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APRIL 2020


APRIL 2020

Pharmacy: State of the Industry P. 64

Drug and food retailers take a leading role in the battle against the coronavirus pandemic


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Vol. 42 No. 4 DrugStoreNews.com

FEATURES 8

COLUMNS

Industry News

6 Editor’s Note

20 Pandemic Consumer Behavior

36 Counter Talk

A Path to Purchase Institute survey sheds light on how COVID-19 has affected shoppers’ behavior

with Direct Source’s Brad Fick

84 Counter Talk with Tabula Rasa HealthCare’s Sandra Leal

28 Retailer Update: Rite Aid Rite Aid is moving forward with a plan for a new forward-looking store format and revamped pharmacy workflow

110 Last Word with David Orgel Consulting’s David Orgel

32 Products to Watch

PHARMACY

34 Selfcare Roadmap Insights

64 State of the Industry

Anxiety shopper insight powered by GMDC | Retail Tomorrow’s and HRG’s Selfcare Roadmap Insights tool

46

38 Focus On: Simply Good Foods 40 CBD News New products and updates on the category

How drug and food retailers are leading the charge in the battle against the COVID-19 pandemic Organizations and companies share perspectives on COVID-19

86 VMS

92 VMS New Products 94 Eye and Ear Care

28

No longer just categories shopped when consumers are in dire straits, eye and ear care turn an eye toward prevention and maintenance

38

SOCIAL

100 News

INSIDE BEAUTY

Facebook.com/ DrugStoreNews Twitter.com/ DrugStoreNews

HEALTH With the ongoing pandemic, immunity takes a front seat, but companies continue to innovate

46 Cover Story: Retailers Lead the Way Amid the Pandemic

56 Crisis Talk Columns

Executives across the industry — from automation to pharma and technology — weigh in on where pharmacy is and where they see it going

102 Voices of the Industry

86

Beauty executives weigh in on how COVID-19 will impact the category and force manufacturers and retailers to adapt

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. 42, No. 4, April 2020. Copyright © 2020 by EnsembleIQ. All rights reserved.

DRUGSTORENEWS.COM April 2020

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EDITOR’S NOTE

Rising to the Challenge Retailers — from executives to store-level personnel — are stepping up to help consumers get what they need during the early days of the coronavirus pandemic By Seth Mendelson

T

his might just go down as mass retail’s finest moment. As the coronavirus quickly overwhelmed large swaths of the country in midMarch, the mass retail industry — from suppliers through retailers — might have bent a little, but it never broke. In fact, when we look back at this time of confusion and concern due to the crisis, I have to believe that many will thank the mass retail industry for helping to calm consumers’ nerves and alleviate their concerns that there was simply not Seth Mendelson going to be enough products — whether it was toilet paper, Editor in Chief/ Associate Publisher canned goods or medicines — to satisfy shoppers’ needs. Also, people will remember that this was all done while most merchants still paid a great deal of attention to protecting the health and well-being of their customers and their staffs. Most importantly, the industry — individually and collectively — quickly and effectively developed and instituted programs that made sure there were enough products on store shelves to dissipate any potential consumer panic. Those measures included shortening store hours to efficiently restock shelves and sanitize stores, creating special shopping hours for seniors, installing plastic partitions to protect cashiers, and coming up with programs that prevented hoarding. But there was a lot more that was not as obvious. More and more stories are coming out about how retail workers went to great lengths to serve their customers. Often on their own, many store employees went out of their way to assist consumers who had questions about products, store hours and quick checkouts. There are even stories of workers helping older shoppers with their shopping lists or helping to take bags to their cars. With medical doctors not as available as usual, pharmacists, in particular, are being cited for stepping up and trying to calm consumer fears by answering as many questions as they could about the best way to protect themselves during the pandemic. When this madness finally ends — and the world returns to the new normal — one can only hope that people will remember the great job retailers did to keep America fed and safe. The fact is that retailers are doing a great job, and all of them — from bottom to top — have earned a well-deserved pat on the back from the rest of us. dsn

When this madness finally ends — and the world returns to the new normal — one can only hope that people will remember the great job retailers did to keep America fed and safe.

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An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Senior Vice President, Publisher John Kenlon (516) 650-2064, jkenlon@ensembleiq.com Editor in Chief /Associate Publisher Seth Mendelson (212) 756-5160, smendelson@ensembleiq.com EDITORIAL 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 Steve Dixon (917) 821-9799, sdixon@ensembleiq.com Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Production Manager Jackie Batson (224) 632-8183, jbatson@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 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 $20 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 Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several Senior Vice President, Content Joe Torrito


INDUSTRY NEWS

Truwomen’s Trubars Make Whole Foods Market Debut Denver-based nutrition brand Truwomen, known for its dessert-inspired protein bars, is making its products available to a larger audience. Whole Foods Market will carry the company’s Trubars in several flavors — Oh Oh Cookie Dough, Saltylicious Almond Love, Smother Fudger Peanut Butter and Daydreaming About Donuts. “One of our big goals for Truwomen is to make it easier for shoppers to feel proud about choosing our products and sharing them with others. Whole Foods customers are our target demographic, and we’re looking forward to our retail expansion,” said Stephanie Pyatt and Erica Groussman, founders of Truwomen. “As moms who are always on the go, we couldn’t shake the fact that most snacks either taste good, yet use ingredients we couldn’t pronounce, or they use clean ingredients, but taste like cardboard. We’re taking the guesswork out of choosing between a healthy or indulgent snack.” The bars are vegan, kosher and Non-GMO Project Verified. They also are free of gluten, sugar alcohols, dairy or soy, the company said.

Arm & Hammer Keeps Laundry Clean & Simple Officials at Arm & Hammer think that consumers can get more with less. The brand’s Clean & Simple laundry detergent features six essential ingredients, which is significantly less than the 25 ingredients many other products possess. The detergent is designed to give consumers all the cleaning power they want and need, without unnecessary chemicals. This one-of-a-kind, mainstream laundry detergent is made for those looking for products with fewer ingredients and more transparency, without having to sacrifice on efficacy, price and convenience. Arm & Hammer Clean & Simple is available in a variety of sizes that wash anywhere from 25 to 75 loads of laundry, with price points ranging from $4.99 to $8.99.

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Yuengling Goes Light with Flight D.G. Yuengling & Son has a new light beer making its debut. Flight by Yuengling contains 2.6 g of carbs, 95 calories and 4.2% ABV, the company said. “Recognizing an opportunity in the light beer category, we have been working to deliver an upscale refreshment brand that fits within the active lifestyles of today’s consumers,” Jennifer Yuengling, vice president of operations, said. “Our family brewing business was built on providing consumers with a high quality, great tasting drinking experience for social occasions. We have spent more than a year perfecting Flight by Yuengling, taking the taste of this light beer to new heights, and can’t wait for our fans and light beer drinkers to try it.” The launch is supported by a campaign that features professional soccer player Rose Lavelle and singer Lauren Alaina as brand ambassadors, both of whom embody the spirit of “Raising the Bar” with their drives to pursue their own standards of success and personal growth. Available year-round, the beverage will be sold in 12-oz. bottles across the company’s 22-state footprint, and as a draft in select markets during the second half of the year.


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INDUSTRY NEWS

Debrief Me Offers Reusable Face Masks Debrief Me is responding to consumer needs and demands for face masks during and after the coronavirus pandemic. The Brooklyn, N.Y.-based company, which calls itself the market leader in washable, reusable face masks and sells items in 26 countries, is marketing masks that include two PM2.5 filters that are designed to give further protection against dangerous pollutants and contaminants found in the air. The masks, priced between $14.99 and $24.90 each, come with the two filters. “This is the same carbon filter materials used to make N95 disposable masks,” said Debrief Me CEO Matt Silver. “Masks are the new sunglasses. Everyone wants one right now, and we are leading the charge. Frankly, we saw this crisis coming. More and more people have breathing problems due to allergies or pollutants, and we knew demand for reusable and washable masks would be rising.” Silver is quick to note that his products are not for occupational or surgical use. Still, he is confident that more consumers will look for masks, even after the pandemic concludes, and retailers will have an excellent opportunity to build sales and profits from the category well into the future. “As we come out of this mess, many top scientists are making it clear that people need masks to protect themselves from things as simple as the common cold and other illnesses,” he said. “The masks will protect against things getting into the air where they can stay for a while.” He said the 10-year-old company has spent a lot of money and energy making sure the masks also are attractive and easy to use for consumers. “Everyone wants a mask that is comfortable to wear and is fashionable,” Silver said, noting that the masks are made at three plants in China and in Brooklyn in Food and Drug Administration-registered facilities.

CDMA Donates Gloves to Detroit Hospitals To help combat the severe shortage of protective equipment at local Detroit area hospitals, the Chain Drug Marketing Association donated 45,000 pairs of nitrile exam gloves to two local hospitals, Beaumont and Henry Ford. Each hospital system received 22,500 pairs for the healthcare workers who are on the front lines, working around the clock to battle COVID-19. “We are thankful to have gloves on hand to donate, knowing they will help protect these heroes and the patients and communities they serve,” said Michael Boivin, CDMA president and CEO. CDMA has been providing a wide selection of private-label products for the past 25 years to small and independent drug store chains, pharmacies, convenience stores and grocery stores throughout the United States and Puerto Rico, the Caribbean, and, most recently, Africa. For more information, contact CDMA’s Nicholle Cormier, corporate communications and human resources, at cormier@chaindrug.com.

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INDUSTRY NEWS

Anheuser-Busch’s Brewers Collective Releases Malt Beverage Anheuser-Busch’s craft business unit, Brewers Collective, is entering the malt beverage category with LQD. The beverage line, designed for health-minded consumers who are don’t want to compromise on taste or quality, is brewed by using naturally fermented fruit, the company said. “After brainstorming with brewers from across the 13 craft partners that comprise Brewers Collective, it became apparent there was an opportunity to collaborate on a unique beyond beer offering,” Marcelo “Mika” Michaelis, president of Brewers Collective, said. “With craftsmanship and real ingredients at its core, LQD has provided our brewers with a platform through which they can directly and creatively address consumer needs.” Containing an ABV that ranges from 5.2% to 5.9%, all of LQD’s beverages have fewer than 200 calories, and will be available in four flavors — hard agave limeade, hard passion fruit green tea, hard hibiscus green tea, and hard hibiscus lemonade. Available in individual flavor six-packs and variety tea 12-packs that will retail from $10.99 to $12.99, LQD hits shelves across the United States in select markets.

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April 2020 DRUGSTORENEWS.COM


INDUSTRY NEWS

Cloud Water Adds Sparkle to CBD Cloud Water’s four SKUs of sparkling water offer consumers great taste and 25 mg of CBD in each bottle, which sets the line apart from almost every other beverage in the marketplace. The line features such flavors as Aztec chocolate and strawberry; blackberry, lemon and rosemary; blood orange and coconut; and grapefruit, mint and basil. Products are priced at $78 for a 12-pack and around $7 for an individual 12-oz. container. “Our taste profile is pretty unique,” said Alexandra Galindez, chief marketing officer of the New York-based company. “Our products have a great taste profile and are lightly sweetened with raw honey. We are a premium brand in terms of ingredients and packaging. We are definitely taking the high road with this product and consumers will taste the difference.” Marc Siden, co-founder and CEO of the company, said: “There is a large demand for CBD products in the beverage category. We don’t make any claims, but we have a great following of consumers who enjoy the beverage and feel that the CBD in it is helping them.”

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INDUSTRY NEWS

Hallmark Giving Away Cards to Lift Spirits Hallmark is donating one million cards that people can send to family, friends or anyone in need of some reassurance during these heavy times. Cards for loved ones, neighbors, healthcare workers or senior centers are among the variety available, and the small act of kindness can impact anyone’s day, the Kansas City, Mo.-based company said. Anyone living in the continental United States who is interested in obtaining free cards can go to hallmark.com/CareEnough to sign up and receive a free three-card pack, while supplies last. “Hallmark has been in the business of caring for more than 100 years, so lending a hand to help others connect is part of our DNA,” said Lindsey Roy, Hallmark’s chief marketing officer. “During a time of unprecedented social distancing, we hope these cards will be shared across neighborhoods, towns and the country to help lift spirits.”

Cremo Unveils Hair, Beard Coloring Solution The latest launch from men’s grooming brand Cremo is focused on men who want a no-mess solution for coloring their hair and beards. The Laguna Beach, Calif.-based company is introducing its Hair & Beard Color line, which the brand said works in just five minutes. Each one of the seven colors available feature the Cremo 2-in-1 Hair & Beard Color Kit, a bottle with a brush application head designed to avoid mixing, gloves or a mess. The brush allows users to comb the coloring foam straight into their hair or beard. “Today, more and more men are coloring their hair, whether for their beard or on their head, and Cremo is excited to offer an easy solution for this growing grooming need,” said Matthew Biggins, CEO of Cremo. “We’ve carefully crafted a one-stop solution that anyone can easily use on their own — the premium color dyes come in a canister that you simply shake to mix. And our accompanying dye applicator and detailing tool make it easier than ever to achieve natural, even-looking results for both your hair and beard.” Available in light brown, medium light brown, medium brown, medium dark brown, dark brown, black and jet black, both the applicator and canister can be used for future colorings. Cremo’s Hair & Beard Color is available at select Walmart and CVS Pharmacy stores nationwide.

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INDUSTRY NEWS

Blue Lizard Australian Sunscreen Intros Reef-Safe Collection Crown Laboratories is expanding the lineup of its Blue Lizard Australian Sunscreen brand. New launches within the sun care brand include a reef-safe SPF 50+ collection, which will be available in baby and sensitive formulas, as well as a children’s option. Featuring zinc oxide and titanium oxide, the products are compliant with the reef-safe sunscreen legislation that passed in Hawaii and Key West, Fla. They also meet the Food and Drug Administration’s standards of being both safe and effective, the company said. “Crown has a strong relationship with its loyal customers, and we are committed to providing them with best-in-class sunscreen formulations,” Jeff Bedard, Crown’s president and CEO, said. “We’re adding the mineral-based SPF 50+ and user friendly stick because our customers asked, and we listened. Protecting consumers’ skin while remaining vigilant about the ingredients we put into our products, ingredients that provide safe and effective sun protection and also protect the environment, those are the key drivers of our product development.” The full lineup of new launches includes SPF 50+ baby lotion,

SPF 50+ sensitive lotion, SPF 50+ baby stick, SPF 50+ kids stick and SPF 50+ sensitive stick. In addition, the line will feature “Sesame Street” characters Cookie Monster and Elmo on its baby products, and Cookie Monster on the children’s sunscreen varieties. Blue Lizard Australian Sunscreen’s new offerings are available on its website, via Amazon.com and at Walgreens in store and online.

VERTICALLY INTEGRATED

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INDUSTRY NEWS

G Fuel, Faze Clan Team Up on New Flavor Launch G Fuel is expanding its partnership with e-sports organization Faze Clan. Together, the two companies will collaborate on talent, content, retail distribution, apparel, merchandise, and launch a new flavor of G Fuel Hydration — Fazeberry. “Faze Clan and G Fuel have one of the more storied partnerships in all of gaming,” Faze Clan chief revenue officer Jeff Pabst said. “Product development has been a key area of focus with numerous Faze Clan x G Fuel-themed flavors that have been introduced over the past eight years. We are excited to partner in 2020 on the launch of Fazeberry G Fuel Hydration and bring the new flavor to our community of Faze Clan fans.” Fazeberry combines the flavors of strawberry, blueberry and pomegranate together, while also providing users vitamins C, E, B12 and B6; amino acid L-Tyrosine; electrolytes; potassium; and magnesium, the companies said. In addition, the product does not contain caffeine, sugar or calories. “We’re thrilled to expand our long-standing partnership with Faze Clan and celebrate our eight-year anniversary by launching Fazeberry

G Fuel Hydration,” G Fuel founder and CEO Cliff Morgan said. “Our millions of passionate gaming fans can finally enjoy the timeless taste of our Fazeberry flavor, while also staying hydrated, laser focused and energized — all benefits that traditional sports drinks can’t provide.” G Fuel Hydration Fazeberry is sold at select Walmart, Sheetz, Speedway and Circle K locations nationwide.

