, what consumers want and need from a sunscreen product varies greatly from person to person. Edgewell’s Tobias highlighted the importance of having a wide assortment of products. “We think it’s vital that retailers offer sun care products in a variety of formats, different SPF levels and different forms to meet consumers’ preferences and needs,” she said. “Some are more open to using a lotion, others prefer a spray, and there really are differences in behavior. It’s critical there’s the options.” Goddess Garden’s Covington said that a popular formulation for the brand has been its stick offering, which she said could be put on strip clips. Variety also is important for Caribbean Sol, which offers a range of products from SPF 8 to SPF 30, with the former offering the potential for tanning — though the company recommends starting with higher SPF and gradually going lower. Sport offerings also are key. Melanie Leenhouts, U.S. brand manager at Biosolis, a Belgian maker of organic mineral sunscreens with U.S. headquarters in New York, said the company’s products are used by triathletes who said that even when sweating, it doesn’t streak or wear off. Though the products have a higher price point, Leenhouts said that, “You’re paying for that formula that’s not going to streak. Plus, with the mineral formulation, a little bit spreads really far. If you use it like it’s meant to be used, it will last you a whole season.” Neutrogena has been rolling out higher SPF formulations of its products. The brand’s Cool Dry Sport Sunscreen Spray SPF 100 is designed to stay on through sweat and features a FullReach design meant to make it easy to apply the spray to difficult-to-reach spots. “Our focus on SPF 100 is also inspired by our research recently published in the Journal of the American Academy of Dermatology, which showed that SPF 100 plus provides significantly greater protection from UV rays than SPF 50 plus in actual use settings,” J&J’s spokesperson said. “Knowing that most consumers under apply and forget to reapply sunscreen,

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higher SPF values are more important than ever in the fight against skin cancer.” Offering various SPF strengths and products for active users isn’t the only way retailers might set their assortment apart. J&J’s spokesperson highlighted the ability of its Hydro Boost sunscreen to not leave a white cast on skin. One emerging brand is looking to prevent the same thing by having a product that doesn’t start off white to begin with. Block Island Brands, whose founder Lenard Zide — a lawyer by trade — started with small-batch soap on Rhode Island’s Block Island, offers its Darker Skin Tone, or DST, line of sun care products. The line features a literal contrast to white sunscreen by coming in a tint. He said that it also was partly driven by what he saw as a lack of products for multicultural consumers. “What we do is make our lotion tinted, so that when people put it on their skin it doesn’t come out white,” Zide said. “It’s not a bronzer and it’s no different, but it’s an acknowledgement that there are people of different colors out there.” He noted the company’s DST line outsells its other soaps and sunscreens 5-to-1.

Merchandising Matters

Variety also extends to how products are shared with consumers. Covington said

that Goddess Garden — which offers endcaps and shippers — has used smallersized products to drive consumers’ interest through bins near the checkout. “It’s a great thing to put at the front of your store because it increases turns by putting paid samples at the checkout,” Covington said. “Someone buys a cute little tube that looks exactly like the big tube, so instead of wondering where they got a sample in a packet they threw away, they still have it.” Block Island Brand’s Zide said that impulse still can play a big role in the category, which makes floor stands a compelling proposition for retailers, and Biosolis’ Leenhouts said her company’s counter display can help drive sales at the checkout. Ultimately, most manufacturers agreed that education, whether through in-store signage and branding, in carton educational cards about applying mineral sunscreen properly, or online through social media, can play a big role in helping consumers know what product they need to buy, ultimately leading to a purchase. “Displays or merchandising that help consumers shop the category based on their need, and educating them on the different products would be extremely helpful,” Australian Gold’s Kurnava said. dsn

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SUN CARE PRODUCTS

Neutrogena’s Formulation Focus Flourishes Johnson & Johnson’s Neutrogena brand is looking to give consumers options with its sun care lines. The brand introduced Neutrogena Hydro Boost Water Gel Lotion Sunscreen in SPF 30 and SPF 50. Besides offering UVA/UVB protection, the product is formulated with hyaluronic acid to moisturize skin and is meant to be lightweight to pull double duty as a makeup primer. The brand also is building out its mineral sunscreen offerings with its Sheer Zinc Dry-Touch sunscreen. The zinc oxide-based product uses Neutrogena’s Purescreen technology, which helps absorb, scatter and reflect the sun’s rays.

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Caribbean Sol Gets Sporty Orlando, Fla.-based Caribbean Sol has expanded its lineup of biodegradable mineral sunscreens with the launch of its Sport Mist in SPF 30. The aloe-based product uses zinc oxide to provide UV protection, and includes orange peel to offer a nongreasy dry grip, which company officials said make it ideal for such outdoor activities as golf, tennis and surfing. It also is formulated with hibiscus and green coffee bean to help condition skin and act as natural preservatives. It has a suggested retail price of $20.99 Other brand offerings include the Faces Only SPF 20 lotion and Sol Guard in SPF 8, 15 and 30, as well as a Kid Kare option. Faces Only, Kid Kare and Sol Guard SPF 30 are available in 2-oz. and 6-oz. bottles.

Edgewell Personal Care Builds Variety

Block Island Brand Breaks out BlockOut DST

Following positive response to the Banana Boat Simply Protect line of products — formulated with 25% fewer ingredients — Edgewell Personal Care is adding products for sensitive skin to the line. Banana Boat Simply Protect Sensitive includes two SPF 50 options, one for the body and another for the face, both of which are water- and sweat-resistant for up to 80 minutes. The face product is suitable for daily use. Both have a suggested retail price of $7.99. Banana Boat also upgraded its Sport Performance line to Ultra Sport, which features 11 SKUs that provide endurance against sweat and water. Suggested retail prices range from $6.49 to $8.99.

Begun as a side project by a Boston-based attorney, Block Island brands has grown from its start as a soap manufacturer to include making sun care and lotion products. Of particular interest to consumers has been the company’s DST — Darker Skin Tones — line of products. Its BlockOut DST sunscreen is tinted, though it’s not a bronzer. It’s available in two SPF 50 formulations, a lotion and a continuous spray. The spray, designed to be water-resistant for up to 80 minutes, can quickly be applied at any angle. The company also offers untinted BlockOut in SPF 30 and SPF 45, as well as untinted continuous spray in SPF 50.

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TRENDING SEGMENTS

Ready for a Rebound Beauty brands seek growth in on-trend products and wellness offerings after tough year By Seth Mendelson

Pharmaca emphasizes wellness and clean beauty with such brands as Jane Iredale, Dr. Hauschka, Sanitas Skincare and Juice Beauty.

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fficials at beauty brands across the country have one big message for retailers: Don’t forget about us. In fact, despite anemic results throughout 2018, when beauty brands sit down with top retailers at this year’s National Association of Chain Drug Stores Annual Meeting in Palm Beach, Fla., they will have a compelling story to tell. A year ago, with health care all the buzz, retailers and suppliers struggled to find out how beauty fit into the mass market landscape. Retailers were looking for space to build out clinics and health screening testing areas. All front-end categories were at risk because pharmacy produces nearly 70% of most drug store retailers’ sales.

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Now, it is clear that beauty has held its own and maintained its square footage. In fact, some said that beauty has found its place in the wellness revolution. As Stefano Curti, global president of Markwins Beauty Brands, said, “You can’t be beautiful without being healthy.” Wellness will be on everyone’s lips again at NACDS Annual, brands and retailers who are packing their bags said. Citing statistics from the Global Wellness Institute, wellness and beauty expert Jennifer Walsh said “wellness” is now a $4.2 trillion global market. Beauty is an important component of the total picture. “Drug stores have a huge opportunity to tell their wellness story and come out

ahead, and they have the perfect audience,” Walsh said. There already are examples of chains taking action. More than 3,000 Walgreens beauty consultants have been trained to manage the physical changes associated with cancer treatment, including the loss of eyebrows and eyelashes; dry hair, dry skin and discolorations; sunlight sensitivities; and changes to nails and cuticles. The program, called Feel More Like You, follows a test last year and is the first-of-its kind that merges pharmacy and health and beauty expertise to help people living with cancer. As part of CVS Pharmacy’s four-store pilot that offers on-site “Glamsquad” experts, skin care is among the services

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TRENDING SEGMENTS offered. Living healthier also was a major push behind the chain’s Beauty Mark initiative, where digitally altered images in the beauty aisles are being eliminated. “As a purpose-led health care company, as well as one of the largest beauty retailers in the country, we want the millions of customers that visit CVS Pharmacy locations each day to see a more authentic and diverse representation of beauty,” said CVS Pharmacy president Kevin Hourican at the reveal of the first of the unedited images earlier this year. Other better-for-you beauty moves from the chain include the removal of parabens, phthalates and, the most prevalent, formaldehyde donors from more than 600 store brand beauty and personal care items (to be completed this year), and more natural beauty items on shelves. “Our purpose is to help people on their path to better health and to pass on a healthy self-image to the next generation,” said Maly Bernstein, vice president of beauty and personal care at CVS Pharmacy, during a tour of the Times Square store, where the images were first displayed. “We are partnering with our lead brands in the marketplace to advance the initiative to promote a healthier mindset and healthier access to beauty.” Target and Walmart also are going deeper into beauty products with fewer chemicals. Under the direction of Christina Hennington, Target’s senior vice president of merchandising, essentials, beauty and wellness, the chain has added more naturally positioned products at accessible prices. More informed shoppers, who study labels, also encouraged Target to adopt its Chemical Strategy two years ago to bring transparency to ingredients. There also is a wellness icon program, where beauty is among the first categories to feature the marker. “Whether it is products free of phthalates, sulfates or parabens, we want our guests to have clear information on the products they are looking for and find them quickly,” Hennington said. Walmart also is making it clear that wellness is on the front burner. A case in point: The chain just launched Evolution_18, its first line of beauty supplements sold in