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INDUSTRY NEWS

Carol’s Daughter Brings Goddess Strength Line to Stores Hair care brand Carol’s Daughter is looking to give hair an extra boost of strength by unveiling its Goddess Strength collection, designed for hair that is not only weak, but also prone to breakage. Consisting of a shampoo, conditioner, hair and scalp oil, and leave-in cream, the collection features such ingredients as black cumin seed, ginger and castor oil, the company said. Featured products in the hair care line include: l Goddess Strength Fortifying Shampoo with Castor Oil is sulfate free and features a blend of castor oil, black cumin seed and ginger. It retails for $10.99; l Goddess Strength Fortifying Conditioner with Castor Oil targets weak strands, restores moisture, and looks to ensure hair is strengthened from root to tip. It also leaves hair easier to detangle, and retails for $10.99; l Goddess Strength 7 Oil Blend Scalp & Hair Oil with Castor Oil aims to provide moisture to strands to protect them from breakage and split ends. It retails for $11.99; and l Goddess Strength Divine Strength Leave In Cream with Castor Oil moisturizes hair, reinforces weak strands with each use, leaves hair stronger between washes, and aims to better resist breakage. It retails for $11.99. The Goddess Strength collection is vegan and does not contain sulfates, parabens, petrolatum, mineral oil or artificial colors. The line is available via CarolsDaughter.com, Amazon.com and at retailers nationwide.

Camber Launches Generic Lyrica Patients with pain caused by nerve damage due to diabetes or shingles infection have a new generic treatment option. Camber is introducing pregabalin capsules, a generic of Pfizer’s Lyrica. Camber’s pregabalin is available in dosage strengths of 25, 50, 75, 100, 150, 200, 225 and 300 mg. It comes in 90-count bottles.

Avion’s Gloperba Offers Better-Tailored Dosing Specialty pharmaceutical company Avion announced that its gout prophylaxis product, Gloperba (colchicine oral solution), is now commercially available in pharmacies across the United States. The FDA approved Gloperba in a dosage strength of 0.6 mg/5 ml last January. Prior to Gloperba, colchicine was only available in tablet and capsule forms, which can make dose adjustments difficult for patients. As a liquid oral solution, Gloperba allows physicians and patients to easily tailor dosing as needed. “Gloperba brings a new level of flexibility and control to the management of gout with colchicine,” said Art Deas, Avion’s CEO. “Every gout patient is unique. As a liquid, Gloperba gives physicians the power to easily individualize treatment and titrate dosing based on their patients’ unique needs.”

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CONSUMER BEHAVIOR INSIGHTS

Before and After Despite pandemic, shoppers still look for deals and preferred brands By Peter Breen

R

etailers and brands should think twice before abandoning all promotional activity in the midst of the COVID-19 pandemic, because many shoppers are still looking for deals as they stock up for an uncertain future, according to a survey conducted in mid-March by Path to Purchase Institute. News reports and social media conversations have focused on a retail climate that has veered toward near chaos at times, with throngs of shoppers emptying store shelves in response to increasingly dire developments surrounding the pandemic. The institute’s survey identifies more thoughtful, deliberate shoppers still relying on preferred brands and retailers, and still hoping to find good prices before changing their typical behavior to buy the products they need when necessary. As expected, those behavioral changes include a significant number of shoppers moving toward online ordering and out-of-store pickup options. Fielded March 13 to 15, the survey was conducted among 1,001 primary household grocery shoppers in the United States, almost half of whom (44%) said they are stocking up on cleaning supplies, medications, personal care items and food to keep themselves healthy and prepared for whatever may come next.

Taken as a whole, the survey uncovered three key takeaways about the state of shopping behavior at this point in time. They are: 1. Shoppers are still “shopping;” 2. Online shopping is growing; and 3. Shoppers are ready to stay loyal.

1. Shoppers are still “shopping”

Although the near national run on both emergency health and grocery staples seemed to suggest that consumers are blindly grabbing necessary items without any consideration, the survey suggested that there’s more trip planning taking place than all those bare aisles would imply. In fact, the impact of the pandemic has led even more consumers to undertake the following activities with greater frequency: l Make a shopping list (31%): Since this behavior was more evident among suburban/rural residents and older shoppers, it could be driven by a desire to avoid being forced to make another trip to the store for items that they might otherwise forget; l Look for coupons (24%): Millennials and Gen Xers are leading the charge. Only 12% of respondents said they’re looking for deals less often than they did before;

Channels shopped for groceries before versus during COVID-19 pandemic 19%

70%

16%

71%

18%

20%

38%

41%

17% Supercenter/ Mass Store

27%

21%

21%

39%

27%

26%

55%

57%

60%

Drug Store

Online Retailer

Specialty/ Natural Store

47%

Discount Supermarket

Wholesale/ Club Store

66%

17% Supercenter/ Grocery Store

Dollar Store

Don’t shop here

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15%

21%

47%

42%

15%

16%

April 2020 DRUGSTORENEWS.COM

Typically shop here

Shopping here now as a result of the corona virus

Convenience Store


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Innovation’s PharmASSIST Changes the Game for High Volume Pharmacies

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Our technologies free up pharmacists so they can spend more time with patients for counseling services, immunizations, and medication therapy management (MTM), while reducing the cost of filling prescriptions. We plan to continue to scale our business, grow our market footprint, and enhance our offerings.” MARVIN RICHARDSON, CHIEF EXECUTIVE OFFICER: Marvin is a pharmacist and the CEO of Innovation, with 37 years of pharmacy and health care experience. Prior to joining Innovation, he co-founded Capstone Consultants LLC, co-founded the Minnesota-based PrairieStone Pharmacies, and served as a senior VP at Rite Aid.

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CONSUMER BEHAVIOR INSIGHTS l Review store circulars (23%): This could aid in the aforementioned list making and deal seeking, as well as provide a way for the next item; l Compare prices across stores (22%): The need for bulk buys and concerns over potential gouging likely are driving the change; and l Read product reviews online (18%): This again seems to contradict the wholly understandable perception that shoppers are simply “panic buying.” This shift in behavior could reflect the need to purchase unfamiliar products like face masks, perhaps; find the most effective solutions for staying germ-free; or try out new brands due to out-of-stock situations. Just as significantly, a much smaller percentage of shoppers (13% or less) said they have ceased any of these activities. And while product availability likely has become far more critical to ultimate purchase decisions than almost ever before, 83% of shoppers said they’re looking for low prices and deals, including 27% who said they’re doing that more often now. Conversely, only 10% said they’re less concerned about price. This greater price sensitivity could be related to the increased level of stock-up trips taking place, or to heightened and justifiable concerns about price gouging. One other behavioral trend that could have a significant impact on shopper engagement is meal planning: 28% of respondents said

Due to the COVID-19 pandemic, shoppers are more likely to:

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April 2020 DRUGSTORENEWS.COM

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they’re now planning meals and buying products accordingly, more than they did before the crisis began. That means 79% of shoppers, including those who already did, are heading to the store with specific ingredients in mind. (It’s probably worth noting that these results came before such major cities as New York and Chicago began to prohibit in-restaurant dining.)

2. Online shopping is growing

Among the more commonly expected outcomes of the pandemic is a surge in grocery e-commerce, with many industry analysts predicting a true tipping point in relation to brick-and-mortar shopping as consumers discover the relative ease — not to mention physical safety — of online shopping options. EIQ’s survey results support this theory, beginning with the increase in online-conducive pre-shopping behaviors, such as meal planning, price comparing and reading product reviews that was discussed earlier. Yet, it is reflected even more by the substantial increase in online grocery buying among respondents, 21% of whom said they’re now shopping online because of the pandemic — joining the 26% who already were. Assuming the pandemic continues to spread and

“shelter in place” rules proliferate, it will be interesting to see how many of the 57% of shoppers who still are not buying groceries online will do so. Drilling down to specific e-commerce activities, relatively equal numbers of shoppers said they are buying food online to pick up in the store (19%), to use curbside pickup (18%) or for home delivery (18%). All of those options help them avoid crowded aisles, long checkout or entry lines, and possible contamination to some degree. Adoption levels for online buying were roughly the same for personal care and household supplies, as well as for OTC and prescription medications. One possible check on more widespread adoption might be the fact that only 16% of shoppers said they have a high level of trust in the ability of retailers or delivery personnel to be sanitary and safely handle orders during preparation and delivery. Retailers themselves might very well help fuel greater adoption of home delivery, since a number of chains in recent weeks have dropped the service charges often associated with low-purchase online orders. The level of “shelter in place” guidelines set by municipalities, as well as the length of the COVID-19 outbreak, ultimately could have a major impact as well.

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DRUGSTORENEWS.COM April 2020

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CONSUMER BEHAVIOR INSIGHTS

Trip types before versus during COVID-19 pandemic Stock up (15+ items)

Fill in (5-15 items)

8%

53%

13%

29%

56%

23%

Quick trip (1-5 items)

16%

52%

22%

Immediate consumption

15%

54%

19%

Less often

The same amount

More often

3. Shoppers are ready to stay loyal

An additional finding that seems to belie the “gold rush” mentality of recent shopping behavior is the number of shoppers who said they want to continue visiting their preferred stores to buy their favorite brands. The current climate undoubtedly has led many consumers to alter their typical destinations for grocery purchases: Shoppers said they’ve shifted trips from their typical channel, most commonly supermarkets or mass merchants, to a different one in relatively equal measures — between 15% and 21% — across all channels. For the moment at least, drug stores have picked up as many grocery trips as online retailers, presumably because of the established status as a destination for health-and-wellness needs. However, 56% of respondents said they’re visiting the stores they always shop, while another 39% are only heading to other stores to buy something specific that they need. Not surprisingly, greater product availability was the reason most often given for the switch, cited by 58%. Other motivations were a more convenient location (34%), which might imply a desire to shorten trip lengths; a lack of the purchase limits that many chains have implemented to fend off hoarding (23%); better prices (20%); and the availability of products they don’t normally buy (18%), which likely reflects unique needs related directly to the outbreak. On the product side, 34% of respondents, who have shopped at a different store since the crisis began, said they did so in order to buy their preferred brands — again suggesting that the “whatever is on the shelf” mentality that has seemingly driven recent purchase behavior might be slightly misleading. Indeed, 22% of shoppers remain steadfast in their desire to “only buy my preferred brands.” While 58% expressed a readiness to buy another brand if their favorite wasn’t available. Only 21% said they would buy “any brand to get the items I need.” Asked which retailer they trusted to provide the products and services they need during the crisis, 18% of shoppers named Walmart. Target and Amazon came in at 6%, and Kroger and Costco at 3%. In total, 67 different retailers were named. On the product side, only three of the 114 brands named as being trusted to provide what respondents need received a significant number of mentions: Lysol (6%), followed by Clorox (3%) and Purell (1%). Collectively, these results suggest that, despite the upheaval in behavior caused by the pandemic, retailers and brands still have an opportunity to retain loyalty if they’re able to stay ahead of changing consumer demand and meet the needs of shoppers confronting an uncertain future — obviously, a task that’s far easier said than done in these exceptionally difficult times. dsn This article originally appeared on Path to Purchase IQ’s website on March 20.

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RETAILER UPDATE

Rite Aid’s New Path The retailer outlined a three-pronged focus at its recent Analyst Day event By David Salazar

R

ite Aid is in the middle of what it has dubbed an “RxEvolution.” At the Camp Hill, Pa.-based retailer’s virtual Analyst Day event on March 16, executives outlined their plan to expand the role of the chain’s 6,400 pharmacists and offer a “Pharmacy of the Future” within a retooled “Store of the Future” that is aimed at appealing to younger consumers. The company also is aiming to position its pharmacy benefit management business as a leader among mid-market plans. When it comes to the pharmacy, Rite Aid’s new CEO Heyward Donigan said that the company’s pharmacists will play a key role in getting customers engaged in their health-andwellness journey.

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“The pharmacist is the key to engaging consumers and the last mile connection between the health care delivery system and the consumer,” Donigan told Drug Store News in an exclusive interview after the analyst meetings. “Our pharmacists touch consumers between 25 and 30 times a year — and that’s about eight times more than a primary care physician interacts with his or her patients. So, if anyone can engage consumers, it’s got to be us. It has to be comprehensive. And it can be because 90% of consumers trust their pharmacists, and 98% of pharmacists at Rite Aid say what they really want to do as part of their mission and purpose is engage with consumers in their health and wellness.”

To make this concept a reality, Rite Aid officials are rethinking how the space behind the pharmacy counter works to facilitate a revamped production workflow that relies more on pharmacy technicians, as well as increased pharmacist consultation with patients. It also means moving certain OTC/alternative therapy merchandise that presents a counseling opportunity closer to the pharmacy. Currently, Donigan, on the job since last November, said that five locations in Baltimore are piloting the new workflows with a focus on increasing productivity to enable pharmacists to engage with consumers. She also said that the company is building prototypes of potential future pharmacy layouts.


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RETAILER UPDATE As they rethink the pharmacy, Rite Aid’s executives also are taking a new approach to thinking about the entire store, Donigan said, with a focus on attracting millennial and Gen X shoppers — especially women in these groups. “We aren’t backing away from retail,” she said. “What we’re doing is focusing on retail that is on trend and relevant for the customer that we’re going after. We’re really excited to be rolling out this new merchandise.” The first step to getting new items on shelves is sunsetting merchandise that is not turning. As part of this, Donigan said Rite Aid is exiting electronics, motor oil, clothing and other categories. During the Analyst Day event, COO Jim Peters said that another element of phasing these categories out is due to them being less relevant in the company’s efforts to make its stores a destination rather than a convenience trip. Reduced merchandise will make room for more air in the planogram, as well as the new merchandise, which Donigan said would include more better-for-you consumable options, trendy skin care and other categories the chain is hoping will inject some fun into the shopping journey. “We’re not just about getting healthy. We’re about getting thriving,” Donigan said. “And thriving is not just about not drinking soda and getting the right medications. It’s about having fun. It’s not a clinical experience, it’s a ‘radiating wellness and getting thriving’ experience that’s fun and nonjudgmental.” Rite Aid’s own brands also play a central role in the “Store of the Future,” Peters said on the analyst call, noting that the company sees opportunity to grow its own-brand market share with a focus on natural, organic, clean, cruelty-free and chemical-free products. Donigan said that Rite Aid is looking to grow its own-brand percentage from 19% to 23%, which Peters said would bring a margin benefit of nearly $100 million. Donigan also pointed to its private-label supplement brand as reflecting where the company is trying to go in terms of what it calls its own brand offerings, while also noting that others will need to come up to speed. “We have some own brands that do not reflect the future of our company — in terms of the packaging and maybe even the brand itself,” Donigan said. “So, our new head of

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merchandise and marketing has been working in earnest to get on that, and we’ve made good progress on completely repackaging a lot of our own brands, including Daylogic. We still have a lot of work to do on paper products, but we did launch our new own brand alkaline water, and it’s really outstanding, I think.” Refreshed interiors and signage will bring a new Rite Aid logo, and the chain plans to roll out new exterior signage to all of its stores by the end of the year. Additionally, the company plans to refresh its digital presence, including its e-commerce website and mobile app. In the opening salvo of its fight to attract younger shoppers, Donigan said Rite Aid would be testing the “Store of the Future” concept, including the “Pharmacy of the Future” in nine locations nationwide across urban, rural and suburban areas. Additionally, she said the company would be almost completely remodeling stores in Norfolk, Va., and conducting a full makeover of all stores in the Boise, Idaho market — moves Donigan said is based on the population density of target consumers in those areas. Also being rebranded is Rite Aid’s EnvisionRxOptions PBM business. The newly renamed Elixir will include RxBenefits

and RxInsurance divisions. RxBenefits encompasses pharmacy benefits management, as well as specialty pharmacy, mailorder pharmacy, Laker claims adjudication software and a prescription savings program. RxInsurance includes Part D plans, employer group waiver plans and commercial plans. Donigan said that an early key area for success is simply integrating a heretofore disparate group of companies. “The opportunity here — because these haven’t really been fully integrated — is a significant amount of basic blocking and tackling in terms of synergies and cost reductions, and opportunities to getting that done,” Donigan said, noting that she wanted to take a more active role in the PBM business. Accordingly, the role of PBM CEO was eliminated, and Dan Robson was named president of the business. All told, Rite Aid pegs the opportunity for Elixir at $400 billion, particularly when taken alongside the company’s retail pharmacy footprint. With the rejiggered Elixir, the company expects to grow its share of PBM members that use Rite Aid’s pharmacies from 13% to 30%, which represents 3 million additional scripts and roughly $40 million in pharmacy margin. dsn


PET SPECIALTY

SUPPLIER PERSPECTIVES

DOMESTIC VIOLENCE VICTIMS SHOULD NOT HAVE TO LEAVE THEIR PETS BEHIND Purina’s Purple Leash Project By Joe Toscano

At Purina, we believe that pets and people are better together. I know that my own dog, Stew, has definitely made my life better, and I cannot imagine being faced with a decision to choose between his safety or my own. Unfortunately, that decision is being made every day by domestic abuse victims who want to leave but can’t because there’s no safe place to go with their pets. Today, only 10% of domestic violence shelters in the United States allow pets. We want to change that. For more than a year now, Purina has partnered with the national nonprofit RedRover® on our Purple Leash Project – which aims to raise awareness and increasing the number of pet-friendly domestic violence shelters in the United States. Purina has committed more than $500,000 to create Purple Leash Project grants to fund petfriendly renovations at domestic abuse shelters across the country. In addition to offering grant support for shelter upgrades, Purina is donating pet food, supplies and other resources for pet owners escaping abuse. We’re also advocating in D.C. for more federal resources for domestic abuse survivors with pets. Because there is such a limited number of domestic violence shelters in the United States that allows pets, many abuse victims are left with a heart-wrenching decision: stay in

abusive situations with their pets or leave their pets behind to face the abuser alone. According to the National Coalition Against Domestic Violence, 71% of pet owners entering domestic violence shelters report that their abuser had threatened, injured or killed family pets. This is why nearly half of survivors will delay leaving abuse if they cannot take their pets with them. Throughout 2020, Purina and its associates will be working to bring more awareness to this issue and increase the number of pet-friendly shelters across the country, and I would like to challenge you to join us. Here are three ways you can help us raise awareness of the need for more pet-friendly domestic violence shelters across the country: • Use your social media platform to support survivors with pets using #PurpleLeashProject and highlighting one of the many sobering stats I’ve mentioned to start a conversation. • Visit PurpleLeashProject.com to receive updates and learn more ways to get involved with the cause. • Retailers can make an impact during the month of May by carrying a special Purple Leash Project Beggin’ Strips® merchandising shipper designed to drive attention and awareness for the cause and sales of 6 oz bags of Beggin’ Strips® Original with Bacon for our retail partners.

Contact your Purina sales rep to learn more.

S P O N S O R E D CO N T E N T F R O M O U R PA R T N E R P U R I N A B R A N D


PRODUCTS TO WATCH

Innovation Station Five products that made a mark in March

I

3

Dulcolax Laxative Soft Chew, Mixed Berry

1

t’s safe to say that a lot happened in March, and even amid the emergence of a pandemic, there was no shortage of new products hitting the market. Last month, companies introduced 371 new products across the wellness, OTC and beauty categories. Undeterred by the sheer volume, Hamacher Resource Group’s new product team combed through the product selection and found five that have serious potential for suppliers and retailers. They were:

Systane Hydration PF Lubricant Eye Drops

Though one of the laxative category’s biggest names, Dulcolax had not introduced a soft chew until March. The Dulcolax Laxative Soft Chew is formulated to offer gentle and fast relief from constipation by using water in the body. The cramp-free formulation, which is offered in a 30-count bag of mixed berryflavored chews, is meant to provide relief in as little as 30 minutes, according to the company.

Alcon’s Systane brand is differentiating itself via formulation and delivery method with its latest offering. The Systane Hydration PF Lubricant Eye Drops are said by the company to be the only preservativefree drops with a combination of HP guar and hyaluronan, which aid in the product’s ability to offer extra moisturization for sensitive eyes, as well as relieve post-surgical dryness. The product comes in a 30-count pack of single-use vials for users on the go.

4

Carefree Breathe Ultra Thin Pad (Regular with Wings)

Edgewell Personal Care’s Carefree brand is expanding beyond panty liners with its Carefree Breathe line, which includes the ultra-thin pad. The product is designed to offer an air-infused cover with a soft-touch feel, while keeping skin dry. The fragrancefree and dye-free pads also are made without other irritants in order to offer a solution for sensitive skin.

2

Neosporin Simply Ointment

5

Neutrogena Soothing Clear Turmeric Mousse Cleanser

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April 2020 DRUGSTORENEWS.COM

Johnson & Johnson was busy last month, and Neosporin Simply Ointment marks the company’s first of two entries on this list. The ointment is designed to appeal to the naturalcurious shopper by offering infection protection, while only containing three ingredients. The product, which can protect against infection for 24 hours, is free of preservatives, parabens and neomycin.

The latest skin care offering from Johnson & Johnson’s Neutrogena brand is leveraging the power of a trendy ingredient — turmeric. The cleanser includes turmeric and non-harsh ingredients designed to help remove pore-clogging dirt, oil and makeup from skin without stripping. The cleanser can be used on acne-prone, combination and dehydrated skin. dsn


SELFCARE ROADMAP INSIGHTS

G

MDC | Retail Tomorrow and Hamacher Resource Group recently joined forces to bring to life the Selfcare Roadmap, a tool meant to identify opportunities, reveal how next practices can reshape the brick-and-mortar shopping experience, inspire new merchandising and service models, and provide impact across all aisles. The tool, which only is available to GMDC | Retail Tomorrow members, demonstrates how to optimize shoppers’ health, beauty, personal care and wellness experiences, as well as how to drive new avenues for profitability by offering more than 140 insights and infographics that can be sorted by category of self-care occasion. This month, the companies have shared insights with Drug Store News about the anxiety shopper. dsn Anxiety

GEOGRAPHIC BREAKDOWN

NUMBER AFFLICTED

Anxiety

40M

INDIVIDUALS

INTENTION: MANAGING ANXIETY Southeast

12%

31%

Northeast

OF THE U.S. POPULATION

27% West

28% Midwest

14%

Key insight: Anxiety disorders are the most common mental disorders in the United States, affecting almost 1-in-5 adults.

Key insight: Across all regions, the top subcategory anxiety shoppers intend to purchase from is vitamins/supplements.

Anxiety

CONDITION INSIGHTS RETAIL PRICE COMPARISON HBW Average Price $5.73 Internal Analgesics and Sleep Aids Average Price $6.84 Sleep Aids Average Price $6.91 Sleep Aid Supplements Average Price $7.76 Dental Night Guards Average Price $12.42

$2

$4

$6

$8

$10

$12

Key insight: The sleep aid segment is more profitable overall compared with an average HBW item and patients are willing to spend more for natural alternatives to help support better sleep.

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COUNTER TALK

Going Mobile Four tips for retailers implementing in-store mobile payments By Brad Fick

A Brad Fick, president, Direct Source

lot of smaller-footprint retailers, especially pharmacies and drug stores, have maintained a consistent customer checkout and payment structure for as long as we can remember. With fixed stations located in the front of the store and within pharmacies, there’s been little incentive to change. But these days, the size of the store is irrelevant — it’s the size of the experience that matters. Most retailers looking to deploy a new or upgraded POS system should be focusing on mobile POS. Based on the fluctuating state of retail, a new need for helping consumers check out and pick up pre-ordered goods quickly or even deploying pop-up drive-through-type facilities, it no longer makes sense to lock yourself into a traditional POS system. Deploying in-store mobile devices, however, doesn’t have to be a significant undertaking. Here are some considerations to guide you through the process.

Formulate a Deployment Strategy with a Partner It’s easy to assume that mobile device manufacturers are well suited for helping develop a mobile POS device deployment strategy. But, there are multiple decisions to be made, such as the hardware, scanner and payment system that will work for your organization and software platform. An independent, third-party service provider is best for unbiased, vendor-neutral expertise while helping evaluate usage, hardware, application, network and security needs. Third-party providers can ensure your network has enough bandwidth to support the required devices, conduct site surveys to determine software needs and provide installation support. Integrators also can leverage their retail experience for a smooth rollout and support deviceto-network PCI compliance.

To Purchase or Not to Purchase? Mobile POS devices continue to evolve, with new generations boasting faster speeds, more memory and greater capabilities. But how often should you really “trade up?” One alternative to purchasing is choosing a

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April 2020 DRUGSTORENEWS.COM

hardware-as-a-service option. With this service, retailers have access to the latest mobile devices and a full range of peripherals for a monthly charge. And, you can upgrade as new devices are available or as store needs change. A HaaS contract can be customized to include warranty, software, support, installation/deinstallation and shipping.

Accessorize to Add Value No one wants to have multiple devices for multiple applications within the store — one multitasking device is better. So, choose a device to suit every need, such as mobile POS payments, on-thefloor sales support and inventory management. All-in-one mobile POS solutions, such as the VeriFone PAYware Mobile e335, integrate a wide variety of payment types with image scanners. The Ingenico iCMP, which also has EMV chip and pin, magnetic and NFC/contactless payments, can be used with iOS or Android. Other solutions, such as payment sleds for the iPad Touch or iPad Mini, can empower associates on the sales floor with immediate product information, inventory searches and payment processing.

Security and Support Given that wireless device thefts are on the rise, security is particularly important for any mobile payment strategy. Make sure policies and solutions are in place to protect assets and information — including customer information — with services like remote wiping and deactivation. Also, consider exceeding PCI compliance to ensure the mobile program is future proofed. Retailers should also have a support plan in place. Including support services as part of the up-front planning can help optimize mobile policies and make operational workflows more efficient. With the proper mobile strategy that focuses on mPOS and supports pricing, inventory, merchandising and other systems, retailers can better engage with shoppers on their own terms, adjust quickly to changing consumer and industry needs, and leverage the best technology tools to get the job done. dsn


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FOCUS ON: SIMPLY GOOD FOODS

More Than a Diet Simply Good Foods and its Atkins brand focus on wellness through nutrition BY SETH MENDELSON

O

fficials at Simply Good Foods, the parent company of the Atkins brand and its various diet plans, want retailers to know that they are doing the hard work for them. And, the result, if they get on board, will be an uptick in sales and profits from one of the hottest categories at retail these days. With various diet plans, broad merchandising and marketing strategies, and a growing list of in-demand products, company officials are confident that their retail partners significantly can increase their bottom line by developing a dedicated section to low-carb and low-sugar foods, and stocking it with a broad assortment of Atkins products. The proof, as they say, is in the pudding. Simply Good Foods, a publicly held company based in Denver, registered nearly $525 million in sales from its Atkins products last year, a dramatic and extremely respectable 20% increase over sales volume from the previous year. Shipment volume also increased around 20% last year. “This is an extremely vibrant category that is helping more and more

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April 2020 DRUGSTORENEWS.COM

consumers live a healthier lifestyle,” said Scott Parker, the company’s chief marketing officer. “I have been in the marketing business for many years, and I can tell you that Atkins is one of the strongest brands I have ever seen. It has a loyal and growing consumer base, all searching for great-tasting products in the low-carb and low-sugar categories.” Retailers are chiming in, too. A number have made it clear that offering consumers a wider array of products — especially those considered in the better-for-you segment — can attract more consumers, as well as those shoppers with more disposable income. At the same time, many merchants are counting on suppliers like Atkins to pay more attention to educating consumers about the benefits of better-for-you lifestyles through advertising and with in-store vehicles. Noting that Atkins is a leader in addressing two key issues — obesity and Type 2 diabetes — Parker, who has spent about 10 years with Atkins after a decade-long stint with Jenny Craig, said that about 10 million consumers are active members or in the Atkins database.


Another 10 million are registered with the company and are always looking for more information about the category and the brand. “We have studies that show that not only are we the category leaders, but we are also generating the most growth,” he said. “We bring new people into the category all the time. On average, our customers buy more than 100 servings of our product every year.” He said about 10% of the domestic population has diabetes and as many as another 75 million people have pre-diabetes, and many of them realize that they have to change their lifestyle, including what they eat. “We have studies that show that an Atkins-type low-carb diet can significantly improve the blood sugar level of the user,” Parker said. “It can result in the remission of Type 2 diabetes.” “We are doing all in our power to educate consumers and make it clear that it is critically important to them that we want to help people adopt different, healthier, lifestyles,” Parker said. “We are doing all we can to build awareness of the power of living a better lifestyle.” Those efforts include a $20 million marketing campaign in television, digital and print that feature actor Rob Lowe as the company spokesperson. “He has lived a low-carb lifestyle for the last 24 years,” Parker said. “He is a perfect candidate for us to help us get that message across to consumers that living a healthy lifestyle can make a difference in how they feel and how they look.” The company has nearly 50 different items in the shakes, bars and treat segments, offering users a variety of ways to get more fiber, protein, calcium and other vitamins into their systems without sugar. The company also licenses out a frozen food line. Parker said Atkins is looking to expand the assortment, adding such items as baked goods and savory snacks in the near future to satisfy

consumer demand. Other products also will be added to the line in the near future, he said. Today’s Atkins is the current generation of a company founded by Manhattan cardiologist Dr. Robert Atkins in the late 1990s. Parker said that Dr. Atkins had quite a few heart patients who were overweight, and he searched for nutritional approaches that could help them. He developed a diet plan that lowered cholesterol and often led to a dramatic loss in weight for those patients. Word hit the street and, eventually, a writer at a major national magazine asked Dr. Atkins to help her lose weight with his program. That story made it into print and the revolution took off. The company was sold to Goldman Sachs in 2003, but just two years later, with changing diet demands by consumers and overexpansion by the company, it went bankrupt. Private equity got involved, and leadership cut down on the number of products, getting rid of slow-moving merchandise in favor of the products with the best turn rates. “We really made a strong effort to rebuild this franchise,” Parker said. “By 2017, we were in good enough shape to take the company public. Now we are the Simply Good Foods Company, and we are doing very well in the marketplace.” And, how does the future look? Parker is confident that more and more people will look to healthier products to make them feel better, look better and live better. That should lead to more household penetration and an opportunity to improve sales per buyer. “Our future is extraordinary and I think any astute member of the trade will be seriously looking to expand their low-carb section to meet their customers demands and interests,” he said. “Consumers are looking for these products as an option for all meals — breakfast, lunch, dinner, snacking. Now, we just have to make them aware of what we offer and our many benefits.” dsn

DRUGSTORENEWS.COM April 2020

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CBD NEWS

Irwin Naturals Promotes its CBD Line

Also Organics Debuts with Whole-Family Approach A new cannabinoid brand is hitting the market with a focus on adults, children and pets. Also Organics, based in Nashville, Tenn., has debuted its line of alternative wellness products, which contain full-spectrum CBD and cannabigerol, or CBG, made from American-grown hemp. “Also Organics was created out of a personal family need for quality and trusted CBD, which we believe should be defined by non-GMO and organic ingredients, as well as certified and advanced production processes,” said CEO Matthew “Chewy” Smith. “Moreover, in a ‘sea of CBD sameness,’ we want consumers to instantly recognize Also Organics for transparency and our respect for the environment.” The company’s product lineup includes: l 1500 mg CBD Tincture, 1000 MG CBD Tincture and 500 MG CBD Tincture; l 300 MG CBD Tincture (Kids); l 200 MG CBD Tincture (Pets); l 1000 MG CBD Pain Salve and 500 MG CBD Pain Salve; l 1500 MG CBD Body Lotion and 500 MG CBD Hand Lotion; l 50 MG CBD Gel Capsules and 25 MG CBD Gel Capsules; l 250 MG CBD Drink Mix (Berry) and 250 MG CBD Drink Mix (Orange) l 1000 MG CBD Skin Balm and 500 MG CBD Skin Balm; and l 25 MG CBD Gummies and 10 MG CBD Gummies. The products currently sell on the Also Organics website, as well as at retailers, wellness boutiques and clinics. The company also said that it is securing regional, national and international distribution partners.