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its beauty department, according to Jody Pinson, vice president of beauty at the chain. Evolution_18 is created by the legendary Bobbi Brown. “At Walmart, we are always expanding our assortment to meet customers’ needs, and with that, we believe inner beauty is very important. It was a natural fit to partner with Bobbi Brown on the launch of 10 new Evolution_18 products,” Pinson said. “All will be available exclusively at select Walmart stores and on Walmart. com. We also believe beauty and wellness products should be accessible to everyone, and with the emergence of beauty supplements, we saw an opportunity to introduce Evolution_18 at Walmart’s everyday low prices.” The lineup of supplements will be priced under $20. Walmart also sells Found, a naturally-positioned cosmetics line, along with many natural hair care ranges. Pharmaca, the drug store chain that places a tremendous emphasis on natural, continues to outpace mass beauty gains and remains a leader in wellness and clean beauty with such brands as Jane Iredale, Dr. Hauschka, Sanitas Skincare and Juice Beauty. Another example of fusing beauty with pharmacy that U.S. retailers are watching is at Toronto-based Shoppers Drug Mart. The retailer is testing the Beauty Clinic by Shoppers Drug Mart, offering Botox injections, fillers, laser treatments and medicalgrade peels. Rachel Huckle, senior vice president at Shoppers Drug Mart, said the company’s research shows these types of

cosmetic procedures are in high demand with its customers. Beyond adding more nontoxic products, mass retailers are attempting to serve needs of younger shoppers with independent brands. CVS Pharmacy is adding the Essence makeup line as part of the launch of 60 brands that also included Sun Bum and Bliss. Walgreens now has lines not sold in other mass doors via its Birchbox pilot, including RMS Beauty, Embryolisse, Wander Beauty and Sand & Sky. Rite Aid offers Cake, a vegan and cruelty-free brand. Target has added eight brands to serve the needs of multicultural shoppers, including The Lip Bar and Urban Skin Rx. Brands also are embracing the wellness culture. Cover Girl got certified as cruelty free by Leaping Bunny. Yes To masks became part of self-care Sunday routines, and the brand amplified its natural ingredients messaging. Pacifica is expanding its product lineup, including supplements offered at Target. Clean makeup often is thought of as a prestige or specialty niche. Yet Markwins’ Wet ‘n Wild brand is working toward being totally vegan — 70% of its products already are classified as vegan. The beauty industry’s place at the wellness table helped it maintain its footage, but there is no way to sugar coat the past year in mass market cosmetics sales. Stephanie Wissink, an equities analyst at Jefferies, said for most of 2018, cosmetics sales were down — but results were mixed by categories and brands. Skin care, however, was an overall category savior, producing gains all year. Within food, drug and mass, she said, cosmetics categories are struggling because of shoppers’ waning interest in the category at mass, online competition and digitally native brands. Evelyn Wang, the new chief marketing officer at Milani Cosmetics, confirmed that skin care is trending up and color is experiencing contraction. “Part of this is just math and normal cyclical category behavior: What goes up must come down and vice versa,” she said. “Part of this is ‘trend fatigue,’ after many years.” She said that after a few years of heavy makeup looks posted on Instagram,

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TRENDING SEGMENTS consumers are on the hunt for products that enhance rather than cover up or transform their features. “By no means does this mean that consumers have stopped wearing makeup,” she said. “However, I believe there is also a deeper change happening in that consumers are actively using their buying power to choose brands that they feel have an authentic voice and story, and in a lot of cases that means buying a product from an indie brand.” There already are hints of improvement — the result of plans put in place by retailers and manufacturers over the past year. Lip category sales, for example, were up 1.5%, according to IRI data for the 52-week period ended Feb. 24. For the first time in five years, the nail care segment showed a small increase at 0.6%. Cosmetics accessories rose 2.4%. Other segments with the broader categories showed more success, such as a 34% uptick in sales of lip treatments, continued interest in brow makeup with sales expanding 18.2%, and a 27% jump in artificial nail volume. Also, efforts to burnish the image of mass beauty could be paying off, Wissink said. “Unit sales are tacking below dollar sales for each category, implying an ongoing trade up into masstige,” she said. Brands spent the past year upping their game with new products, many quickly brought to market to keep up with specialty and direct-to-consumer foes. They hope efforts will pay off. Already there is reason to celebrate at e.l.f. The brand, once the darling of the industry, had some hiccups last year. Swift actions helped the Oakland, Calif.-based company rebound. E.l.f. unveiled a program, called Project Unicorn, that involved new packaging and fresh shelf space strategies. Those moves already captured the attention of retail analysts. Wissink said that sales have “meaningfully improved.” She also said that e.l.f. focused its presentation on three to four most popular categories, including primers, brushes and eye products that separated it from competitors. Although John Irvine, national sales manager for Beauty 21, agreed mass has been challenged, he said his company has bucked

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the trend. “Due to strong collaboration with our retail partners, our L.A. Colors business was up 17.6% in dollars driven by increases in all subcategories —eye, face, lip and Nail. Our outlook for 2019 remains strong across all categories.” He added L.A. Colors is the number sixth in units sold in all mass cosmetics. “Our model of building on-trend, high efficacy, and high value product resonates with the consumer,” he said. Eyes also are on Milani as it builds out an executive team expected to help broaden its reach. Milani has long had a stellar reputation for its inclusive and quality cosmetics. The new team in place has high-wattage beauty power. Most recently, David Berk was named chief financial officer. He joins Grace Ray, who came to the Gryphon Investors-backed Milani last June from Living Proof. Also, Milani scored a coup

with the hiring of Wang as chief marketing officer from Wet ‘n Wild. “You will see us continue to build out our eye category in the second half of the year with new items that showcase Milani’s signature high quality, and also have been designed to capture one’s attention visually,” Wang said. Revolution Beauty, a newcomer to the U.S. market, is making a mark after becoming a leader in the U.K. The brand doubled its space in Ulta Beauty with additional room awarded for sibling brands Revolution Pro and I Heart Revolution, launching in early August. Revolution’s viral hit Conceal & Define concealer extended its conealer and foundation shade ranges to 50 in January. “We have the ability to react quickly to create the products our consumers are passionate about and are fortunate to have a great partner with Ulta Beauty, who fully supports our fast beauty model and embraces our entire portfolio of brands,” said Shawn Haynes, the Revolution Beauty CEO of North America. The mass market also caught onto the Fenty Effect when such major players as Revlon, L’Oréal and CoverGirl extended shade ranges to meet all skin tones. L’Oréal, in particular, has consistently posted gains despite the fact that many heritage brands are declining. Some retailers singled out key items under various L’Oréal brands, including Age Perfect for L’Oréal, Maybelline Master Chrome metallic highlighters and L’Oréal Infallible Full Wear concealer, that are outperforming the market. With color cosmetics sales soft, retailers are turning to accessories, which posted a 2.4% increase in sales in the most recent IRI period. The classification includes makeup brushes, artificial nails and lashes. Walmart officials said the chain does a big business in makeup brushes. In nails and lashes, Kiss Products is rolling out nails that are slimmer and fit more snugly, and it is adding new lashes to its Lash Couture Faux Mink collection with the release of Lash Couture Naked. Anna DeVita-Goldstein, Kiss senior vice president of global marketing, said, “Women want more volume and length, and it simply cannot be achieved with mascara.” dsn

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ONE-ON-ONE

More Than Lip Service Lique offers prestige lip care and color at an affordable price

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ique Cosmetics is looking to bring something new to the lip care market. The brand, which offers natural ingredient-based formulas and high-pigment, long-lasting color formulas in unique packaging, also aims to sell them at an affordable price. Drug Store News spoke with Kristin Bibb, director of cosmetic brands, and Ashley O’Rourke, co-founder and creative director, of Lique Cosmetics about the lip care category, as well as Lique and what it brings to the space. Drug Store News: What makes Lique Cosmetics stand out in the industry? Ashley O’Rourke and Kristin Bibb: Lique is the only lip brand on the market that offers prestige lip care and color products that give a high-quality lip total solution at a “masstige” price. We made certain that each natural ingredient was vetted and each component was molded to offer the best possible formula and product delivery to

Ashley O’Rourke (left), co-founder, and Kristin Bibb, director of cosmetic brands and creative director, of Lique Cosmetics

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the consumer at under $14. Lique offers a lip routine that provides an equivalent solution for your lips that you can find for your face and body. DSN: With the trend in natural skin solutions at an all-time high, how is Lique Cosmetics maximizing the potential both at retail and with the consumer? AO and KB: Having natural and/or organic ingredients in beauty products is a cost of entry into the market today. The consumer is extremely savvy and ultimately wants to avoid any products with harmful additives. Lique fills a void in the natural care aisle by offering a start-to-finish lip care and color routine that won’t break the bank. We’ve created several different in-store merchandising solutions that offer care and color products that can easily be displayed on any shelf or adapted to a specific fixture. Both merchandisers and the individual product packaging offer education to the consumer on product benefits and help to seamlessly build a custom lip routine that will give the consumer continued results that will build loyalty and show the retailer increased units per transition. DSN: What do retailers need to do to maximize POS sales from the natural lip category and Lique Cosmetics? AO and KB: The retail landscape in natural lip care is very redundant and the consumer is tired of seeing the same brands with the same story in continuous locations across retail stores. They are fleeing the traditional stick lip balms for innovation in formula and delivery. Sales are up double digits in any lip solution that offers a variation from traditional lip balm, such as oils and masks. Same goes for product delivery, with sales up double digits for natural lip products that apply through a tube, egg or wand. Retailers need to expand beyond the basics and capitalize on the consumer

looking for a natural lip solution that goes beyond the basic stick. By offering the consumer Lique, a natural ingredient-based solution with formulas that are on trend and nontraditional, with delivery systems that are modern and interesting, and packaging that defines the routine and benefits in a matter of seconds, retailers and consumers will win.