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Earlier this year, herbal and CBD products manufacturer Irwin Naturals offered a CBD For Free promotion. In January, the company offered free 60-count bottles of its CBD 10 mg softgels to consumers who visited the website and used a promotional code, then paid for shipping and handling. The promotion was designed to highlight Irwin Naturals as a manufacturer of accessible CBD products. The company said that a 60-count bottle of 15-mg CBD softgels costs $32.99, or 3.7 cents per mg. Irwin Naturals said its CBD softgels are made from high-quality full-spectrum hemp extract with naturally occurring CBD that is sourced in the United States. The hemp extract is delivered through fast-release liquid softgels and combined with such nutritious oils as flaxseed oil and MCT oil. The company uses third-party testing to ensure the purity and potency of the full-spectrum hemp extract, while ensuring THC levels are at trace amounts of less than 0.3%. Testing results can be found by scanning the product QR code or entering the lot number on its website.


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CBD NEWS

Somnus Intros CBN-Based Sleep Aid Alternative Somnus is launching a sleep aid alternative, using a cannabinoid purported to offer more calming properties than CBD to help consumers sleep. The Denverbased company is releasing a sleep aid alternative that contains cannabinol, or CBN, a cannabinoid that is similar to CBD. CBN is said to bind directly to the CB1 and CB2 receptors in the nervous system, which gives it stronger calming properties, according to the company. Somnus’ sleep aid alternative is available in a 30-count gummy bottle, five-count gummy packs, a 30-dose tincture bottle and a 30-count gelcap bottle. Made without the use of THC, alcohol or melatonin, the product is derived from hemp and aims to provide users with a restful night’s sleep, without the morning grogginess, the company said. Somnus’ sleep aid alternative, made for those over the age of 18 years old, had its soft launch during the 2020 X Games with several sponsored athletes. It was named the official sleep aid of the GoPro Mountain Games in June 2020.

Fire Organix’s CBD Nano Concentrate Aims to Boost Bioavailability Chico, Calif.-based Fire Organix is taking its experience in developing water-soluble CBD for wholesale and retail to a new consumer-focused product. The company’s CBD Nano Concentrate, which contains 15 mg of CBD in a 1-ml package, is designed to offer a more efficient delivery method for the cannabinoid. “Fire Organix CBD Nano Concentrate is unlike conventional CBD oils,” said founder and CEO Britt Johnson. “Our unique process results in a water-soluble liquid CBD product that is significantly more bioavailable than other CBD products. This means a better, more effective product.” The company said that a 2016 study on bioavailability, published in the journal Cannabis and Cannabinoid Research, found that orally administered CBD oils tend to have low bioavailability of CBD. However, research dating from 2007 found that water-soluble nanoemulsions can improve oral bioavailability by as much as 800%. While most nanoemulsions offer oil-in-water emulsions of 100 to 500 nanometers, Fire Organix said its nanoemulsions are in the range of 10 to 50 nanometers. Fire Organix is positioning the CBD Nano Concentrate as a solution for consumers looking to incorporate CBD into their supplement regimen. The singleserve product, packaged in light-refracting vials with tamper-evident seals, can be added to any beverage or liquid. The product currently is sold online in five-packs, which sell for $18.99.

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CBD NEWS

Broad-Spectrum Offerings Grow Medterra’s Lineup

Charlotte’s Web to Acquire Abacus Health Charlotte’s Web is making an acquisition that will give it a big edge in the food/drug/mass CBD market. The Boulder, Colo.-based company is acquiring Abacus Health Products, which markets the CBDMedic and CBD Clinic brands. The transaction is expected to give the company roughly 34.7% market share in the FDM channel. The deal will see Charlotte’s Web offering a total equity consideration of $99 million in stock. Abacus shareholders will receive 0.85 of a common share of Charlotte’s Web per Abacus share. Charlotte’s Web said the deal, by combining its CBD wellness products and Abacus’ OTC topicals, will make it the world’s largest vertically integrated CBD company. “The complementary strengths of our relative market positions made this merger a logical strategic move,” said Deanie Elsner, CEO of Charlotte’s Web. “With this acquisition, we strengthen the business to reflect the evolution of the category. Because most of Abacus’s products are positioned in adjacent categories, our combined distribution reach has limited shelf overlap. Together we are the most developed CBD company

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across every channel and segment, and positioned to accelerate our growth and extend our market share. Furthermore, it enables us to drive more scale production through our vertically integrated infrastructure.” Combined sales for the new company were $29.1 million for the third quarter of 2019. Currently, Abacus distributes more than 50 SKUs across 12,000 doors and 16,500 healthcare practitioners. The addition to Charlotte’s Web gives the company an immediate expansion in topicals and in retail skin care. It also adds a foothold in the personal care and beauty segment that Abacus gained through its February acquisition of Harmony Hemp. Overall, the company expects its food retail market share to reach 23% through the transaction, which also will boost its drug channel share to 43.5%. The acquisition still is subject to approval by Abacus shareholders, who have been encouraged by the Abacus board of directors to vote in favor of the transaction at an upcoming special meeting that will be convened after regulatory and court approvals, as well as after other closing conditions have been completed.

Medterra CBD is moving beyond CBD isolate with its latest product line, Medterra Broad Spectrum Tinctures, which are bringing whole-hemp formulas to the Irvine, Calif.based company’s shoppers while upholding its no-THC standard. “At Medterra, we strive to provide everyone with the highest-quality CBD products on the market, and could not be more excited to introduce our line of broad spectrum tinctures,” said Medterra CEO Jay Hartenbach. “With growing consumer demand for different cannabinoids, we’re excited to offer them exactly that, but without the effects of THC.” The broad-spectrum offerings will be available in 1,000- and 2,000-mg strengths — the former of which retails for $59.99 and the latter of which is priced at $99.99. The products are available in three varieties — unflavored, strawberry mint and citrus flavor. Among the cannabinoids present in the tinctures are cannabinol, or CBN, and cannabigerol, or CBG. Each bottle contains 30 servings. Currently, Medterra said it is the most widely distributed CBD company in the world, with its products available through grocery, drug and online retailers and at more than 18,000 retail locations.


COVER STORY COVER STORY

Drug and food retailers take a leading role in the battle against the coronavirus pandemic BY MARK HAMSTRA

T

hese are the times that try men’s souls.” Unfortunately, Thomas Paine’s comment nearly 250 years ago holds true today. The COVID-19 pandemic has caused economic havoc and uncertainty unseen in this country in at least the last 90 years and perhaps ever. Yet, drug and food retailers have remained at the front lines of the

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pandemic, second only to healthcare providers and first responders, in helping provide critical, life-sustaining services to the nation and its consumers during this crisis. As the virus rapidly spreads across the country and around the world, retailers have been proudly running at a full sprint to keep up with the rapidly-changing environment of concerned customers and employees, a strained supply chain, and the effects of a tightening government lockdown.

They are playing a significant role, helping the nation navigate the crisis by providing needed food and medicine, while, at the same time, making significant adjustments to their operations to protect the health of their workers and their shoppers. Several retailers also have stepped up to fill a needed role by providing sites for patient testing, and some are hiring thousands of additional personnel amid mass layoffs in other industries.


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COVER STORY At the store level, and putting their own worries aside, clerks are filling shelves at a record pace; store management is pitching in to do much of the heavy lifting; and pharmacists have become an even greater source of much-needed information for a public that is not only frightened but confused. The first challenge retailers have been forced to navigate has been the waves of panic buying, driving people into stores to stock up on shelf-stable goods, immune system boosters and other supplies. “I think the biggest thing retailers are facing is increased demand,” said Doug Baker, vice president of industry relations at FMI - The Food Industry Association. “It’s really unprecedented.” Many mass retailers have been reporting double, triple and quadruple their normal daily sales volumes. “That type of demand is going to put a strain on any supply chain,” Baker said, noting that retailers and their suppliers have been handling the spikes in demand with a high level of proficiency. “The machines are running 24/7. There are selectors in the warehouses, and the trucks are getting out to the stores.” Suppliers and retailers have been working together to come up with solutions to help keep the flow of products moving, such as suspending the shipments of slow-moving SKUs to focus only on the most popular sizes and varieties of certain items, as well as on items that can be manufactured most efficiently. Retailers also have had to begin placing limits on some items and caution consumers against hoarding in order to ensure that products are available for all their customers. “We are working tirelessly to have the items you need on our shelves,” said Todd Jones, CEO of Lakeland, Fla.-based Publix Super Markets, in a letter to customers. “We have applied purchase limits on some key items to allow more customers to get what they need.” In a statement on its website, Pittsburghbased Giant Eagle asked customers to “be mindful” of how much of each item of products they purchase. “We are working very closely with our supplier partners to keep our shelves stocked with the items you need most, including fresh foods, cleaning supplies, and medications,” the company said.

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CRISIS USHERS IN ‘NEW NORM’ FOR CONSUMERS, RETAILERS The coronavirus pandemic could have lasting impacts on both the way consumers shop and on retailers’ operations, according to Scott Clarke, vice president and consumer products industry lead at consulting firm Publicis Sapient. For example, consumers whose local stores ran out of milk may have tried plantbased alternatives for the first time, and others may be stocking up on vitamins and supplements, or other healthful products, to boost their immune systems. “The question is: Will those products that we turn to in this time of crisis continue to have high levels of consumption?” Clarke asked. Because the future path of the disease is still unknown — it could dissipate and return in the fall, for example, or come back again next year — consumers who may have been on the fence about switching to healthier diets could potentially change their shopping habits in the future. In addition, as consumers increasingly turn to online shopping during the pandemic, those shopping habits can be expected to continue, Clarke said. “I think we have kind of turned to this new way of consuming.” This will result in retailers and their supplier partners investing in more advanced online platforms for direct-to-consumer selling and customer data analysis, he said. Although retailers and suppliers might not be focused on technology investments at this point in the crisis, he said he expects that many emerging technologies, including the Internet of Things and artificial intelligence, will in fact accelerate because of it. “I think these emerging technologies end up accelerating into the mainstream much more quickly,” he said. “It’s not as though we’re shifting 180 degrees. We’re just accelerating the linear paths to a number of things that we were anticipating were going to become mainstream in three to five years’ time anyway.” Other innovations that Clarke predicted could see increased investment as a result of the crisis include: • Voice-based technology: Concerns about spreading germs via POS touchpads — now found at nearly every retail checkout station across the country — could spur the adoption of voice-activated technology for such things as authorizing payments, Clarke predicted. • Automation of processes, which could result in store personnel being shifted to more customer-facing roles. “I see a combination of AI, IoT and robotics augmenting the unique skills of humans,” he said. “With machines increasingly equipped to handle labor-intensive and repetitive activities such as back-end order fulfilment and distribution, cleaning, inventory management and logistics, shelf stocking, and even checkout, there is an opportunity for retailers to repurpose and ‘upskill’ store associates to focus on higher value, customer-facing activities, including personalized service and customer care, upselling and cross-selling.” • Dynamic pricing, which allows retailers to adjust prices based on market demand and other variables. The coronavirus crisis illustrates the opportunity for this to be applied to ensure lower-income consumers have access to the products they need. “It’s going to be critical for retailers to come out of this as being good corporate citizens, being socially responsible and not opportunistic,” Clarke said. —Mark Hamstra


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COVER STORY

Food and drug retailers are adding tens of thousands of workers to their stores and warehouses, boosting pay and enacting safeguards to protect their health as they come face-to-face with each other and customers.