“Retailers need to expand beyond the basics and capitalize on the consumer looking for a natural lip solution that goes beyond the basic stick.” DSN: What does the future hold for Lique? What is on the horizon for future product launches and building the Lique community? AO and KB: The social platforms surrounding the Lique brand are the core of our community. It allows us to connect with our consumer, gather insight into what she loves and what she hates, and engage with as many followers and consumers, as possible. It’s imperative to us that we educate and share what makes us tick and drives us to be better in the world of beauty, always giving back, taking care of our furry friends, and investing in ingredients and packaging that is focused on taking care of Mother Nature. Lique will continue to push for innovative formulas that offer the consumer a true prestige solution in the world of beauty at a price everyone can afford. We are beginning with lips, the fastest-aging area on a woman’s face, but are always focused on the future and providing solutions that make aging gracefully easy and attainable for every beauty enthusiast. dsn

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SPOTLIGHT ON: SKIN CARE

L’Oréal Paris’ Revitalift Derm Intensives 1.5% Pure Hyaluronic Acid Serum For consumers seeking something in the anti-aging sphere, L’Oréal Paris’ offers Revitalift Derm Intensives 1.5% Pure Hyaluronic Acid Serum The serum is meant to visibly reduce fine lines and wrinkles, as well as replenish moisture. Just 2-to-3 drops need to be applied to the face and neck area in the morning and evening for best results. The serum has a suggested retail price of $29.99 and is sold at lorealparisusa.com.

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Neutrogena Hydro Boost City Shield Eye Serum Keeping the focus on the face, the Neutrogena Hydro Boost City Shield Eye Serum helps keep the delicate area around the eyes hydrated and revives it for a softer appearance. Formulated with hyaluronic acid, antioxidants and multivitamin capsules to help skin bounce back from environmental stressors, the serum also is alcohol-and oil-free. Neutrogena Hydro Boost City Shield Eye Serum carries a suggested retail price of $19.99 at food, drug and mass retailers.

Yes To Coconut Milk Mistified Moisturizer Moisturizing is key to keeping skin from drying out, and the Yes To Coconut Milk Mistified Moisturizer looks to keep skin hydrated anytime, anywhere — and it can be applied over or under makeup. The product is formulated with coconut milk and coconut oil, as well as 96% natural ingredients. It also is free of parabens, SLS and silicone; is Leaping Bunnycertified; and is vegan. The moisturizer retails for $12.99 and can be found at Target, Ulta Beauty, Walmart, CVS Pharmacy and Rite Aid stores.

Garnier’s Micellar Cleansing Water All-in-1 Waterproof Makeup Remover and Cleanser For consumers seeking something that soothes skin to include as part of their nightly routine, Garnier’s Micellar Cleansing Water All-in-1 Waterproof Makeup Remover and Cleanser does exactly what the name suggests. Using micelle technology, it actively captures and lifts away dirt and impurities, leaving skin refreshed and cleansed. Currently retailing for $8.99, it can be found at mass retailers nationwide and at garnierusa.com.

Dr. Bronner’s Naked Organic Lip Balm with Beeswax Last but not least, consumers can’t forget about the lips. That’s where Dr. Bronner’s Naked Organic Lip Balm comes in. Formulated with beeswax, the balm soothes and protects lips, and is made with such oils as jojoba, avocado and hemp. Besides the naked scent, the lip balm is offered in lemon lime, orange ginger and peppermint varieties Retailing for $2.69, the lip balm currently can be found on Target shelves and at target.com.

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PHARMACY | VOICES OF THE INDUSTRY

The World Speaks Experts offer their views on a changing pharmacy industry

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hange is a constant in the pharmacy industry. With ongoing fluctuation regarding how pharmacists are compensated for their services and even what those services are, the practice of pharmacy is transforming alongside care delivery demands. To take the pulse of the industry, Drug Store News asked 11 pharmacy experts — including those in academia, pharmacy associations, generics companies, technology firms, and pharmacists working in the field — what opportunities and challenges they are experiencing, and what retailers need to do to be successful. In the columns that follow, one thing is evident: all of the experts, many of whom have been in pharmacy for many decades, are very excited about where pharmacy is today and where it is headed.

Embracing the Opportunity Accompanying Change

Change. Every time we hear the word, a series of emotions is released within us. Change brings about emotions of excitement, fear, anxiety, hopefulness and even Michael Hogue joy. Pharmacy is a profession that is in the midst of perhaps the greatest changes experienced in more than 50 years. Sometimes, when monumental change happens — transformative change that literally redefines a person, process or profession — we must go through some intense storms. Storms in life define us. How we handle difficulty in the process of change speaks a lot about our character, our core beliefs and our convictions. When these storms come, we can choose to buckle under the weight of the change and give up, or we can

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struggle through the change. Personally, I’ve found that it’s during the struggles that I tend to learn more, to deepen my beliefs and convictions, and to grow as a person. And our profession is no different. The pain and difficulty of change in our profession is very, very real. In fact, some students and prospective students may be questioning if pharmacy was the right career choice. Let me assure those of you reading this message that, unequivocally yes, pharmacy is a great career choice. Why? Because there’s a breakthrough coming. How do I know this in the midst of the acute pain of today’s reality? Because for the first time in history, Congress and government agencies increasingly are recognizing the value of the pharmacist to the healthcare team. It’s only a matter of time before federal provider status is a reality. Physicians, nurses and consumers are advocating for pharmacists in the media, and even in legislatures. The outcomes literature is very strong in demonstrating the value of the pharmacist. More insurance companies and employers are paying pharmacists for ensuring appropriate medication therapy outcomes than ever before. All of this change has been incremental when viewed individually, but in total represents a seismic shift from the past, and one that our profession embraces. We are reaching what Daniel Pink called “The Tipping Point” towards our breakthrough. Now I know that many of you reading this message are going to say, “What does this guy know? He’s an academic sitting in an ivory tower, and he has no clue what we’re experiencing in practice.” I can understand that perspective; yet, as a former independent pharmacy owner, a former Walgreens pharmacist, and having regularly done relief pharmacy staffing until just the past few years, I do feel I maintain a strong connection to community

pharmacy practice. I’m an active member of the American Pharmacists Association and the National Community Pharmacists Association — both organizations are fighting hard for our profession. You’re right that I’m not in the trenches every day, however, I hope that these perspectives from my national involvement will give you some hope for the future.

It’s only a matter of time before federal provider status for pharmacists is a reality. After all, the pharmacy profession could use some hope. I’m excited about the future of our profession, despite the realities of today because I see what’s coming. We must support our national associations through our membership and through active participation, so that they can fight for us in the state houses and in Washington, D.C. Let’s not give up hope, because our profession is right on the cusp of our breakthrough. —Michael Hogue, president-elect designate of the American Pharmacists Association and dean of Loma Linda University School of Pharmacy in Loma Linda, Calif.

Automating a New Care Delivery Model

This will be a year of major shifts in pharmacy, as new players enter the field and adoption of pharmacy innovation continues to increase. The industry is spending $450 Scott Seidelmann billion on medication management each year and drug costs are

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PHARMACY | VOICES OF THE INDUSTRY increasing 10 times faster than health system revenue. Meanwhile, pharmacy staffs often are stuck performing repetitive administrative tasks that keep them away from patient care. In fact, pharmacists spend 76% of their time on nonclinical activities, according to an American Society of HealthSystem Pharmacists national survey. These statistics show that the current medication management model is clearly broken, driven by outdated human workflows and manual processes that are not only prone to medication errors, but create opportunities for diversion and driving up costs. We believe health care is at a crossroads and radical change in the medication management model is imperative. As an industry, we need to provide pharmacy leadership the tools, data and expertise to drive operational change. Autonomous pharmacy is a vision to develop a zero-error, fully automated medication management infrastructure. Autonomous pharmacy leverages automated solutions that are designed to digitize and streamline workflows; predictive intelligence that provides actionable insights to better understand medication usage and improve pharmacy supply chain management; and expert services that are an extension of pharmacy operations to support improved efficiency, regulatory compliance and patient outcomes. We envision a care delivery model where the pharmacist is no longer sorting, picking, checking, reconciling and transporting medications; formulary updates are made with the click of a button; and predictive intelligence offers inventory visibility to better plan for drug shortages and manage cost. The autonomous pharmacy will enable a 100% verified process, providing total confidence that every patient is getting the right dose, at the right time, at the right place. Bottom line, we want to enable the pharmacist to practice at the top of his or her license to transform the pharmacy care delivery model. —Scott Seidelmann, executive vice president and chief commercialization officer at Omnicell

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Creating a Crystal Clear PharmacistPatient Relationship

Inadequate technology at the drive-through is crippling pharmacists. As a professional authority figure, the pharmacist must be understood. Their No. 1 responsibility is to William Sieber follow the directions as prescribed, and to provide treatment as described. Communicating sensitive, and potentially life-saving, information to patients means that questions need not only to be answered but also clearly conveyed. All parties must be of confident mind throughout the process. Pharmacists should be enabled and augmented by technology — not inhibited. The pharmacist-patient relationship requires the sharing of concise and detailed information, which can include times, dosage amounts, possible interactions with other medications, and more. Articulation and patient understanding are key. The customer experience at the drivethrough too often is all affected by illequipped and outdated drive-through technology. Also common are transaction drawers that can’t effectively handle large prescriptions, sometimes forcing elderly patients to come inside to pick up their scripts. Such inconveniences may drive customers to a competitor. Since customer interaction and clear understanding are vital, pharmacist retailers should consider upgrading their drivethrough equipment. Products that clean up audio signals are important, though not all systems are created equal. One product that stands out above the rest is Bavis Enhanced Audio Module, or BEAM. This innovation eliminates up to 90% of background noise at the drive-through. Diesel engine noise, the whirring of fans and static from electronics, among other sounds, are nearly eliminated. Crystal clear audio can be achieved. Next, think about replacing your laneone transaction drawer with something durable and high capacity — and heated if possible. This is a nice feature for both patient and pharmacist.

Today, pharmacists’ duties are complex. Thankfully, pharmacy-specific solutions are available. The biggest opportunity for pharmacists today is to truly reach their patients. Retailers should focus on empathy with patients and their experience, not just as a concerned customer, but a human being who needs help and seeks caring advice. This builds relationships. Relationships, if nurtured, grow and blossom into something great. —William Sieber, president of E. F. Bavis and Associates

The Potential Promise of Embracing Telehealth Tools

As technology continues to transform the way people live and how we access different goods and services, healthcare professionals, including pharmacists, are seeing firstMagaly Rodriguez hand the impact this de Bittner transformation is having on patients’ expectations on how they access healthcare services and how those services are delivered. Technology allows for nearly instant access to a variety of information, goods and services. Patients can get advice from healthcare experts through interactive websites and mobile apps, or arrange for delivery of their medications straight to their door with a click of a button. In some instances, these advances help patients access healthcare experts by phone or through the use of telehealth tools. These advances call for a transformation of the way in which we as pharmacists have traditionally delivered pharmacy services, with a particular emphasis on community pharmacy. Patients want alternative approaches. They no longer are content to drive to their local community pharmacy and wait in line to obtain their medications, immunizations or other pharmacy services. While this technological revolution poses some challenges to our current business model, I believe it also offers numerous opportunities for the pharmacy profession

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PHARMACY | VOICES OF THE INDUSTRY to adjust the ways in which we provide care and deliver services, including medication therapy management, which requires a clinical interaction between the patient and pharmacist, as well as the development of a pharmacist-patient relationship built on mutual trust and collaboration. So, the question at hand is: Are we as pharmacists ready to embrace technology and transform the delivery of pharmacy services to seize this opportunity? We are starting to see the rapid emergence of telehealth pharmacy services that aim to address patients’ evolving needs. For example, we can look to Amazon’s recent decision to enter the pharmacy space, which has resulted in much speculation around the industry. Patients want and demand easy and instant access to services and medications. We are called to meet patients where they are, instead of requiring that they come to us. We must transform our profession to better integrate into a new paradigm — the pharmacist on demand. The pharmacist on demand is one that easily can be incorporated into virtual healthcare teams; one to whom patient data is easily and privately accessible, whether from our workplace computer or the tablet that travels with us from our home to our office, or to the call center. One that is easily accessible to a patient no matter where he or she is. Are we prepared for this new reality? What skills will pharmacists, pharmacy students and pharmacy personnel require to meet the needs of these emerging models? Are employers and pharmacy schools actively preparing pharmacists and student pharmacists for this new future? At the University of Maryland School of Pharmacy, we are pioneering the development of new models of care, with the ultimate goal of answering some of these questions. Through our Pharmacy e-Health Center, the school of pharmacy is identifying the knowledge and skills needed to effectively deliver pharmacy services through telehealth, and training the next generation of practicing pharmacists in this emerging field. The accolades we have received from health systems, patients and student pharmacists are early indicators of

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the extraordinary need for telehealth services in today’s market. In fact, preliminary data even indicates that positive patient outcomes and cost savings can be achieved when care is delivered using telehealth technologies, such as those available through our Pharmacy e-Health Center. Could telehealth be the answer to increasing patient access to pharmacy services and overcoming the challenges to educating patients about the clinical services we provide? As we continue to work to get patients to accept, pay for and engage in many of our services, perhaps the answer lies in these technological advances. But, is this the transformation and necessary evolution of pharmacy services that we need? While many pharmacists, healthcare systems, insurance companies and other innovative organizations are embracing telehealth models, I ask: Are we moving too slowly? When will it become mainstream? —Magaly Rodriguez de Bittner, associate dean for clinical services and practice transformation and executive director at the Center for Innovative Pharmacy Solutions at the University of Maryland School of Pharmacy in Baltimore

Taking Necessary Steps for the Future

Pharmacy is in a state of evolution like much of health care and retail. Reimbursement rates and DIR fees continue to erode margin. Online sales continue to increase and retail Doyle Jensen sales continue to decline. To remain relevant, pharmacies must have a value add or differentiation other than location. Their pharmacists must be empowered to engage patients, with the filling of prescriptions no longer the main focus of their practice. Additionally, technician shortages and increasing technician rates compound the growing need for smart use of technology. Centralization of fulfillment increasingly has been accepted. It has proven to reduce overall costs and free up time for pharmacists and staff to deliver valuable patient care.

From a technology standpoint, and more specifically to address fulfillment, pharmacy has painstakingly learned that centralfill technologies fill prescriptions at the lowest possible cost and at the highest level of safety. The impact on cost is substantial, with reductions of 35%-to-80% of current production costs. This savings then can be reallocated to the development and delivery of impactful patient services. These closeddoor facilities also provide the flexibility for the prescriptions to be delivered back to the store, mailed or delivered directly to the home, which enables more differentiation.

Centralization has proven to reduce costs and free up pharmacists and staff to deliver patient care. Resistance to change is real, and some organizations struggle with pivoting to the centralization model. Effective change management is key to educating their pharmacy operations so they understand, appreciate and embrace the value that the improvements will bring to their operation and business. As you’d expect, acceptance or buy in down to the staff level is extremely important to the success of technology initiatives, and ultimately to the patient’s overall experience. The organizations that make the necessary and smart investment in technology to transform their pharmacy operations likely will lead the way in redefining the roles of pharmacists and pharmacy staffs, and in improving the overall patient experience. With that comes increased morale, new and better services, new business, and improved outcomes. With the industry’s propensity for change, there’s excitement and inspiration about so many topics and developments. Pharmacy operations executives frequently talk to me about a goal that centers on the rise of pharmacists to be relevant in patient care — having the opportunity to practice at the top of their license, gain provider status, and make a difference in improving patients’ overall health care.

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PHARMACY | VOICES OF THE INDUSTRY What should the pharmacists retailers do going forward? Invest in technologies that make sense, help you achieve your goals, and deliver a measurable return on investment. If you don’t disrupt yourself, somebody will. —Doyle Jensen, executive vice president of global business development at Innovation

Networking to Have Pharmacy’s Value Recognized

It’s complex, convoluted, confusing. And costly, to boot. It’s the prescription payment model. Patients don’t know what they’ll pay when they walk into the Doug Hoey pharmacy. Pharmacists don’t know how much they’ll be told to charge the patient or how much the pharmacy will be reimbursed. Simplifying the pharmacy payment model is an enormous undertaking that will necessitate participation from all players in the prescription medication channels. It’s desperately needed, though, and is a mission that we at the National Community Pharmacists Association are focused on doing our part to see through. And we’ll be working to do that using advocacy — helping federal and state governments save money — and through market possibility like Community Pharmacy Enhanced Services Networks USA, helping to lower overall healthcare costs.

Generating Savings

Whether pushing to eliminate retroactive pharmacy fees in Medicare Part D or working with state Medicaid agencies to enact solutions in states where the broken pharmacy payment model is resulting in hundreds of millions of wasted taxpayer dollars, NCPA is committed to ensuring accountability to taxpayers, affordable costs for patients, and fair reimbursements for community pharmacies.

Lowering Costs

NCPA co-founded CPESN with Community

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Care of North Carolina to help pharmacies develop local care networks, demonstrating value by coordinating patient care with broader care teams to help ensure quality and control costs. It is a clinically integrated network, allowing it to approach plan sponsors to negotiate value-based programs and payment for providing enhanced services. More than 2,000 pharmacies have caught on to CPESN’s vision to diversify the payment strategy. Participating pharmacies still will be reliant on revenue from dispensing, but that revenue must be augmented from the patient care services they provide. In other words, all their eggs aren’t in the product reimbursement basket. Through advocacy and opportunities like CPESN, changing the pharmacy payment model will happen. Maybe not today or tomorrow, but a different type of pharmacy practice and a different pharmacy payment model are in our sights. Challenging, sure. But essential for mending health care in America. —Doug Hoey, CEO of the National Community Pharmacists Association

The Biosimilars Wave Is Coming. Are Pharmacists Prepared?

The conversation at the pharmacy counter traditionally has been about which pills to take when, but with advances in medical science, a new frontier — biologics and bioChip Davis similars — is flourishing. For cancer, rheumatoid arthritis, inflammatory bowel disease, psoriasis, and an ever-growing list of conditions, biologic medications represent important new treatment options. Yet too often, these come with a hefty price tag that might be out of reach for patients or payers. Biosimilars offer a solution to the high cost of brand biologic medications. For those unfamiliar, a biosimilar is a Food and Drug Administration-approved biologic medicine that is clinically equivalent to a previously approved brand biologic medicine, which means they are just as safe and

effective, and have no clinically meaningful differences from the brand. The potential savings these products may provide — up to $54 billion over the next 10 years in the United States — should excite anyone who cares about health care. A recent study found that biosimilars could mean new access to treatment for an additional 1.2 million patients — in particular women, lower-income and elderly individuals.