Workers in Demand

It is quite clear how seriously the industry is taking this pandemic. Food and drug retailers are adding tens of thousands of workers to their stores and warehouses, boosting pay and enacting safeguards to protect their health as they come face-to-face with each other and with customers. “It’s very important that we understand that people are what keep this industry open,” Baker said. “Maintaining their health, and also having contingency plans in place for labor, will be extremely important as this thing progresses.” Several retailers have said they are increasing workers’ salaries as a form of “hazard pay.” Camp Hill, Pa.-based Rite Aid, for example, implemented a “Pandemic Pay” policy with $2-per-hour wage increases for hourly employees and bonuses for pharmacists and managers in both its stores and warehouses. Walgreens is offering a bonus to both full-time and hourly store and distribution center workers at the end of this month. Rite Aid CEO Heyward Donigan told Drug Store News that one of the company’s main priorities is “keeping our associates healthy, because if they’re not healthy, they can’t be in the stores, or at the mail-order pharmacy, or at the specialty pharmacy, or at the PBM to serve our customers. The challenge really does get back to keeping our associates healthy and helping them be able to keep up with this volume and keep products in stock.” Cincinnati-based Kroger is among several retailers that have ramped up hiring to meet increased demand during the crisis. The company said it had positions open throughout its stores and warehouse network, and that qualified candidates could be placed within a matter of days. Retailers also are redistributing their labor, shifting workers from positions that no longer are needed, such as stocking salad bars, to other responsibilities, Baker said. Some retailers have implemented extraordinary safety

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precautions to protect their employees, including installing plexiglass partitions throughout their store networks to help protect their pharmacists and cashiers. “Our associates are on the front lines, ensuring Americans have access to the food, services and products they need during this unprecedented pandemic,” Kroger said in a statement announcing the rollout of the new partitions. “We are committed to protecting the health and safety of our associates.” Other retailers also have installed plexiglass partitions in their pharmacies and checkout lanes to protect workers from the spread of the virus, which is believed to be transmitted primarily through airborne water droplets from the coughs and sneezes of infected individuals. Bentonville, Ark.-based Walmart said it first rolled out the protective barriers in its pharmacies and was extending them to its checkout lanes to protect cashiers, as well. At Kroger, employees are permitted to wear protective masks and gloves, and the company said it is working to ensure that retail workers are near the front of the line for these items once government officials secure enough masks for the healthcare industry. A shortage of such equipment, as well as coronavirus testing kits, already has slowed the rollout of planned testing centers at CVS Pharmacy locations, CVS Health CEO Larry Merlo said in a March 24 interview on CNBC. He said the retailer, which is seeking to add 50,000 workers to handle increased consumer demand for products, also is working with other such retailers as Target, Walgreens and Walmart to make testing kits more readily available. Retailers also are stepping up their sanitation procedures to keep their stores clean to protect both workers and customers, and enhancing their sick leave policies to make sure employees don’t come to work if they are feeling ill or have any of the symptoms of COVID-19. Kroger, for example, enacted an emergency leave policy, allowing paid time off for any employee diagnosed with the disease or placed under quarantine by a public health official or a medical provider


COVER STORY because of COVID-19. Eligible workers can receive their standard pay for up to 14 days. In order to better protect customers, retailers are increasing their sanitization of shopping carts and other high-use areas of their stores, such as credit card terminals and checkout belts. Many have begun enforcing social distancing in the checkout lanes, using signage and floor decals, as well as verbal direction from employees. Many retailers have reduced their operating hours to allow more time for shelf stocking and deep cleaning overnight. “We remain committed to serving communities across the country during this time as federal and state government officials continue to ask essential businesses like Walgreens to remain open,” said Rina Shah, group vice president of specialty and retail pharmacy at Deerfield Park, Ill.-based Walgreens. “To continue to meet the needs of our customers and patients while maintaining safety for the community, we have adjusted many aspects of our operations. To ensure product supply, we continue to work closely with

partners to address the current supply chain dynamics. “We’re also instituting guidance and limits around certain highdemand medicines. Additionally, many boards of pharmacy have worked with state governments to reduce regulatory and legal burdens around the pharmacy practice that have allowed our pharmacy team to continue to serve all of our patients,” Shah said. “We’ve also introduced a number of initiatives to ensure patients and customers can get access to essential products and medicines. From providing expanded drive-through services to specialized care for seniors, we’re delivering care when and how our customers need it.” Brian Cornell, CEO of Minneapolis-based Target, said in a March 25 interview with CNBC that he expected the company to incur additional expenses of $300 million in the first quarter from reduced hours, employee bonuses and increased sanitation. Among the new perks Target is offering employees is the ability to shop the stores before they open three days a week, he said.

AMONG OTHERS, WALGREENS STEPS UP As with many other mass retailers, including its two drug store rivals, Walgreens is stepping up to the plate big time in terms of protecting its consumers and workers during the coronavirus pandemic, while still offering shoppers as many products as possible. According to Rina Shah, the Deerfield, Ill.-based chain’s group vice president of specialty and retail pharmacy, the company quickly implemented policies to ensure the health, mental and physical well-being of its employees, from headquarters to store level. “Our team members, Walgreens heroes, are in communities across the nation to help our patients, who are relying on us now more than ever,” Shah said. “I have the privilege of hearing examples from around the country about how our team members and pharmacy staff are heroes, going out of their way to support our patients and customers. To keep team members safe as they continue to work hard, the chain is following CDC guidelines for social distancing, cleaning and hygiene in its stores. “Our stores also now have visual cues to indicate a “Social Distancing Line,” to help customers and team 52

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members stand 6 ft. away from each other,” she said. “We closely monitor situations, and actively review our policies, procedures and operations to promote the safety and well-being of our team members and customers. We’re also in close communication with the CDC and other health officials, so that we’re prepared to take whatever steps may be appropriate in the best interest of our teams and communities.” To be clear, CVS Pharmacy and Rite Aid, as well as other major chains including Walmart and Target, also have developed new strategies to protect their workers, suppliers and shoppers. Among the initiatives started by Walgreens is bonus pay to store team members, announced in mid-March and paid in late April. Full-time employees at stores and distribution centers receive $300 and part-time hourly workers get $150. A revised attendance policy is relaxing the current policy for hourly team members through the end of April, permitting team members to stay at home due to concerns surrounding COVID-19 for

such situations as childcare needs due to school closures, or if team members are showing flu- or COVID-19-like symptoms such as fever, cough or shortness of breath. Also, the company is paying team members for up to the first two weeks of their absence if they contract a confirmed case of COVID-19. The team member will not be required to use paid time off, or PTO, or vacation time, and/or apply for disability benefits during this time. If team members are unable to recover and return to work after two weeks, an additional pay option may be available via disability leave. That policy also ensures that if a store, area office, distribution center or other company workplace location falls under a mandated quarantine, any impacted team members will be paid for their absence without requiring the use of PTO. Walgreens also is hiring additional employees and adjusting store operating hours so that closed units can be cleaned, sanitized and stocked. — Sandra Levy


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Retailers have been urging customers not to shop if they are sick, and promoting their delivery and pickup services more prominently, including the free delivery of prescriptions.

Dedicated Senior Hours

Perhaps one of the most widespread initiatives retailers have adopted is the creation of dedicated shopping hours for older consumers, who are among the most at risk of serious illness from the disease. Retailers large and small have made this service available in their communities around the country. Publix, for example, said it was opening its stores and pharmacies on Tuesdays and Wednesdays from 7 a.m. to 8 a.m. for customers age 65 years old and older. “We appreciate everyone’s support as we work together to protect the most vulnerable members of our community,” the retailer said in a statement. Retailers also have been urging customers not to shop if they are sick, and promoting their delivery and pickup services more prominently, including through the free delivery of prescriptions. Both retailers and third-party delivery firms, such as Instacart and Shipt, have bolstered their staff with additional personnel to handle the influx of curbside pickup and delivery orders. Retailers also have warned customers that deliveries might be delayed and some products might be out of stock. Rite Aid, in addition to detailing its wide-ranging efforts to protect employees and customers from infection, has been promoting its online and mobile app ordering capabilities, including free prescription delivery for certain qualified medications. “We are working around the clock to procure products like sanitizer, cleansers, rubbing alcohol and other items our customers need,” Rite Aid’s Donigan said in a letter to customers. “We’ve also significantly increased our staffing levels to fill online orders quicker.” The company said it established purchase limits of certain items both in store and online to ensure they are available for all customers. “We appreciate your patience and understanding as we continue to work on replenishing merchandise,” Donigan said.

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Clear Communication

Another important element of retailers’ relationship with both customers and employees is transparent communication. Employees need to understand that there are risks involved with coming to work, and both customers and workers should be aware of the steps companies are taking to protect them. “Transparency is the most important thing right now, and letting everybody know that they’re in good hands,” said FMI’s Baker. “We need to make sure consumers know that grocery stores are not closing down, just like we need to make sure the employees feel comfortable that when they go into the stores, they’re being protected.” Scott Clarke, vice president and consumer products industry lead at consulting firm Publicis Sapient, said that communication is key for retailers in times of disaster. In addition to helping calm the panic buying through careful messaging and limitations on purchases, retailers also can help guide shoppers through purchases. Consumers might be seeking foods or supplements that boost their immune systems, for example, Clarke said. “People are going out and just buying everything that they see without realizing that certain products may be providing the same purpose, and you don’t need product X if you’re buying product Y,” he said. “So, it’s about helping people make smarter choices about what they do need to stay healthy, and to protect themselves and protect others from the pandemic.” Communicating to customers around product availability also is important, he said, suggesting that retailers post store inventory updates online so that consumers can see what’s out of stock before they make a trip to the store in the first place. “If products are out of stock in the store, give [customers] an alternative to buy them online so they don’t have to leave the house, which is increasingly important,” Clarke said. dsn


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CRISIS TALK

Helping Heroes to Help America How NACDS is taking steps to support the industry as it responds to the COVID-19 pandemic By Steve Anderson

W Steve Anderson, president and CEO, NACDS

e thank Drug Store News for welcoming an update on the industry’s COVID19 response. We value our partnership.

Reverent Appreciation I am sure that the Drug Store News team will agree that any such report will include, first and foremost, reverent appreciation for those on the front lines of this public health emergency. Pharmacists, pharmacy staff and team members throughout the store stand among the heroes of this pandemic. The same is true of personnel from supplier partners, who are helping to assure people have the supplies that they need. CDC on Pharmacy Value NACDS primarily is focused on assuring that these heroes have what they need from a public policy standpoint amid COVID-19. In fact, representatives of the Centers for Disease Control and Prevention, or the CDC, told NACDS members during a conference call that their operations are critical to our nation’s successful handling of a pandemic. The CDC urged a focus — and collaboration — to help assure pharmacy continuity, to help keep the public and pharmacy personnel healthy, and to help maintain clear lines of communication and situational awareness between pharmacies and community leaders. Removing Barriers to Patient Care Our message to the federal and state governments is clear and to the point: Barriers need to be removed immediately to assure these individuals and companies can be fully prepared to meet the extraordinary crush of demands that will result from COVID-19. This relates to the ability of pharmacies and pharmacists to help those affected by COVID-19. It also relates to helping those affected by other illnesses who may otherwise be on the outside looking in at an overwhelmed healthcare system. NACDS is making our case in very, very specific terms to all levels of government about the exact barriers that need to be removed. Barrier removal relates to helping keep pharmacies open; helping to prevent and address any medication supply issues; assuring

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pharmacies and pharmacists are empowered to provide COVID-19 testing, medications and vaccines when developed; and helping to reduce pressures on hospitals, physician practices and urgent clinics. NACDS issued an open letter to the White House, to the Congressional leadership and to all of our governors. We urged them “to not let our pharmacists be unnecessarily hamstrung by needless restrictions that prevent the Americans we serve from receiving care.” Removing Barriers to Critical Products NACDS also was among 111 organizations that wrote to these constituencies to urge a uniform definition of “critical infrastructure” — a term that affects whether manufacturers continue to operate. This coalition also recommended taking care that transportation and workforce policies do not create artificial barriers to product shipment. Public Opinion Insights NACDS received the results of a national survey conducted by Morning Consult, and commissioned by the association, from March 26-28. In the survey, voters strongly support the issues that NACDS is raising. l Pharmacies maintain the highest accessibility score of health destinations tested; l Three in four (76%) respondents agreed that COVID-19 has shown pharmacies’ importance for public health, and governments must remove barriers that prevent their full utilization; l An amazing 86% support pharmacist-provided COVID-19 testing, and vaccinations reflect the prior survey’s support level for these services relative to other illnesses; and l Overall, respondents are as likely to believe pharmacists have a role in helping patients deal with COVID-19 as in helping them with other illnesses. As we continue to respond to this public health emergency together, NACDS invites Drug Store News readers to visit our industry resource portal at NACDS.org/Prepared. Thank you for all you are doing to rise up for and with America. dsn


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CRISIS TALK

Community Pharmacies Live Up to the Name Independent pharmacies and their expanded services offer stability in a pandemic By Doug Hoey

N Doug Hoey, pharmacist and CEO, National Community Pharmacists Association

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eighborhood pharmacies are crucial to the health of their communities. This is always the case, but it becomes especially apparent during environmental disasters or crises like the coronavirus pandemic. Newspapers and TV stations across the country are drawing attention to the value of pharmacy services, highlighting even in the face of so much worry just how hardworking and creative independent pharmacists are as they provide patient care. Pharmacies are stepping up in countless ways to continue doing business, albeit not business as usual. More than half of community pharmacies offer compounding services, and many of them are filling a supply void where they can by making hand sanitizer. It’s hard to imagine that such an everyday product is now vital to our national strategy for getting the outbreak under control. But it is, and independent pharmacies leaned forward to fill this public health need. Some are going even further by donating this product to patients, at-risk populations or local emergency responders. I’m proud that the National Community Pharmacists Association is teaming up with PCCA and the Alliance for Pharmacy Compounding to launch the #CompoundingHandoff campaign, seeking to provide compounding pharmacies with a plan to help their communities and to unite participating pharmacies’ efforts to supply alcohol-based hand sanitizer products that otherwise are in short supply. Compounding can also play an important role in making necessary prescriptions if essential drugs go into shortage. To help eliminate a reason for patients to leave their homes, neighborhood pharmacies are increasing their delivery services or expanding delivery zones so as to bring essential items right to their doorsteps. Pharmacists are emphasizing their drive-thru options and are developing curbside pickup strategies at their pharmacies so healthy patients don’t have to expose themselves or others. Many provide sameday medication delivery, an important offering that has been a staple service by community pharmacies

April 2020 DRUGSTORENEWS.COM

for decades. In fact, Anthony Fauci, a key adviser to President Trump and a member of the White House Coronavirus Task Force, began his healthcare career in Brooklyn, N.Y, delivering prescriptions for his pharmacist father. Community pharmacists are helping each other innovate and safely serve their respective patients, sharing — via a daily newsletter feature we call “Members Helping Members” and with CPESN USA — their best practices on pharmacy workforce and patient protection, pharmacy workflow strategies, and patient communication. As availability of novel coronavirus tests and the versatility of tests expands, it would be to everyone’s benefit for community pharmacies to be able to serve as testing sites and to give point-ofcare tests. Similarly, once a vaccine is developed, independent pharmacies are perfectly positioned to mass immunize, just as we can provide up-to-date influenza and pneumonia vaccinations to prevent co-occurring disease. Independent pharmacies are willing and proud to meet these needs. Pharmacists are on the front lines of this crisis, and in many places, they are the only accessible healthcare providers. The more than 21,000 independently owned pharmacies are a safety net for their communities, and they’re now in overdrive, working to keep their friends and neighbors safe and educating patients about the latest developments in the fight against the coronavirus. They are heroes to me and countless others for their contributions to patient care. Transforming the healthcare payment system and maintaining the safety net that is community pharmacy is more needed and glaring now than ever before. As part of a robust response to the coronavirus crisis, the government is tapping into the capabilities of community pharmacy. Eliminate administrative burdens restricting patient care, develop a sustainable reimbursement structure, and empower pharmacies to practice at their full scope, and the community pharmacy safety net can continue to be there for patients during times of both calm and crisis. dsn


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CRISIS TALK

Keeping the Supply Chain Strong Supporting pharmacies and safeguarding the pharmaceutical supply chain amid the COVID-19 pandemic By Erin Horvath

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he essential role of pharmacies and providers has been heightened as the world grapples with the novel coronavirus COVID-19. That’s why pharmaceutical distributors, a vital link in the supply chain, are laser-focused on preserving access to medications and creating the right long-term solutions. Now more than ever, pharmacists and providers must understand how distributors are protecting the supply chain and contain the spread of COVID-19.

Erin Horvath, president of distribution services, AmerisourceBergen

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Product Access

As this pandemic evolves, distributors are consistently soliciting inventory updates from manufacturers and replenishment teams are monitoring ordering activity from customers, which include pharmacies, providers and health systems. When necessary, distributors will place allocation-driven safeguards around certain products. For example, AmerisourceBergen has taken action to allocate and increase inventory on items related to the care, treatment and prevention of COVID-19. This action included such products related to respiratory illnesses as inhalers to antivirals and antipyretics to cough-cold OTC and isopropyl alcohol. These fair-share allocation programs protect high-demand products to ensure continued availability and reduce instances of well-intentioned customers overstocking products due to fear of shortages. It’s important for pharmacies and providers to understand that it is more effective to increase inventory at the distributor level, rather than at sites of care themselves, so that resources can be distributed appropriately and in accordance with patient needs. Distributors are also collaborating with manufacturers to lift inventory across the board and safeguard access to critical medications. This includes products like IV fluids, generic injectables and acute care supplies. Distributors’ efforts have allowed pharmacies to place orders later at night and still receive the shipment the next morning. As pharmacies shift how they interact with patients, distributors are helping accommodate such longer-term fills

April 2020 DRUGSTORENEWS.COM

as 90-day prescriptions as opposed to 30-day and supporting contact-free home deliveries.