European patients have collectively experienced more than 700 million days of biosimilar use with no safety or efficacy concerns. As trusted partners for patients, pharmacists play a critical role. They are and will continue to be a critical voice in educating patients on biosimilar medicines. The American Pharmacist Association recently published “Biosimilar Basics for Patients,” a primer on biosimilars that answers important questions on the confidence patients and pharmacists can have in the safety and effectiveness of these innovative treatment options. As APhA indicates in its primer, “pharmacists can communicate with you and your doctor about whether there is a biosimilar available and whether this is a good option for you.” Europe, where more than 50 biosimilars have been approved, already is enjoying the benefits of biosimilars. European patients have collectively experienced more than 700 million days of biosimilar use without any safety or efficacy concerns. Biosimilars will have delivered between $11 billion and $33 billion dollars in savings across Europe by 2022. Savings and increased patient access are the reason the relationship between patients and pharmacists is the most crucial to healthcare delivery, next to the relationship between patients and their doctors. Biosimilars represent an exciting next chapter in this story. —Chip Davis, president and CEO of the Association for Accessible Medicines

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PHARMACY | VOICES OF THE INDUSTRY Educating Patients, Payers on Value of Pharmacy

It is an exciting time to be a pharmacist. We are educating our student pharmacists at a higher level than ever before to provide direct patient care. All students now obtain a Janet Engle minimum of 300 hours of early experiential education in addition to the last year of full time advanced experiential patient care experiences. The importance of residency training has continued to gain traction in the profession and the number of community pharmacy residencies is growing along with hospital and ambulatory care-based residencies. More and more pharmacists are becoming board certified by the Board of Pharmacy Specialties in their specialty area. Along with our medical counterparts, pharmacists are becoming credentialed and privileged in various healthcare settings. Interprofessional team care, including the pharmacist, is becoming the norm rather than the exception. However, even with all of these strides, we still have one major roadblock — the need to tackle the issue of payment for pharmacist services. This continues to be a barrier to full integration into the healthcare team. For example, how many times have we helped our patients navigate the nonprescription drug aisle? Managed care and other payers must view pharmacists’ evaluation of specific medical conditions and the initiation of treatment with appropriate OTC medicines as being in the patients’ and payers’ best interest, and they must compensate for it. We need patients to truly appreciate that OTC medicines are important, and that they must be taken seriously and treated with the same respect that they give prescription medicines. In order to provide the best care for our patients, we need to address real impediments to delivering patient care in all pharmacy practice settings so that today’s pharmacists can take advantage of new patient care opportunities. No matter how highly educated or motivated a pharmacist is, care

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cannot be provided to his or her patients if the workplace environment provides barriers to providing this care. We can and must do more to educate patients — and payers — about the value of pharmacy services. Equally important, we must insure that the profession has the capacity to provide these services as demand increases. —Janet Engle professor, senior associate dean for professional and international affairs at the University of Illinois at Chicago College of Pharmacy, and past president of the American Pharmacists Association

Provider Status Could Strengthen the Industry

When I think about the state of pharmacy, I inevitably begin to think about the state of pharmacists. This group of medical professionals joined a field that would allow Chris Fitzmaurice them to have a direct impact on the care of their patients, to have a level of autonomy to run their practice, and to be on the cutting edge of novel therapies. While all of this remains true, I believe that today’s pharmacists want more, more access to increase the scope of impact on their patients; more autonomy to run a flexible, fleet practice that can quickly respond to change; and more educational opportunities to be a leading voice for new and emerging treatments. Pharmacy is the sum of its professionals. The long-term success of one depends on the other. Both are at their best when they mutually embrace. Pharmacists should accept a greater measure of responsibility and continue to accept the demands of medical professionals, as well as expand on what it means to provide pharmaceutical care. Pharmacies should nurture the things needed to meet these demands: educational opportunities, increased pharmacist input on business decisions, and greater efforts to create a medical network, both intraprofessional and interprofessional. One exciting area where pharmacy can take steps into the future: provider status.

It’s been long established that increased access to health care increases the likelihood that a person seeks it out. By granting pharmacists provider status, even in a limited capacity, millions would be more likely to seek care, leading to improved outcomes and an additional way to ease a straining U.S. healthcare system. Payers, as well as state and local governments, should be open to new ideas about how pharmacists can serve as providers. This is a two-way street. Pharmacists cannot solely rely on their education or the status of their doctorate. We must prove that we’re capable of delivering a higher level of care. Novel pharmacy tools like those developed at ScriptPro focus on advanced clinical services. While pharmacists accept a higher duty, new tools can help deliver care and demonstrate their impact. Strong pharmacists make a strong industry. While the state of pharmacy is solid, pharmacists can continue to strengthen it through advancement of their tools, the scope of their responsibilities, and the continued establishment of their place within the medical community. —Chris Fitzmaurice, director of industry data resources at ScriptPro

What if?

I’ve always liked the George Bernard Shaw quote that Ted Kennedy read at his brother Bobby’s funeral: “Some men see things as they are and ask, ‘Why?’ I Fred Mayer dream things that could be and ask, ‘Why not?’” When we look at the state of pharmacy in the United States today, we see enormous, amazing potential. Pharmacists work in more locations than ever before. Especially in population centers, most residents are only a short ride from a pharmacy. Because we are closer to more people, we are in a better position to truly help and support them. And that help can easily extend beyond safeguarding their health via conscientious

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PHARMACY | VOICES OF THE INDUSTRY filling of prescriptions. We are trained and capable of doing so much more. As the political healthcare debate rages on, we’ve learned that Americans are far from the healthiest people on the planet. And many of the “first-world” problems that cause illness and compromise our quality of life are problems pharmacists can help solve. We are now embedded in more numerous communities. Just as law enforcement is adopting “community policing,” we can approach our work as community pharmacists.

Obesity

Obesity is perhaps our most dangerous health problem. It has been wonderful to see fresh, healthy food featured in some Walgreens stores located in so-called “food deserts,” where grocery stores are less accessible. In that same vein, pharmacists can counsel patients, especially diabetics, about the benefits of healthy eating and the ease of forming better dietary habits. Pharmacists also could create partnerships with local gyms and fitness centers, and even organize lunchtime walking groups. These activities cost little or nothing, and can save lives.

Heart Disease

Pharmacists can ensure patients understand their conditions, the role their medications play, and their own responsibilities to get and stay healthy. When people receive non-accusatory information and advice from a medical professional right in their own neighborhood, at no extra cost, they just might think about it. Plus, they should be encouraged to ask questions and report progress, which we should applaud.

Cancer

Especially with pharmaceutical advertising on television, many are confused about cancer treatments. This provides an excellent opportunity for pharmacists to help demystify options for patients when they are at their most vulnerable. Of course, I don’t mean recommending any course of treatment or medication. Just answering appropriate questions, explaining how different therapies work, and suggesting questions for the primary healthcare provider can help

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someone feel more confident and less alone. All of these suggestions sound great, but what about the hard realities? Yes, we are in many more locations and in many more communities, but pharmacists also are under more pressure than ever to churn out more prescriptions at faster rates and higher volumes. It is a source of great pain to individuals and the profession that error numbers are growing due to inadequate staffing and pressure to increase the numbers of prescriptions filled at each shift. My colleague and friend, Dan Hussar, writes frequently about the need for pharmacists to band together to improve both working conditions and patient outcomes. I wholeheartedly endorse that idea. I also believe, from my many years in both pharmacy and public health, that the personal attitudes we bring to work each day are a strong factor in how we serve our customers. If we see ourselves as healthcare providers, we will function that way. When we believe we can positively affect changes for our patients and our communities, we will do so. When we understand how easily we can be health advocates, in small and large ways, that’s what we will become. I’ll keep on fighting the good fight, and I hope you’ll join me. Together we can make meaningful differences every day. —Fred Mayer, CEO of Pharmacist Planning Services

There is No Silver Bullet for Patient Nonadherence

When Unifine Pentips Plus launched in the U.S. market, we were one of a few manufacturers leading the dialogue on patient adherence. Through thoughtful design feaCasey Pflieger tures that addressed injection therapy obstacles, Owen Mumford brought to market a product that made injection therapy easier, safer and more convenient. In doing so, patients were more likely to comply with a healthy injection routine. In 2019, it is gratifying and exciting to see patient adherence take center stage.

There is now universal acceptance that improving patient adherence is a strategy we should all endeavor to improve upon. Patients who adhere to their treatment regimens live better lives with improved outcomes, while also reducing systemic healthcare costs. In looking strictly at diabetes care, the opportunity is profound. Patients who are compliant with their treatment regimens are less likely to be hospitalized for severe hyperglycemic and hypoglycemic episodes, and the complications from diabetes comorbidities also are diminished. These days, it seems everyone is jumping on the patient adherence bandwagon, offering up sleek, data-driven solutions guaranteed to drive compliance. While it is true that data can be harnessed to drive compliance, we must be wary of how it is used. Automated messaging alone can create noise that is easily tuned out over time. As our lives are inundated with increasing notifications and messages, human interactions become the most effective means of breaking through the clutter. Like most things in health care, solving the compliance jigsaw puzzle is complex. Patient adherence demands a multifaceted approach, and the human element remains the most complex part of the compliance equation. People stop or delay taking medication for different reasons. Some may be forgetful and require a gentle reminder, and for others cost plays a primary driver. Many may not comprehend the gravity of their condition and don’t take adherence seriously — and lack of convenience, transportation or access to products may also represent barriers. No algorithms or AI currently exist that can address all of these factors on their own. This is why the pharmacist has a pivotal, indispensable role to play. Pharmacists uniquely are equipped with knowledge around disease states and treatments, can provide cost transparency and alternatives, and can guide patients toward products that help address compliance barriers. Data is best used to supplement or enhance one-on-one dialogue, but it isn’t by itself a silver bullet. —Casey Pflieger, director of North American marketing at Owen Mumford dsn

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PHARMACY | REX AWARDS 2019: GENERICS

Ahead of the Curve Drug Store News recognizes standout manufacturers in generics By Sandra Levy

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ho are the stars of the generics industry? They are the companies that truly are making a difference in health care, helping consumers save money and giving retailers another option to offer their shoppers. According to the Association for Accessible Medicine’s 2018 Generic Drug Access & Savings Report, in 2017, generics generated a total of $265 billion in savings. This month, Drug Store News recognizes the cream of the crop of the generics industry with our Retail Excellence, or REX, Awards. The winning companies were selected for their excellence through these highly competitive times. These are companies that go the extra mile for their customers and they also unquestionably are leaders in innovation. Here are the 2019 REX Awards winners for the generics category:

ALEMBIC PHARMACEUTICALS Bridgewater, N.J.–based Alembic Pharmaceuticals is a subsidiary of the oldest pharmaceutical company in India. Established in 1907 and employing more than 8,000 people, Alembic’s parent company supplies products to more than 90 countries. Armando Kellum, vice president of sales and marketing, described Alembic as “a vertically integrated organization with expertise spanning across the entire pharmaceuticals value chain, including research and development, manufacturing, and marketing of finished dosage formulations, and active pharmaceutical ingredients, or API, and intermediates.”

Alembic recently received its first approvals for drug dosage forms for dermatology and ophthalmics products. “The company invested over 13% of company-wide sales back into R&D, with 90% plus of that dedicated for the U.S. market,” Kellum said. Since October 2015, Alembic has launched more than 45 product families and 200 SKUs in the United States. This year, it expects to launch more than 10 new domestic products. “Alembic is committed to differentiating itself in one key category: supply. Alembic strives to have 90-plus days of inventory in stock to cover current and potential needs of our customers. We strive to maintain very high service levels for committed customers, even if this means declining new business. Supply consistency and reliability form the basis of strong relationships with our customers, and consistency

for healthcare providers and ultimately patients,” Kellum said.

AMNEAL PHARMACEUTICALS In 2002, Bridgewater, N.J.-based Amneal was founded by Chirag and Chintu Patel, who continue to serve as co-chairmen of the company’s board. Since then, Amneal has grown organically and through mergers and acquisitions to become one of the leading U.S. generic pharmaceutical companies. The company markets a portfolio of approximately 200 generic product families, including complex dosage forms in a broad range of therapeutic areas. The company

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PHARMACY | REX AWARDS 2019: GENERICS also markets a portfolio of branded pharmaceutical products. Amneal recently launched generic Exelon Patch. “The product is Amneal’s first transdermal product, and demonstrates the company’s commitment to develop and bring to market complex generic products. In its specialty business, IPX203 — an investigational drug being studied for the treatment of Parkinson’s disease — has advanced with the dosing of the first patients in a Phase III clinical trial,” said Andy Boyer, executive vice president of commercial operations. Amneal has completed the renovation and expansion of its Brookhaven, N.Y. production facility, allowing for additional capacity. It also completed construction of a new 80,000-sq.-ft. distribution facility in Glasgow, Ky. In 2018, Amneal had 62 abbreviated new drug application approvals, 10 tentative approvals and 42 new products launched. “Thirty-seven percent of the company’s new product launches were from injectable, topical or liquid products, further diversifying our portfolio of more than 200 generic products,” Boyer said.

Anda president Chip Phillips pointed out that the company remains committed to being the trustworthy and flexible resource that customers can rely on to “get what they need, when they need it.” “Our most recent solutions are capable of supporting the primary and secondary needs of our customers in this ever-changing industry,” Phillips said. “Good examples of this include our new website, which recently launched, Automated Secondary program, and Customer Dedicated Inventory, or CDI, program. All of these solutions can be customized, which is what enables us to meet the unique needs of each customer.” The company’s CDI program positions Anda as an extension of its customers’ distribution centers. “We systematically guarantee inventory, so that your product is for your use only,” he said. “At Anda, our people are what makes us unique. Our goal is to provide exceptional service to our customer and vendor partners. We hire remarkable people who are committed to exceed our customer’s expectations. We work closely with our customers and our vendors to understand their needs so together, we can develop meaningful, customizable solutions to support them.”

40 molecules, which, when considering all strengths and sizes, accounts for about 150 SKUs,” Ascend’s executive vice president John Dillaway said. Ascend has significant capacity with two existing manufacturing campuses in India dedicated to the U.S. market, and two facilities in the United States. The company’s research and development team are comprised of more than 500 scientists, of whom more than 100 have doctoral degrees. Dillaway said Ascend has built a significant infrastructure between its manufacturing capabilities and its experienced team of account executives, becoming well known for its ability to supply, and the quality of information and partnership it brings to market. Ascend has just completed a large physical expansion to its two existing Indian manufacturing campuses, doubling its current manufacturing capacity. It also has broken ground on the third manufacturing campus in India dedicated to the U.S. market — seventh overall for Alkem. “When complete in 2020, this new facility will double again our capacity, leaving us in a good position to not only stay in our existing molecules, but to handle the over 50 more we have submitted to the FDA and [are] awaiting approval,” Dillaway said.

ANDA Weston Fla.-based Anda was established more than 25 years ago as a niche distribution service of generic pharmaceuticals to U.S. retail independent pharmacies. Over the years, the company developed the product portfolio and distribution capabilities to support the needs of customers, ranging from small independent retail pharmacies in rural areas, long-term care pharmacies and regional chains to national chains. Today, Anda is one of the leading pharmaceutical distributors within the United States, Puerto Rico and the U.S. Virgin Islands, servicing customers that span across all trade classes within health care. They carry items from nearly 400 manufacturers, including brand, generic and specialty pharmaceuticals; as well as vaccines, injectables, diagnostic tests, medical and surgical supplies, OTCs, vitamins and pet medications.

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ASCEND LABS Ascend Labs, based in Parsippany, N.J., launched its label into the market in 2008 with three products. In 2010, Ascend sold a minority interest in itself to Alkem in exchange for marketing exclusivity on any U.S. approvals that Alkem obtained. By 2012, Ascend sold its remaining shares, and today is a wholly-owned subsidiary of Alkem, which is a $1 billion company with seven manufacturing campuses in India and several in the United States, including an API facility in California and a finished dose facility in St. Louis. While originally targeting easy-tomanufacture molecules, Ascend targets more difficult molecules to distinguish itself from competitors. “Ascend markets over

AUROBINDO PHARMA Founded more than 30 years ago, East Windsor, N.J.-based Aurobindo Pharma was created by Ramprasad Reddy, Nityananda Reddy, and a small group of scientists and engineers. The company began operations with a single manufacturing unit specializing in semisynthetic penicillin. “Aurobindo has managed to grow its business rapidly, both organically and by way of strategic acquisitions, to be one of the leading companies in the industry,” said Paul McMahon, vice president of commercial operations.

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FOCUSED ON THE FUTURE OF GENERICS

Ahead of the curve in quality and value. ®

Camber Pharmaceuticals, Inc. (732) 529-0430 camberpharma.com

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PHARMACY | REX AWARDS 2019: GENERICS Aurobindo continues to focus on its core strengths of vertical integration and largescale manufacturing. The company has been among the generic firms receiving the highest number of product approvals for several years, and currently ranks third in terms of total volume in the U.S. market. Aurobindo currently has more than 500 ANDAs filed with the FDA and more than 300 final approvals, McMahon said. Aurobindo recently commercialized its newest large-scale manufacturing facility, unit-10, bolstering its portfolio of largescale manufacturing infrastructure. It has expanded through various acquisitions both in the United States and European Union, and also has expanded into new therapeutic categories and delivery methods. The company recently reached a definitive agreement to acquire Sandoz’s U.S. oral solids and dermatology business units. “We look forward to delivering the benefits of this transaction to all our stakeholders, including employees, patients, customers and healthcare providers across the United States,” said Aurobindo managing director Govind Narayanan.

CAMBER PHARMACEUTICALS Piscataway, N.J.-based Camber Pharmaceuticals’ goal is balancing supply and demand from pipeline to patient. “For over 10 years, Camber Pharmaceuticals has been one of the fastestgrowing generics companies in the U.S. Camber’s commitment is to bring the highest quality generic pharmaceuticals to the market, and to improve quality of life through cost-effective medications,” said company president Kon Ostaficiuk. Ostaficiuk said that Camber has numerous product launches scheduled for the next 12 months, and that the company is known for exceptional customer service and its dedicated team of seasoned sales professionals with deep experience in the generics industry.

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Camber’s goals include strengthening strategic partnership alliances; anticipating and responding to customer needs; maintaining transparency in all areas of business; committing to a reliable and high-quality supply of products; and ramping up tech transfers between facilities. With well over 1 million sq. ft. of new manufacturing and warehouse space added in India and its new U.S. facilities, Camber now has more than 2.5 million sq. ft. solely dedicated to the U.S. market. “We are more than 90% vertically integrated on all our products. In addition to our new manufacturing facilities, Camber’s new corporate headquarters and expanded warehouse space are currently under construction,” Ostaficiuk said. “This more than doubles our current warehouse space, which allows us to maintain a robust inventory of the products our customers need most.” Camber’s current portfolio includes 54 products (152 SKUs), 46 of which are manufactured by Hetero Drugs and eight manufactured by Ascent Pharmaceuticals. Camber’s future pipeline includes 55 ANDAs filed or under review, and 15-plus ANDAs projected for release in 2019. “Today, our parent company, Hetero Drugs, is the largest privately-held pharmaceutical company in India and a world leader in API production, with strong global presence in over 120 countries. Saving lives is their passion, and they continue to help shape a healthier world through affordable medications as they have for over 25 years,” Ostaficiuk said.

cardiovascular disease that was unavailable in India until 1985. By 1990, Dr. Reddy’s became the first Indian pharma company to export norfloxacin and ciprofloxacin to Europe and Asia. Marc Kikuchi, CEO and head of North America generics, said that through its three businesses — pharmaceutical services and active ingredients, global generics and proprietary products — Dr. Reddy’s offers a portfolio of products and services, including APIs, custom pharmaceutical services, generics, biosimilars, and differentiated formulations. The categories of medication the company offers, which include gastrointestinal, cardiovascular, pain management, oncology, anti-infectives, pediatrics and dermatology, are available in a variety of dosage forms, including tablets, capsules, injectables and topical creams. Dr. Reddy’s in the United States offers more than 80 SKUs in more than 350 dosing presentations. The company’s pipeline includes 113 pending applications, including 110 ANDAs and three New Drug Applications . Key products include metoprolol, metoprolol ER, atorvastatin, zoledronic acid, azacitidine, decitabine, valganciclovir, and, most recently, buprenorphine and naloxone sublingual film.