Business Continuity Plans

Pharmacies are often one of the first points of care during a health crisis, so distributors must have business continuity plans in place. In emergencies, distributors are prepared to work closely with industry peers and government agencies to continue fulfilling life-saving medication deliveries. For example, during Hurricane Maria in 2017, distributors collaborated with governmental and healthcare leaders to map out logistics, secure travel clearances and coordinate fuel deliveries. Should COVID-19 lead to issues of this nature, distributors are prepared to follow similar procedures to ensure the supply chain remains operational and secure.

COVID-19 Containment Measures

Knowing every shipment contains products that will eventually meet a patient — many of whom have underlying conditions that make them especially vulnerable to COVID-19 — product distribution centers across the globe are taking extra measures for cleanliness. Facilities are stocked with Clorox wipes and are sanitized with powerful EPA-approved disinfectants, such as Shockwave and BruTab 6s, two to three additional times per day through backpack or handheld electrostatic sprayers and standard spray canisters. DCs have also increased screenings for visitors, couriers and partners, and are temporarily barring visitation from all nonessential vendors. Additionally, all drivers are adhering to World Health Organization guidelines for protective clothing and arranging for contact-free deliveries or pickups to pharmacies whenever possible. As the entirety of the healthcare system battles this global pandemic, sustained collaboration across the supply chain is crucial. With an understanding of the efforts distributors are taking to protect access, pharmacies can leverage their position in communities to reassure patients that medicines will be where and when they need them, consistently and reliably. dsn


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An excellent example of one of these manufacturing shifts is SmileDirectClub™, a direct-to-consumer (DTC) company specializing in teledentistry. The team at SmileDirectClub recognized the need for additional supply of PPE as the pandemic began spreading across the world and wanted to assist. After researching design plans, they shifted many of their industrial 3D printers from creating invisible teeth aligners to producing face shields and masks to donate to the medical community. WestRock partnered with SmileDirectClub by donating materials and thermoforming the face plate of the shield, and will also assemble the finished product at its Martinsville, Virginia facility. Together with its customers, WestRock is a critical part of the global supply chain and is privileged to play a small role in helping its customers ensure that not only consumers, but those on the front lines of COVID-19, can receive the products they need. WestRock would like to extend a heartfelt “thank you” to brands around the world for making a meaningful difference during these complex and challenging times. For more information about WestRock, visit www.westrock.com.


PHARMACY | STATE OF THE INDUSTRY

Snapshot of the Industry DSN reached out to executives from pharma companies, as well as tech and automation providers, to assess the state of the pharmacy business and where it’s headed By Sandra Levy

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as the pharmacy counter ever been more important to retail? With the coronavirus crisis continuing to mount and consumer concerns growing about how they can best protect themselves and their

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families, the pharmacist has become the first line of defense and offense for retail. While a profit center and traffic builder for retailers that include a pharmacy counter in their stores, the section also has become a beacon of hope and need for many consumers.

DSN asked several company executives to describe the state of the pharmacy business and discuss how they are helping pharmacies and pharmacists overcome the enormous challenges they are facing, as well as how they view the future.


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PHARMACY | STATE OF THE INDUSTRY

John Dillaway

EXECUTIVE VICE PRESIDENT Ascend Labs | Parsippany, N.J.

Drug Store News: How would you describe the current state of pharmacy? The state of pharmacy currently is difficult. Manufacturers spend billions on research and development, and generic companies spend millions developing off-patent medications before a single pill is sold. Pharmacies buy these medications up front, anticipating need; they hire pharmacists and build stores or outlets from which these medications can be dispensed. Both of these levels of pharmacy incur significant overhead costs, and yet all we hear is that prices are too high. Pharmacy does a poor job pointing out the benefits of its products and services in terms of saving and prolonging life, and avoiding more costly medical procedures. DSN: What is the greatest challenge for pharmacies and pharmacists? Staying viable in the face of all the current challenges. More and more is being demanded of pharmacy each day, yet less and less is willing to be paid.

Drug Store News: How would you describe the current state of pharmacy? We are seeing a lot of focus on costs. We think the real focus should be on patient services. The smaller pharmacies that are really successful are focusing on convenience for the customer, and they are beginning to add services, such as health food stores and clinics. We know of one pharmacy that is putting dieticians on staff. The goal is to create holistic health access.

William Sieber PRESIDENT Bavis Drive-Thru | Cincinnati

DSN: What is the greatest challenge for pharmacies and pharmacists? The new challenge is to provide this genuine holistic focus, not only to get the customer in the store to pick up prescriptions and pick up a few small items, but to truly focus on their healthcare needs. DSN: How does your company help to meet the challenges of pharmacy? We are focusing on making sure our products provide the highest quality customer service, while simultaneously engineering products that last. Bavis Drive-Thru customers enjoy

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DSN: How does your company help to meet the challenges of pharmacy? We try to offer generic alternatives at costeffective prices that will offer savings to patients, yet allow the company to reinvest in additional technologies to continue this mission. Without the financial wherewithal to grow, companies will ultimately fail and the market will be left with fewer companies, which will hurt the market’s competitive position, or it will lose companies capable of bringing additional molecules to market that cure or treat those in need. DSN: How do you view the state of pharmacy going forward? The market has struggled for decades with reimbursement strategies. Clearly, more thought is needed to develop a system that provides both fair compensation for products and service, as well as incentives for people to enter and invest in new life-saving products and technologies.

fewer costly service calls and less downtime. We offer systems, such as the Captive Carrier TransTrax, that offer far greater capacity than pneumatic systems. In the drive-through, our carriers are large enough for pharmacies to send adult incontinence pads, OTCs and pharmaceuticals, and to provide customers with one-stop shopping. Our second drivethrough lane system is pharmacy specific and offers tremendous capacity. Most pharmacies will have multiple prescriptions to fill for one customer, and all of those products will fit in our carriers. DSN: How do you view the state of pharmacy going forward? There is a need to provide customers with convenience. Some argue that grocery chains are going one step further than the drive-through by taking baskets out to customers in the car; that’s great, but the average retail pharmacy wants to keep labor to a minimum. Again, the holistic approach to health care and the products that create convenience to the customer will solidify the customer-brand relationship.


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PHARMACY | STATE OF THE INDUSTRY

Ron Cerminaro DIRECTOR OF COMMERCIAL STRATEGY AND OPERATIONS Camber Pharmaceuticals | Piscataway, N.J.

Drug Store News: How would you describe the current state of pharmacy? Pharmacy continues to be an integral part of the healthcare ecosystem that significantly reduces healthcare costs much more than most people realize. The accessibility of a healthcare professional to communities in a variety of settings, as well as prevention and cure of diseases by dispensing generic pharmaceuticals, has a positive economic effect on healthcare spending in many ways, such as reducing the number and length of hospital admissions, preventing adverse drug events, and providing low cost vaccination services. DSN: What is the greatest challenge for pharmacies and pharmacists? There are several major challenges for pharmacies and pharmacists, which include financial, operational and supply chain issues. Camber is well-positioned to mitigate supply chain issues relating to drug shortages and product quality. DSN: How does your company help to meet the

Drug Store News: How would you describe the current state of pharmacy? Pharmacies have established themselves as the most accessible, most visited and most trusted healthcare setting. Combined with technological advancements and an expanding area of clinical services, this creates significant opportunities to reinvent themselves to serve their communities in ways that can inoculate them against market forces.

Tom O’Neill PRESIDENT AND CEO Cognivue | Victor, N.Y.

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DSN: What is the greatest challenge for pharmacies and pharmacists? Pharmacists live in this great interchange between physicians and patients. The opportunity is there for deeper understanding and deeper engagement with their patients and medical providers. The challenge is to identify, invest in and pursue avenues that will create these deeper, richer relationships that will build enduring value. Providing clinical services can do just that.

challenges of pharmacy? We work diligently to provide an uninterrupted supply chain and offer unsurpassed product quality. Major investments continue to be made to eliminate manufacturing variables and establish total control over these areas, from key starter molecule development to active pharmaceutical ingredient production, through finished goods manufacturing. Camber now has manufacturing sites in India and the United States, and we are more than tripling our distribution warehouse capacity at our new headquarters to increase safety stock for existing customers and increase throughput capacity for new business growth. DSN: How do you view the state of pharmacy going forward? As the population continues to age, pharmacy will become increasingly important to a greater percentage of people. Reliable supply of quality pharmaceuticals will be the key to affordable and sustained health for those with comorbidities and multiple prescriptions.

DSN: How does your company help to meet the challenges of pharmacy? Cognivue Thrive provides pharmacy the opportunity to easily expand their clinical services when it is most needed. Cognivue Thrive makes regular cognitive screening at the pharmacy possible with its five-minute self-administered computerized cognitive screening device that is based on the same FDA-cleared technology used by neurologists. The Thrive device folds up like a laptop and weighs only 8 lbs., so it can easily be used wherever screening is needed. DSN: How do you view the state of pharmacy going forward? In the new value-based healthcare system, where pharmacies and medical providers are being rewarded or penalized by patient outcomes, we see community pharmacists as one of the cornerstones in the healthcare ecosystem. The trust from their community, their access and their provider relationships will be critical components in improving patient outcomes


PHARMACY | STATE OF THE INDUSTRY Drug Store News: How would you describe the current state of pharmacy? The state of pharmacy is really in turmoil because of the lack of reimbursement, and there not being a focus on what the pharmacist brings to the table in terms of their expanding role and reimbursement for additional services.

Sandra Canally FOUNDER AND CEO The Compliance Team | Spring House, Pa.

Chad Baker SENIOR VICE PRESIDENT OF MARKETING FlavoRx | Columbia, Md.

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DSN: What is the greatest challenge for pharmacies and pharmacists? Taking them from their current state of concentrating on dispensing and filling scripts to more patient-oriented tasks and clinical services that they provide to patients in their community. The state of pharmacy is going towards value-based care, which is concentrating on the quality of what they provide and getting reimbursed for those additional things that can keep the patient out of the emergency room and from hospital readmission. With the expanding role of pharmacists gaining provider status in a lot of states, it’s really where pharmacies need to go.

Drug Store News: How would you describe the current state of pharmacy? If customers are making the trip to a pharmacy, they expect more value from that trip. It is no longer good enough to be a pharmacist who excels at counting pills and verifying prescriptions. The role of the pharmacist is expanding dramatically. Retail pharmacy has never been a stagnant industry, at least not in my 18-plus years of involvement. But the pace of change, and the willingness of all involved to make that change happen, is exciting to see and be a participant in. DSN: What is the greatest challenge for pharmacies and pharmacists? First and foremost, pharmacies must evolve to stay relevant. In an age where consumers can increasingly get all their medications — and all their goods for that matter — without leaving their front door, how do you convince someone that going to a pharmacy is worth the trip? The idea that your local pharmacy can be a healthcare destination, with a multitude of services designed to get and keep you physically and mentally well, is super interesting and appears to be a winning approach.

DSN: How does your company help to meet the challenges of pharmacy? Our models include the patient-centered pharmacy home, telepharmacy, and a consultant role in long-term care in which they can provide immunizations, MTM, and help manage residents’ medications more effectively. Accreditation provides standardization and streamlining of operations that is beneficial to day-to-day practices within the pharmacy. DSN: How do you view the state of pharmacy going forward? It’s all about taking pharmacies from just filling scripts to value-based care. If they can identify the population they are serving and keep those patients out of the ED or readmission, there will be better outcomes and lower costs for healthcare entities, payers and referral sources overall, and that’s where the monitoring, the data collection, and working with an accreditation organization comes into play. We act as their partner in taking them where they need to go.

DSN: How does your company help to meet the challenges of pharmacy? We began with the idea that yucky-tasting kids’ medicines should be more palatable, so kids will take them. While making medicine taste better continues to be a focus of ours, we’ve found that the simple act of choosing the taste of a child’s medicine is as powerful, in terms of impact on adherence and the customer experience, as the taste of the medicine itself. We’ve put a lot of time and effort into making the flavor selection process fun for kids, so they feel empowered and have a sense of ownership of their own wellness. DSN: How do you view the state of pharmacy going forward? We’ll continue to see tremendous innovation in retail pharmacy, with an eye towards meeting more and more of the healthcare needs of patients and customers, and doing so in a way that helps everyone in our great nation live happier, healthier lives. The great news is the right people are leading the charge. The leaders in our industry are bright, dedicated, competent people who will lead this industry to places we never could have imagined a decade ago.


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PHARMACY | STATE OF THE INDUSTRY

Matt Horton

SENIOR DIRECTOR OF STRATEGY AND FRANCHISE ADMINISTRATION Health Mart | Las Colinas, Texas

Drug Store News: How would you describe the current state of pharmacy? There are many challenges facing pharmacists, including declining reimbursement, narrower PBM pharmacy networks, and new entrants targeting specific patient populations. However, I also hear, and believe, that it is a time of great opportunity for the forward-thinking pharmacist. Pharmacists play a critical and trusted role in their patients’ lives. As the healthcare industry evolves toward a value-based care world with a greater emphasis on keeping patients healthy, pharmacists will have more opportunities to impact their patient’s health and be recognized for improving patient outcomes. DSN: What is the greatest challenge for pharmacies and pharmacists? I was talking to a pharmacy owner the other day, and she told me that she is earning about half as much as she did per script as she did when she started just a few years ago. The reimbursement challenges and confusing reimbursement rules from payers, including DIR fees, has meant more pharmacists spending more time on activities outside of taking care of patients and evolving their practice. Drug Store News: How would you describe the current state of pharmacy? One of the industry’s primary goals is to empower our pharmacists to spend more time engaging patients and less time with third-party authorization issues and prescription fulfillment. Their role must evolve to being more clinically focused and delivering a range of patient services, such as immunizations, MTM and disease state consultation.

Marvin Richardson

CO-PRESIDENT Innovation | Johnson City, N.Y.

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DSN: What is the greatest challenge for pharmacies and pharmacists? With concerns of demanding working conditions, we believe it’s vital that the industry improve pharmacies’ work environments. Staffs need to be able to fill acute prescriptions safely, have ample time to perform all related workflow tasks, and be free to counsel patients. By moving to a centralized model that reduces the pharmacy dispensing workload, chains can accelerate the repositioning of their pharmacists as care providers and offer more impactful clinical and wellness services.

DSN: How does your company help to meet the challenges of pharmacy? Health Mart is focused on supporting pharmacists so they can spend their time where it counts: building relationships with and delivering high-quality care to patients. For instance, Health Mart pharmacies saw nearly 40% growth in on-site injections and immunizations in 2019. Also, through Health Mart’s partnership with the Department of Health and Human Services, many Health Mart independent pharmacies have committed to donating their dispensing services to support Ready, Set, PrEP. DSN: How do you view the state of pharmacy going forward? For the past decade, the growth of independent pharmacy has been relatively flat with about 20,000 independent pharmacies, while overall retail locations are declining. This just means that there is room for independent pharmacies to introduce patients to their pharmacies’ solutions and personalized care that other pharmacies can’t provide. Independent pharmacies need to evolve with industry changes, and I’m excited and optimistic for the future of independents and the growing role of the independent pharmacist. DSN: How does your company help to meet the challenges of pharmacy? Our PharmASSIST Symphony for High Volume platform serves as the adaptive brain of our high-volume systems. Symphony’s use of AI and machine learning constantly adjusts to the alterations in workflow caused by changes in customers’ prescription demand. Through this continual optimization, our customers can tightly manage their sites, enabling them to achieve their throughput, cost-reduction and patient safety goals. DSN: How do you view the state of pharmacy going forward? The transformation of pharmacists to patient care providers is one of the keys to our future success. Centralization of prescription fulfillment is on the rise and for good reason. From our customers’ experiences, the chains are now embracing how the centralized model leads to numerous cost reductions, process improvements, and a measurable return on investment. Most importantly, it’s helping to free pharmacists and staff to engage patients in a more meaningful and impactful way.


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PHARMACY | STATE OF THE INDUSTRY

Lari Harding

VICE PRESIDENT OF CLIENT DEVELOPMENT Inmar Intelligence | Winston Salem, N.C.

Drug Store News: How would you describe the current state of pharmacy? Bifurcation is causing pharmacy operations and financial management to evolve. On one branch you have complex patients with multiple chronic conditions requiring more services. Medication adherence is a driver in reimbursements, and these patients need easier access, more affordability, friendly regimens and a proactive approach to managing all their blockers. If they are adherent to the right medications, their outcomes will improve and it will lower total healthcare costs.

prescription data and receivables for one-third of all pharmacies in the United States, while managing more than 80% of prescription returns nationwide with supporting safety and compliance solutions. We also operate media networks that optimize consumer engagement. Inmar provides the needed “horsepower” through reconciliation, collections, contract management, performance analytics, price optimization, cash Rx revenue recovery, and pharmacy-friendly prescription discount cards.

DSN: What is the greatest challenge for pharmacies and pharmacists? The greatest challenge for the industry is finding an effective and efficient way to provide personalized, patient-specific management. Much has been accomplished over the last decade through automation and technology, but managing a different operational process for each patient remains extremely difficult.

DSN: How do you view the state of pharmacy going forward? Those pharmacies that rise to the challenge of concurrently providing a shopper-friendly ecommerce experience, consistently delivering convenience along with expanded services, including immunizations, testing and other primary care, will be those that win over consumers through personalized engagement and care. The flaws that exist in the current payer reimbursement model will become less significant as consumers exercise more decision-making authority and take on more of the financial burden.

DSN: How does your company help to meet the challenges of pharmacy? Inmar Intelligence manages the pharmacy

Brian Sullivan

SENIOR SYSTEMS SALES MANAGER Knapp | Kennesaw, Ga.

Drug Store News: How would you describe the current state of pharmacy? The North American pharmacy market, as well as the global market, is in a significant state of change with a number of unknowns. All pharmacies are under increased pressure with strained margins, regulatory pressures and labor shortages, especially in the technician area. Independent pharmacies are facing the toughest challenges as they don’t have the capital to make the kinds of significant changes that are required to address the current trials. New pharmacy models are coming out with our larger chain customers, as well as our central-fill and mail customers. They are all driven around flexible, scalable solutions that can adjust based on internal plans and outside disruptors. DSN: What is the greatest challenge for pharmacies and pharmacists? Margin erosion and margin uncertainty based on DIR fees, GER fees, rising labor rates and shortages. DSN: How does your company help to meet the challenges of pharmacy? Our ATD-L1P high-speed pill-counting technology

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and KMeD mid- to slower-moving pill counting technologies are allowing central-fill and mailorder pharmacies to reduce their cost per prescription and offset margin erosion. Our integral vacuum technology for pill dust and particle removal allows the pharmacy to address NIOSH 1, 2, 3 medications, whether for USP <800> or for their own internal preferences, in our automated pill counters and at canister replenishment. By doing this, the pharmacies are able to keep more medications in automation, address the new regulations and reduce their costs per script. DSN: How do you view the state of pharmacy going forward? Pharmacy will increase its rate and impact of change going forward. New players are entering the marketplace with different business models. These are definitely disruptors, and we have not seen the full extent of their impact yet. At the end of the day, consumers should expect to get better service and more accurate orders at a lower cost. The pharmacies that provide these most effectively will be the big winners.


PHARMACY | STATE OF THE INDUSTRY

Craig Ford

SENIOR VICE PRESIDENT OF PHARMACY SALES LexisNexis Risk Solutions | Alpharetta, Ga.

Drug Store News: How would you describe the current state of pharmacy? Although the pharmacy’s core responsibility has always been to fill prescriptions, pharmacies have been taking on additional duties, such as direct consultations, vaccine administration, and managing drive-through windows and mini clinics. Pharmacies are playing an increasingly prominent role in a patient’s healthcare delivery through better management of certain conditions and prescription therapies. There’s a significant shift in the industry where pharmacists are viewed as healthcare professionals who can offer high-quality consultations. DSN: What is the greatest challenge for pharmacies and pharmacists? Pharmacists operate in a complex and dynamic prescription therapy ecosystem. Besides the direct prescription verification and dispensing duties and additional healthcare services, pharmacists are tasked with helping thirdparty insurers and PBMs achieve certain levels of quality, leading to better reimbursements. In fact, many PBMs and payers are expecting and requiring pharmacies to improve their patient population’s adherence to medications. Medication adherence measures are also Drug Store News: How would you describe the current state of pharmacy? As the future of pharmacy technology continues to expand past simple workflow tools, pharmacies are beginning to shift their focus to implementing solutions that not only help reduce costs and increase revenue, but also help them address medication adherence, play a more active role in clinical care and improve the overall patient experience.

John Beardsley

SENIOR VICE PRESIDENT OF CORPORATE STRATEGY AND BUSINESS DEVELOPMENT McKesson Prescription Technology Solutions | Las Colinas, Texas

DSN: What is the greatest challenge for pharmacies and pharmacists? Pharmacies face a number of challenges, but one in particular we see technology playing a key role in addressing is adherence. We tend to see three primary reasons causing adherence issues: affordability, ease of access and how the patient feels while on therapy. DSN: How does your company help to meet the challenges of pharmacy? McKesson’s pharmacy technology is focused on enhancing clinical and patient interactions, and the

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incredibly important for STAR ratings and meeting contractual obligations. DSN: How does your company help to meet the challenges of pharmacy? At LexisNexis Risk Solutions Health Care, we strive to provide pharmacists with analytical tools to facilitate a highly productive environment, more individualized patient interactions, and improved patient safety. We do so by enabling real-time verification of prescriber information, ensuring the integrity of patient data and providing unique insights into a patient’s social determinants of health. VerifyRx is a validation tool that allows for a real-time verification of prescriptions within a pharmacist’s workflow to ensure the prescriber data and licensure are accurate. DSN: How do you view the state of pharmacy going forward? A clear trend that will drive the pharmacy’s direction in an upcoming decade is consumerization, which in health care means convenient, on-demand and individualized patient-centered service. Patients are increasingly taking control of their health, including requesting prescription refills or accessing educational and support resources digitally. data needed to support pharmacists in these important clinical roles. With the growing shortage of primary care providers, as many as 44 states now allow some level of prescribing by pharmacists, as well as other nonphysician prescribers. As pharmacies continue to partner with payers in a true value-based model of care, having tools like Clinical Programs Solution, Adherence Performance Solution, and RelayRx Medical Billing by RelayHealth Pharmacy built right in to their daily workflow provides the pharmacist with reporting and documentation to support payer reimbursement. DSN: How do you view the state of pharmacy going forward? Systems that fully integrate with each other across all stakeholders can not only improve workflow communications, but also improve overall pharmacy logistics. Use of these technologies can help raise patient adherence rates, lower overall pharmacy costs, improve quality of care, simplify adjudication, improve patient outcomes, and strengthen the pharmacy’s financial performance.


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PHARMACY | STATE OF THE INDUSTRY Drug Store News: How would you describe the current state of pharmacy? The retail pharmacy industry is experiencing consolidation, cost pressure and intense competition for business. Pharmacies are busy filling prescriptions, with pharmacists responsible for administrative tasks that compete for time that could otherwise be used to provide better patient care, reduce medical costs and improve health outcomes.

Danny Sanchez VICE PRESIDENT AND GENERAL MANAGER Omnicell | Mountain View, Calif.

DSN: What is the greatest challenge for pharmacies and pharmacists? Pharmacists are increasingly doing more with less staff and less time for patient care activities. Additionally, DIR fees, which enable payers to take back payments to pharmacies more than six months after a prescription is filled, are unpredictable, inconsistent and outside of a pharmacy’s control. The result of a loophole in Medicare regulations, DIR fees increased by 45,000% between 2010 and 2017, according to CMS. DSN: How does your company help to meet the challenges of pharmacy? Omnicell is committed to transforming the care

Jeffrey Swanson HEAD OF RETAIL SALES Pharma Logistics | Libertyville, Ill.

Drug Store News: How would you describe the current state of pharmacy? On the retail and independent side, it still really comes down to pharmacies looking to do more with less. How do they increase their profitability when they know reimbursements are going down, and the costs of employment are going up? They are asking, “How do I work in an industry now where everything seems to be working against them?” At the end of the day, they are trying to understand to maintain the level of service their patients are accustomed to and operate within a market that allows them to expand and still hit their goals. DSN: What is the greatest challenge for pharmacies and pharmacists? PBMs and their reimbursement practices, along with challenges CMS has created with short cycle fills and not getting reimbursed for that work. An adherence program is good for the patient, but having to fill the script two times a month instead of once a month when the reimbursement is based off once a month or more is difficult.

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delivery model for pharmacies and the patients they serve. Omnicell’s Population Health Solutions division offers technology-assisted medication management tools, robust data analytics and a multichannel intelligent communications platform — all designed to promote more effective engagement, more efficient service delivery and higher quality care, resulting in improved population health outcomes. Some of our latest innovations include our new Opioid Mitigation Solution, which assists pharmacies with identification of patients at high risk of opioid overdose and supports naloxone codispensing to improve patient safety. DSN: How do you view the state of pharmacy going forward? We see tremendous opportunity for technology to drive transformation of pharmacist-patient engagement. Our portfolio of medication management offerings is constantly growing thanks to our great pharmacy and health plan partners, the talent and innovation of our internal teams, and the front-line pharmacists who make a difference every day in the lives of patients and the communities they serve.

DSN: How does your company help to meet the challenges of pharmacy? We focus on helping customers with reverse distribution, and through that process inventory management. By helping them understand their inventory levels, and waste management, they can make better upfront buying decisions, impacting credit collection and waste reduction. Most importantly, we ensure they receive the credit that is due to them for those products that are being returned. Our Rapid Credit program accelerates credits to pharmacies and gets them paid with one check within 14 days of processing that inventory at our warehouse versus multiple checks over the course of a year from other reverse distributors. DSN: How do you view the state of pharmacy going forward? Pharmacies are operating on such slim margins, but have to keep up with ever-changing technology and compete on a different scale than ever before. They have to change their current behavior of accepting credits that trickle in. They need cash in hand to make better decisions that will impact their business and cash flow downstream.


Upsher-Smith Laboratories, LLC is a U.S. pharmaceutical company that strives to improve the health and lives of patients through an unwavering commitment to high-quality products and sustainable growth. With a heritage in generic medications dating back to 1919, we bring specialty generics as well as branded prescription migraine and seizure medications to a wide array of customers, backed by our award-winning attentive service, strong relationships, and consistent supply.

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Do More GoodTM means that, together, we seek to deliver the best value for our stakeholders, and most importantly, do more to improve the lives of the patients we serve. Do More Good is a trademark of Upsher-Smith Laboratories, LLC. Upsher-Smith Laboratories, LLC, 6701 Evenstad Drive, Maple Grove, MN 55369 Š 2020 Upsher-Smith Laboratories, LLC PM-000738.01

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PHARMACY | STATE OF THE INDUSTRY

Farah Madhat

EXECUTIVE VICE PRESIDENT OF THE PHARMACIST PROVIDERS BUSINESS UNIT PrescribeWellness, a Tabula Rasa HealthCare company | Irvine, Calif.

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T A B U L A

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C O M P A N Y

Mike Coughlin PRESIDENT AND CEO ScriptPro | Mission, Kan.

Drug Store News: How would you describe the current state of pharmacy? Pharmacies across the United States continue to face complex challenges, such as declining margins, rising DIR fees, and the prevalence of adverse drug events due to shortage of time and workflow resources. Despite these difficulties, pharmacies continue to be the most accessible wellness destination for patients, thereby establishing the pharmacist as the most well-positioned provider in the healthcare continuum. DSN: What is the greatest challenge for pharmacies and pharmacists? The single greatest challenge faced by pharmacists across the nation is the increasing burden of DIR fees. Industry demands continue to crush profits as steep clawbacks are exerted when certain performance measures are not met. DSN: How does your company help to meet the challenges of pharmacy? Technology-enabled services provided by Tabula Rasa HealthCare’s patient relationship management solution provider, PrescribeWellness, help Drug Store News: How would you describe the current state of pharmacy? Pharmacy is more important than ever in the overall health system from many standpoints. With regard to patient outcomes, the pharmaceutical industry has been amazingly responsive to the needs of people, especially with complicated diseases. If you look at HIV and AIDS, they’ve been able to unleash their amazing talent to address these diseases. From the monetary side, the world is rewarding outpatient treatments compared to inpatient treatments. From a financial standpoint and patients’ outcomes, pharmacy is leading the way in health care. DSN: What is the greatest challenge for pharmacies and pharmacists? The greatest challenge is realizing the value of pharmacy because a lot of money is spent in health care, and it’s an incredibly convoluted space as far as getting paid. A lot of players are trying to get a piece of the action, and the patients and the providers many times get lost. DSN: How does your company help to meet the challenges of pharmacy?

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streamline operations to ensure pharmacies are capitalizing on enhanced patient care and revenue opportunities. Through PrescribeWellness’ single software solution, CompleteCare, comprehensive engagement services — including multichannel patient communications (twoway texting, IVR and more), medication alignment and Part D plan reviews — elevate the role of the pharmacist to ensure optimal business performance and patient retention. To alleviate challenges associated with limited time and resources, PrescribeWellness’ VRxAssist service offers clinical, operational and marketing support to drive patient engagement. DSN: How do you view the state of pharmacy going forward? As Americans look for more convenient ways to manage their health, the role of the pharmacy within a patient’s healthcare journey continues to expand. In fact, on average, a patient visits their pharmacy more than 30 times a year. Through the advent of science-backed technology solutions, pharmacies are better positioned than ever to impart actionable and effective care. We provide the complete spectrum of products, a whole end-to-end system to meet pharmacies' needs. I started at the company 25 years ago to develop a robotics system to keep pharmacies from making errors. That has evolved into a comprehensive solution for running a pharmacy. Our customers have asked for more help because pharmacy is an incredibly complicated business. We try to help pharmacists’ efforts with systems that are as easy as we can make them to work with so they can really use their skills. DSN: How do you view the state of pharmacy going forward? What’s becoming more important is understanding people and what their medical and societal problems are. How do you manage the need of the patients to get the medications, to use them properly and, if the medications don’t work, how do they deal with that? Pharmacy has a very bright future and a very challenging future. It also has people who are excited about it and working very hard, whether it’s in research labs or in patient- facing functions. They are doing marvelous things.