EDENBRIDGE PHARMACEUTICALS

DR. REDDY’S LABS Established in 1984 by scientist and entrepreneur K. Anji Reddy, Dr. Reddy’s Labs, based in Princeton, N.J., is an integrated pharmaceutical company, focused on affordable and innovative medicines. With a vision of making medicines accessible to the millions in India, Anji Reddy developed the company’s first API ingredient, methyldopa, an important drug for the treatment of hypertension and

Parsippany, N.J.-based Edenbridge Pharmaceuticals is a specialty pharmaceutical company focused on identifying, developing and marketing pharmaceuticals. “Our approach is to work with best-inclass and like-minded industry partners to deliver our products to physicians and patients everywhere,” said Victor Borelli, Edenbridge’s senior vice president of sales and marketing. Founded in 2008, the company launched its first product in 2010 and currently sells its commercial products through every major channel of the U.S. prescription

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pharmaceutical supply chain. “Seven of our products have launched with Edenbridge as the first generic or alternative supplier,” Borelli said. In 2018, Edenbridge moved into a newlydesigned facility to support its growth. “We have more than doubled our headcount over the past two years with experienced talent and expect to grow by an additional 50% over the next year,” Borelli said. Edenbridge is poised for aggressive growth with a pipeline that includes complex and limited-competition products. “Our focus is on being the best partner possible to all parties in the supply chain from suppliers to patients,” Borellis said. “It drives everything we do, from ensuring supply, maintaining deep customer relationships, and continuing to develop and market high quality products.”

INGENUS PHARMACEUTICALS Founded in 2010, Orlando, Fla.-based Ingenus Pharmaceuticals’ mantra is, “We’re making a difference, one product at a time.” Armed with a team of more than 140 developers and scientists, Ingenus is poised to file 25 ANDAs per year. Ingenus focuses on transdermal, parenteral, semi-solids, injectable, topical foams and sprays, and extended-release products. By developing and manufacturing products across a multitude of dosage forms, Ingenus is focused on delivering innovative products that are manufactured to the highest standards, improving access to consumers and lowering overall costs across the healthcare continuum.

LUPIN PHARMACEUTICALS Lupin Pharmaceuticals, based in Baltimore, currently is the third-largest pharmaceutical

company in unbranded and branded generics prescriptions dispensed in the United States, with 6.1% generic market share. Lupin’s journey began in 2003 with three Baltimore-based employees and one U.S. generic product approval. The company markets a total of 168 generic products and has established a leading position in the cephalosporin, ACE-inhibitor, and cholesterol-reducing product categories. “Lupin has played to its strengths, focusing on increasing its market shares not only for new product launches, but by executing well to grow market shares for its existing products,” said Bob Hoffman, executive vice president of generics. As of the end of 2018, Lupin is the market share leader in 68 generic products and among the top three in 120 products in the United States, Hoffman said. “The majority of Lupin’s products are vertically integrated, which ensures quality control throughout each step of product development and manufacturing. This gives Lupin an unparalleled advantage over its competitors, as it is able to control its supply chain while offering competitive pricing,” Hoffman said. Lupin aims to expand its pipeline to offer medications in new therapeutic areas, such as dermatology, pediatrics, women’s health, inhalation and complex injectables.

SUN PHARMA Founded in 1983 in India, Sun Pharma, which is based in Hawthorne, N.Y., has been in the United States since 1996. Sun Pharma has created a pipeline of branded products in dermatology, ophthalmology and oncology segments. “Our global presence is supported by over 40 manufacturing facilities spread across six continents, several R&D centers and a multicultural workforce, comprising more than 50 nationalities,” said Anand

Shah, senior director of pricing and marketing at Sun Pharma. “Being a vertically integrated company, we have the capabilities to develop and manufacture products in the United States, as well as at other locations across the world.,” Shah said. “We are the largest generic dermatology company and amongst the top five branded dermatology companies in the United States.” An example of the company’s research capabilities is evidenced by the Food and Drug Administration permitting the company to make doxorubicin HCl liposome available to patients when there was a product shortage.

UPSHER-SMITH LABS Maple Grove, Minn.-based Upsher-Smith was founded in 1919 by an Englishman named Fredrick Alfred Upsher Smith, who sold a form of digitalis. Upsher-Smith president and CEO Rusty Field emphasized that from its inception, Upsher-Smith placed a premium on serving patients and pharmacists with a strong focus on quality, honesty and ethics. Since being acquired in 2017 by Sawai, a publicly-traded Japanese pharmaceutical company, Upsher-Smith has continued to innovate by diversifying and expanding its portfolio of products. In fiscal year 2018, Upsher-Smith brought 75% of its ANDAs to market — a move that significantly expanded and diversified its product portfolio. “What sets us apart from our competitors, however, is our commitment to sustainable growth to drive more value to patients, as well as our ability to provide high-level customer service, foster strong industry relationships and deliver a consistent product supply,” Field said. “In 2019, Upsher-Smith will celebrate its centennial. Even as we focus on portfolio expansion and diversification, we know we must hold tight to the core values that define us.” dsn

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HEALTH | SEXUAL WELLNESS

Sexual Wellness Awareness on the Rise Retailers can feature products with natural ingredients and focus on women and millennials By Nora Caley

S

ex sells and, yes folks, it is selling more and more at mass retailers these days. As the sexual wellness category expands to include not only contraceptives and family planning, but also products related to comfort, pleasure and self-care, suppliers are developing items that answer consumer demands for effective products made with natural ingredients that can help retailers update their sets. The result is that consumers are looking to mass retailers to carry a healthy assortment of products in the category, and the once-embarrassing section suddenly has turned into the talk of the store for many merchants. Many said that talk is resulting in big sales and profits for those merchants willing to give the category an ample amount of space. Yet retailers need to pay attention to the trends with the category. As with many categories in the store, shoppers are reading labels and carefully looking at what they buy. “Consumers are far more educated than ever before and have become very ingredient conscious when shopping for sexual wellness products,” said Taylor Means, vice president of sales at Las Vegasbased Trigg Labs. “Paraben-free, glycerinfree, hypoallergenic are all becoming standards in the personal product category due to this demand from the customers.” People are learning more about their bodies, Means said, and driving the industry to use ingredients that are of higher quality. Retailers can benefit from this shift by making sure their staffs are educated on the products. “For some consumers, it may be their first purchase, or maybe they’re unsure of which type of product would best suit their needs,” Means said. “This can be embarrassing and a sensitive topic, but a well-trained associate can point them in the

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right direction and make their purchase feel far more comfortable.” Trigg Labs makes the Wet line of lubricants, and recently launched the Wet Warming Desserts lineup and Wet Vibe Wash for adult toys. Consumers’ quest for education has shaped how they shop for sexual wellness products. “In the past, consumers were reactionary, and they would purchase to satisfy a need,” said Tracy Meyer, vice president of operations and marketing at Fortera

Nutra Solutions, based in Morganville, N.J. “Today, they are proactive about their health. They are more conscious that a healthy lifestyle is no longer defined just with fitness and diet, but also with mental health and sexual health.” Part of that shift is due to societal changes. People are busy, and they have many demands for time and attention from their careers, partners and family. They also have the Internet and social media to help them

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HEALTH | SEXUAL WELLNESS learn about new products. If consumers have that much information at their fingertips, then retailers should keep current with what these shoppers find online and want to see in store. “A lot of these big retailers are really trusted,” Meyer said. “People want to go into the store, see the product in their hands and look at the packaging, so it’s important for retailers to keep current.” Keeping current includes updating their sets to feature more products targeted to women. Fortera Nutra Solutions, which makes the male enhancement supplement Red Fortera, recently announced the launch of Diamond Fortera, a supplement meant to enhance women’s libido and pleasure on demand. The supplement is to be taken 30 minutes before intimacy. “Women have really been wanting something for themselves,” Meyer said. “There has been a lot of focus on the man, and now women have something specifically designed for them.” Retailers often merchandise Red Fortera

and Diamond Fortera in both the family planning section and the vitamins and supplements aisle. “We tend to do well in both,” Meyer said.

Focusing on Women

As with Fortera Nutra Solutions, other manufacturers agree that a category refresh would entail bringing in more products for women. “There is much more awareness of what women’s issues are,” said Chia Chia Sun, founder of Toronto-based Damiva. “Related to that is the fact that as the younger generation is coming up, they essentially have fewer taboos. They have no embarrassment, they have no awkwardness.” In addition to being more willing to discuss sexual wellness, millennial shoppers also are looking

for natural products. “Women who care a lot about self-care have the same sort of values in the sense of sustainability and how this impacts our world around us,” Sun said. “It’s not just selfcare, but also about the holistic view. I think that’s very important for manufacturers and brands moving forward.” Damiva manufactures five feminine care and body products: two for genitals, two for breasts and one sensual massage oil with hemp/CBD. The genital products are Mae for vaginal dryness and Cleo for labial dryness. The company is planning two clinical trials this year for lichen sclerosus, white patches on genitalia, and hidradenitis suppurativa, genital abscesses. A pipeline of products will target new mothers, as well

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as niche conditions. “There is a need to change the dialogue around embarrassing conditions,” Sun said. More women are paying attention to the science behind sexual wellness products. “It’s clear that consumers of this category are waking up about the ingredient base in products,” said Wendy Strgar, CEO and founder of Eugene, Ore.-based Good Clean Love. “There’s been a lot of scientific research that has gone on over the last five years.” One important concept in personal lubricants is osmolality, which refers to the concentration of molecular ingredients in a product. Recent studies have examined the effects of high-osmolality lubricants that contain glycerol, propylene glycol and other compounds that can cause epithelial cell damage. “If you’re using a product that is hyperosmolar, that are heavier than our own human tissue, basically all the fluids from those cells flow out,” Strgar said.

“What happens is you slough off those epithelial layers, and the vagina becomes more susceptible to bacterial vaginosis, which is a common infection.” The solution, she said, is to use natural and organic products that do not contain these harmful ingredients. Good Clean Love makes such products as BioNude Ultra Sensitive personal lubricant and, coming soon, BioNourish Vaginal Moisturizer with Hyaluronic Acid, and BioGenesis Fertility Lubricant. The new fertility product works with the natural pH level of the vagina. “Rather than pushing the woman’s pH to seven, the vagina is more healthy at 3.5 or 4.0,” Strgar said. “It’s just going to be much better for women conceiving.”

Healthy Sales

Women’s sexual health is one of the areas in which sales are growing at a healthy rate. According to IRI, a Chicago-based market research firm, for the 52 weeks ended Feb.

Consumer attitudes toward safer sex and condom use are changing, so the industry needs to adapt to meet these consumer needs. 24, sales of sexual health products in total U.S. multi-outlet — grocery, drug, mass market, military and select club and dollar stores — totaled more than $1.03 billion, an increase of 3.4% compared with the same period the previous year. Sales of female contraceptives totaled more than $408.9 million, an increase of 10%. Sales of sexual enhancement devices totaled more than $32.7 million, an increase of 13.2%. Meanwhile sales of male contraceptives

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HEALTH | SEXUAL WELLNESS the correct size and customize the fit, and they can buy the condoms online from retailers’ websites. “Walmart was the first to jump on board,” Maraio said. “A lot of retailers are interested in getting the product in stores. The difficulty is a lot of stores don’t have 60 spots for condoms.”

The Future Looks Good

decreased 2.3% to $349.3 million, while sales of personal lubricants were essentially flat, up 0.7% to just under $243.5 million. “The condom category overall is declining,” said Meika Hollender, co-founder and CEO of New York-based Sustain Natural. “Retailers need to partner with brands that are growing the condom category in order to combat this. Additionally, lubricants have become more and more popular among millennials who are demanding natural alternatives versus what’s been on the market for decades.” The company sells sustainability-focused tampons, condoms, lubricants and other sexual wellness and feminine care products. “By focusing on women and offering the most natural and sustainable condom on the market, Sustain brings incremental sales where we are in stores, helping combat the category trends,” Hollender said. “Our organic lubricant and period products are where the market is headed, which is why we’ve been so successful to date.”

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Innovation

New products can help revitalize these stalled segments. “Category-wide, a lot of retailers are looking for innovation, not duplication,” said Jared Maraio, senior director of brand strategy at Boston-based Global Protection. “A lot of products out on the shelf are pretty similar. Category sales are not blockbuster right now.” Consumer attitudes toward safer sex and condom use are changing, Maraio said, so the industry needs to adapt to meet these consumer needs. “Our entire purpose as a company is to make people more comfortable talking about condoms,” he said. “From our perspective, when we develop products, we try to develop items that go out and educate the public about the importance of condom use and speak to concerns that consumers have.” The concerns are about fit and comfort, so Global Protection’s new condom line, MyOne, has 60 different sizes to answer that demand. Consumers go online to determine

“Millenials are more comfortable with the notion of self-care,” said Jamie Leventhal, CEO of Clio, a Newton, Mass.-based company marketing the plusOne brand of sexual devices. “This is an underserved market at mass retail, with most sales taking place online or at prestige retailers. It’s time for these items to be available at mass.” The trick for retailers and manufacturers will be appealing to a generation that uses condoms less frequently than others. According to a recent survey from Lifestyles’ Skyn condoms brand, while 65% of Gen Z respondents said they used a condom all or some of the time, only 54% of millennials responded the same. These self-reported practices come as the Centers for Disease Control and Prevention report about 20 million new cases of sexually transmitted infections each year in the United States, with roughly half affecting people between the ages of 15 and 24 years old. Helping consumers be in the know can help. In an effort to share relevant information about condom use to young adults, Okamoto USA, which makes thin condoms called 0.04, embarked on a long-term initiative that included one-on-one consumer interviews to find out about sex education levels, awareness about contraceptive choices, accessibility, pricing, naming, pack design, and what is missing in sexual health today. “The results of that study, coupled with a plan for content and messaging, will launch this summer and is expected to change the way we talk about condoms and relationships, and respond in a relevant way to millennials and Gen Z that will change behavior and contemporize the condom category,” said an Okamoto spokesperson. “The objective is to reduce the number of new STIs that seem to be escalating with each new national report.” dsn

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HEALTH | SEXUAL WELLNESS PRODUCTS Damiva Offers Two Items Damiva is touting its lineup of natural health and beauty products for women. The company’s offerings include Mae, a vaginal suppository lubricant that restores vaginal moisture, and Cleo, a labial skin moisturizer. The vaginal moisturizer, designed for women who suffer from dryness after menopause, contains emollient plant butters, not water or alcohol. Cleo labial moisturizer contains kokum butter, vitamin E, sea buckthorn extract, shea oil and cocoa butter. All the products are vegan and certified cruelty-free by Leaping Bunny.

Trigg Labs Extends Line Trigg Labs released the Wet Warming Desserts line of lubricants. The flavors include Slow Baked Hazelnut Soufflè, Fresh Delicious Donuts, Baked Gooey Chocolate Chip Cookie, Warm Homemade Cinnamon Roll, and Oven Baked Apple Pie À La Mode. Sugar-free, nonstaining, and latex condomcompatible, these lubricants gently heat, so they can be used for massages as well. The company also launched Wet Vibe Wash, a nongreasy, alcohol-free gentle cleanser for adult toys. It is triclosan-free and safe for all adult toy materials, including rubber, silicone, latex, realistic materials, jelly rubber, plastic, metal and glass.

Okamoto Overhauls Brand Okamoto USA, located in Sandusky, Ohio, makes a range of latex condoms, including 0.04, which the company said are half as thin as comparable condoms, and are made of a high-tech latex called Sheerlon. The brand is undergoing an overhaul, including the introduction of new, thinner condoms and styles, and new packaging. The products, designed to appeal to millennials and Gen Z, will hit store shelves in the summer and will be supported with programs that resonate with this target demographic. Company officials said the new designs will launch alongside an innovative approach to social media and online promotion meant to reach condom purchasers with information regarding relationships, dating and sexual wellness that is relevant to young adults today.

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Good Clean Love Adds BioNude Products Good Clean Love, which is based in Eugene, Ore., manufactures BioNude Ultra Sensitive Natural Moisturizing Personal Lubricant. The product has patented Bio Match technology, which the company said could help protect the sensitive vaginal ecosystem, while providing maximum natural glide. BioNude Ultra Sensitive Natural Moisturizing Personal Lubricant, formulated to emulate the woman’s body’s own natural lubrication, uses plant cellulose as a thickening agent. BioNude does not contain any parabens and is 100% vegan. The company also soon will launch BioNourish Vaginal Moisturizer with Hyaluronic Acid and BioGenesis Fertility Lubricant.

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LAST WORD

Taking the Seams Out of Omnichannel Rethinking strategies to boost customer experience By David Orgel

T David Orgel is an awardwinning business journalist, industry expert and speaker. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.

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he business world has a language all its own, and some of its words are problematic. Take “omnichannel” for example. The word is fine on its face. It’s fairly understood in retail references. It indicates activities that span online, brick-and-mortar and other channels. Retailers are investing large sums to accelerate these strategies. So why is this word a problem? It’s because omnichannel defines retail strictly from an industry — not a consumer — viewpoint. It underscores how the industry thinks and classifies. In fact, the word “channel” itself has a long history in retail. It’s been used to describe different types of retailers like grocery, drug and mass. Again, all of this is about classifications. It has nothing to do with the actual customer experience. Consumers, on the other hand, just want retailers to serve their needs with an experience that’s as satisfying and efficient as possible. They don’t recognize all the classifications. Many want a retailer to know who they are wherever they shop. This means they require a seamless experience across so-called channels. But that’s hard because channels do have seams. This means omnichannel will never fully describe the kind of experiences consumers want. That said, omnichannel is universally understood and may be the best word we have at present. Channels will be around for a while. Retailers need to make customer experiences better and more consistent across their sprawling operations. This point came up recently at the NGA Show, a retail forum geared to independent grocers in San Diego. “What are those stories you can bring to life in your store that no one else can?” Suri Mishra, vice president of services at Merchants Distributors, asked during an NGA Show presentation. “How can you bring these stories to life across all channels?” Mishra’s presentation, “Creating Seamless Omnichannel Experiences,” offered solid guidance aimed at achieving this. Among the ideas:

Make sure the retail message is clear. Make sure it’s the same message for e-commerce, social media and in store. Ensure that employees are living the brand and knowing what it stands for. Here’s my favorite piece of advice: “Don’t add a channel just because it feels cool.” While it’s important to deliver messages that are consistent across channels, sometimes the specifics need to play out differently in different places. This is especially true when retailers want to take advantage of experiences that only can be accomplished in a particular environment, such as a physical store. “We have a cheese monger, an artisan bread salesman, and seafood and meat specialists,” said Bob Harmon, vice president for the customer at Utah-based food retailer Harmon City, during an NGA Show presentation. “Customers are looking for these things. They want the interactions. These will always be differentiators.” Returning to the word omnichannel, one of the ideas offered at the Food Marketing Institute Midwinter Executive Conference in January came from A.T. Kearney partner Randy Burt, who suggested viewing the customer as a channel. I asked Randy to explain what this means. “It means understanding how to connect with consumers where they are,” he said. “All those access points are available to them, but they are really thinking about their needs, whether it’s convenience, value, variety or price. So this is about being consumer-centric. Your core shopper is evolving, and you need to shape your offering around this.” I believe Randy is talking about the imperative of building a retailer’s compass around the shopper. This may sound simple when said, but it’s complex in practice, especially in this fast-changing retail environment. So regardless of what you call it, omnichannel or something else, it’s important for retailers to go down this road. It won’t eliminate all the seams, but it definitely will help smooth things out considerably. dsn

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Drug Store News - April 2019  

Drug Store News - April 2019