Drug Store News: How would you describe the current state of pharmacy? No one becomes a pharmacist because they love paperwork. Pharmacists don’t want to double as health insurance specialists or medical claims researchers. They’re problem solvers and advocates and care givers driven by compassion and science and the desire to provide high-quality healthcare services. They are members of their community with a passion for counseling neighbors, so that they might live and feel better.

Ken Whittemore Jr. VICE PRESIDENT OF PROFESSIONAL AND REGULATORY AFFAIRS Surescripts | Arlington, Va.

Brad Horst

SENIOR DIRECTOR OF SALES FOR EASTERN USA Synergy Medical | Longueuil, Canada

DSN: What is the greatest challenge for pharmacies and pharmacists? You can hardly open a newspaper or news feed without reading about the high cost of prescription medications. This creates an incredible challenge for pharmacists. They are at hand at that moment in time when the patient or caregiver is presented with a medication they can’t afford for a therapy that they really need. Additionally, time is extremely important in the pharmacy. Pharmacists are constantly expected to execute on multiple tasks quickly, efficiently and accurately.

DSN: How does your company help to meet the challenges of pharmacy? Since 2009, Surescripts has reduced the cost of e-prescribing for pharmacies by 70% even while the cost of health care overall has continued to rise. And, since 2016, we have driven a 64% improvement in the accuracy of many aspects of the more than 5 million electronic prescriptions we process each day. This increase often eliminates timeconsuming faxes and phone calls, helps optimize time to therapy, reduces the risk of adverse drug events, and avoids confusion for prescribers, pharmacists and patients. DSN: How do you view the state of pharmacy going forward? Over the next few years the state of pharmacy will continue to change, perhaps tremendously. Sticker shock at the pharmacy from the costs of prescriptions has been a major issue. This cost factor has been documented many times as contributing to medication nonadherence and therapy failures. Real-time prescription benefit tools will empower pharmacists by enabling them to provide lower-cost alternatives to patients at the counter.

Drug Store News: How would you describe the current state of pharmacy? We see many pharmacy owners focus on consultative and adherence programs as they continue to battle low reimbursements and DIR fees in retail pharmacy. Many pharmacy owners are looking at ways to enhance their med sync programs by offering specialty packaging for those patients who are nonadherent to their medication regimen or have a complex medication regimen of five or more meds. This type of program allows the pharmacist to focus more on patient outcomes and aids in the reduction of healthcare costs associated with nonadherence.

Manual blister packaging is a very laborintensive process. Many manual-fill sites tend to chase volume with manpower and add more labor costs as the number of blister patients grow. This fill process can be prone to errors when rapidly trying to fill blister packaging. SynMed is the market leader in blister automation with over 500 systems deployed throughout North America and Europe. SynMed automation enables pharmacy owners to scale and ramp up blister packaging safely with the precision and accuracy of the patented pick-and-place technology in the SynMed XF and SynMed ULTRA.

DSN: What is the greatest challenge for pharmacies and pharmacists? The greatest challenge for a pharmacy is making sure a patient is adherent to their medication regimen. Patients who are nonadherent to their medication regimen will continue to have health issues and will dramatically affect both pharmacy and payers’ bottom line.

DSN: How do you view the state of pharmacy going forward? I see the market shifting from dispensing the traditional vial to offering blister packs to many more patients. It is widely published that the United States has a $300 billion annual cost of medication nonadherence. This will push pharmacies to take a look at their med sync program and offer an enhanced adherence program with specialized packaging outside the traditional vial.

DSN: How does your company help to meet the challenges of pharmacy?

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PHARMACY | STATE OF THE INDUSTRY Drug Store News: How would you describe the current state of pharmacy? We see a trend towards smaller pharmacies, and it will be important for architects and designers to utilize every inch of the pharmacy as efficiently as possible. To accomplish this, pharmacy fixturing will need to be not only durable, but versatile enough to accommodate the increase of future prescription items.

Bill Bender

VICE PRESIDENT OF SALES AND MARKETING Uniweb | Corona, Calif.

Mike McBride VICE PRESIDENT OF PARTNER RELATIONS Upsher-Smith Labs | Maple Grove, Minn.

DSN: What is the greatest challenge for pharmacies and pharmacists? The need for pharmacies to be versatile as they change their footprint, workflow and ergonomics. DSN: How does your company help to meet the challenges of pharmacy? My suggestion is to design for the future so the pharmacy doesn’t become obsolete in a year or two, and versatility of pharmacy fixturing, such as the Uniweb system, will help accomplish this. We provide a durable and versatile pharmacy shelving system. This versatility is important as

Drug Store News: How would you describe the current state of pharmacy? The first word that comes to mind for me is pressured. Whether you are an independent retail pharmacist trying to stay afloat or a generics company like Upsher-Smith trying to manufacture high-quality products amidst strong downward pricing pressures, we are all operating in an increasingly constrained market with tough margins and little room for error. At generics companies, just as in community pharmacy, we’re seeing closings and other disruptions. A number of multinational generic firms are shuttering facilities, reducing headcounts and eliminating products. Three or four super buying powers are pushing prices to new lows, and some manufacturers are simply pulling back or out altogether. There’s no point in making a product when the market simply won’t support it, and we are going to see even more drug shortages and disruptions in the supply chain as a consequence, unfortunately. DSN: What is the greatest challenge for pharmacies and pharmacists? The greatest challenge for today’s pharmacies and pharmacists is innovating for this new era healthcare model, while simultaneously coping with the

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pharmacies change their footprint, workflow and ergonomics. Most pharmacies’ shelving fixtures are based on a slotted upright design with 3- and 4-in.-long shelving that snap into the slotted fixture. As pharmacy inventories grow, the shelving needs to be repositioned to accommodate the growing inventory. To do this with typical shelving, you need to remove the product from the shelf, unsnap the shelving from the fixture, snap the shelving back into the fixture then replace the product. Uniweb pharmacy shelving is only 17 in. long and can easily be repositioned, based on our 1-in., on-center slot wall design, without the need to remove any product. DSN: How do you view the state of pharmacy going forward? With the continued approval of new drugs and the aging population, pharmacies will continue to play a valuable part in the healthcare industry. We also see increases in offsite fill centers playing a valuable role.

pressures of the current model and competition from low-touch, lower-cost pharmacy models that don’t have a community presence. DSN: How does your company help to meet the challenges of pharmacy? Pharmacists know they can trust Upsher-Smith to deliver consistently high-quality medications that are cost effective for patients. Pharmacists also know they can rely on our supply chain. Finally, we have outstanding support programs for patients that are easy to use and that can offer significant savings. DSN: How do you view the state of pharmacy going forward? Patients are going to have a lot more choices about where they fill their prescriptions that have little to do with cost. About 86% of all prescription volume is generically dispensed, and the Association for Accessible Medicines tells us that more than 90% of generics have a copay of less than $20, which is affordable for many Americans. These patients should be able to go wherever they want to fill these prescriptions. Community pharmacies must establish a need for more high-touch services, so patients insist upon a level of care that only these pharmacists can provide. dsn


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PHARMACY | COUNTER TALK

Stepping Up In unprecedented times, pharmacists are a vital resource By Sandra Leal

P Sandra Leal, president-elect, the American Pharmacists Association, and executive vice president of health plans and payers division, Tabula Rasa HealthCare

harmacists have been known to be some of the most accessible providers. The current pandemic has highlighted even more that access to care is pivotal for people looking for answers, reassurance, education and care. Pharmacists are stepping up in unprecedented ways to help fill the needs of patients at their own personal risk. All frontline providers are experiencing concerns around accessing personal protective equipment, dealing with drug shortage concerns, and misinformation that is flooding social media. Despite this, pharmacists are trying to help mitigate some of the concerns that are being experienced in the front line. There is tremendous opportunity to leverage the role of the pharmacist as some states have already done. Kentucky and Florida, for example, have signed executive orders to expand the role of the pharmacist to combat COVID-19 and certain conditions. As this pandemic continues, institutions that are having to manage COVID-19 can utilize pharmacists to help manage patients in different ways.

It is up to us to determine what we want the future of our profession to look like. What we do know is that we provide a vital access point. We cannot dismiss the incredible role that pharmacists play in society. Aside from assisting with screening, education and treatment of COVID-19 patients, institutions can leverage pharmacists to manage those with other conditions that still require care. Pharmacists can also help to manage anxiety and depression that are being exacerbated by the current situation, and help offload visits from other providers to make room for those who are most sick. Restriction on telehealth rules are also currently being lifted to aid access, yet the waiver did not expand the list of eligible providers to include pharmacists despite the increased flexibility. Policy changes in response to COVID-19 that are very

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promising include the removal of rural and site limitations. Telehealth services can now be provided regardless of where the enrollee is located geographically and the types of site, which allows the home to be an eligible origination site. It is time to get all hands-on deck and continue to provide resources to patients and providers that are being challenged by unprecedented circumstances. The Food and Drug Administration has also announced that it will not take enforcement action against compounders who prepare alcoholbased hand sanitizers during this pandemic. It is time for pharmacists who are able to dust off some of their compounding skill training at this critical time to fill a necessary need as medical facilities are unable to access sanitizer from vendors. In looking at other countries that experience the surge of COVID-19 cases earlier than the United States, essential services that have continued to be highlighted are pharmacies. In Italy, one of the most overwhelmed countries, all stores except for pharmacies and those selling essentials have been closed to minimize the spread of the virus. On March 18, the Nevada governorâ&#x20AC;&#x2122;s office released a list of â&#x20AC;&#x153;essentialâ&#x20AC;? businesses in the state that are to remain open, with pharmacies being one of them. Pharmacists have to be nimble and institutions that are training pharmacists can also step up to be creative problem solvers at this moment in time. Numerous institutions have closed, are going to online training, and have had to pull their students out of rotation. It is a perfect time to leverage the technology skills of these individuals to figure out how they can best support patients and other providers. It is time to rethink how we have done training to create new opportunities as we move forward. When this has all passed, we will remember the days before the pandemic and after the pandemic. It is up to us to determine what we want the future of our profession to look like. What we do know is that we provide a vital access point. We cannot dismiss the incredible role that pharmacists and pharmacies play in the fabric of society. dsn


HEALTH | VITAMINS, MINERALS AND SUPPLEMENTS

To Immunity — and Beyond VMS suppliers see immunity boom and continue to focus on innovation By Nora Caley

V

itamins, minerals and supplements are flying off retail shelves, giving retailers and suppliers a moment to cheer, while they collectively scratch their heads and try to keep up with demand. As weary and concerned consumers continue to look for products to help them boost their immune systems due to the ongoing novel coronavirus pandemic, retailers and suppliers report that they are having a hard time keeping up with demand in the VMS category, especially with any product that can give consumers a better piece of mind. “Our immunity products are flying off the shelves,” said Chuck Tacl, vice president of sales and business development at Miami

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Lakes, Fla.-based Mason Vitamins. “Whether it’s vitamin C or echinacea or zinc tablets, it has really increased overall sales and demand. Retailers are replenishing at a far heavier level.” Suppliers are doing their part to push demand, as well as make it easier for retailers to sell product. For example, Mason Vitamins has developed a “Prepare Prevent Protect” theme for its merchandising, with a focus on boosting immunity. These immunity health displays are similar to end caps set up at retailers in August and September, leading up to cough and cold season. The challenge now is to also have the products available for retailers and consumers. “You don’t want to scare people and create anxiety and exploit the opportunity,” Tacl

said. “You want to support the retailer and the consumer, and supply what they’re looking for right now. That’s what’s happening with immunity products with coronavirus.” Other segments, including sleep, also are performing well, Tacl said. Digestive health is gaining momentum as more consumers learn about the microbiome and gut health. Another trend, he said, is that not only are retailers devoting more space to VMS than ever, but they are merchandising vitamins in other areas of the stores, including in beauty and eye and ear care.

Looking for Support

Others agree that during uncertain times, consumers are turning to the VMS category.


HEALTH | VITAMINS, MINERALS AND SUPPLEMENTS

“While immunity is usually seen as a seasonal concern, we think that we will see a shift in consumer behavior towards more year-round total immune support.” —KI MBERLY VI GL I AN TE, SEN I OR VI CE PRESI DEN T OF WHOLESALE SALES AND MARKETI N G, PI PI N G ROCK

“There is increased consumer demand across the board in the vitamins, minerals and supplements category, particularly for immune support products containing vitamin C, elderberry, vitamin D and zinc,” said Bryan Donaldson, executive vice president of sales at West Hills, Calif.-based Pharmavite. “The Pharmavite team is doing everything possible to safely meet that demand so that we can live up to our company values and be there for our consumers through this tough time.” Donaldson said that the company also is seeing increased demand for products in the

sleep category, and Pharmavite will launch products and innovations in that area in the coming months. “There is also continued demand in the areas of stress, brain health and gut health, and gummies continue to be a popular form,” he said. Gummies are much more than popular, said Kimberly Vigliante, senior vice president of wholesale sales and marketing at Piping Rock in Bohemia, N.Y. “Gummies are continuing to fuel category growth with no sign of slowing down,” she said. “Consumers are turning to this delivery form as an enjoyable way to get

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the nutrients they need.” Citing Nielsen data from Feb. 22, Vigliante said that gummies are driving 62% of all dollar growth and now make up 20% of the category. Gummies have been around for years, and today’s consumers want low-sugar options to accommodate dietary restrictions, as well as vegan options for people who don’t want gelatin. Vigliante agreed that immunity is hot right now, as consumers take a proactive approach to their health. There has been a surge in such immune supplements as vitamins C and D, elderberry, and zinc, and the company expects the surge to continue. “While immunity is usually seen as a seasonal concern, we think that we will see a shift in consumer behavior towards more year-round total immune support,” she said. “Additionally, we suspect next year’s cough-cold season will be a strong one for supplements, as more people will likely take a proactive stance to strengthen their immune health and perhaps even start their regimens

earlier and be stricter about compliance.” If consumers do take a proactive stance and decide to buy vitamins, minerals and supplements, retailers should be ready and do more than just have products in stock. “There has been a lot of innovation, but much of it is repetitive, giving consumers too many choices,” Vigliante said. “As manufacturers, we need to simplify solutions for consumers. We need to give them the formulations and trending ingredients they want most, and we need to make it simple so that there is less confusion at shelf.” The way to do that is by educating consumers through merchandising, shelf displays and social media, she said. While gummies have long been a fun way to consume VMS items, chocolate provides another tasty delivery system. Officials at Gresham, Ore.-based Mybite Vitamins said they are redefining the vitamin experience by combining chocolate, peanuts and caramel. “This innovative idea means consumers

can not only look forward to their daily vitamin, but can also enjoy a bite of healthy bliss,” said Kate Jones, president of Mybite Vitamins. “The unique delivery method ensures that the vitamins themselves are safely enrobed in a sheet of delicious chocolatey coating, protecting them from both light and air.” Chocolate, or any new delivery system, can offer additional benefits. “Innovation is the key to not only surprising and delighting consumers, but also accelerating overall category growth,” Jones said. “By looking forward and tapping into new and innovative products, retailers can bring the excitement back to the vitamin aisle.”

Beyond Immunity

While innovation is crucial for the survival of any category, the VMS world faces certain challenges as it expands to meet consumer demands for proactive health. As more products enter the arena, the section

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can be a confusing one for consumers. “Especially in the digital age we live in, where the latest health news is at our fingertips, it’s difficult for consumers to know what they need, whether it’s more vitamin C or biotin,” said Michelle Yoon, brand manager at Olly based in San Francisco. Manufacturers can help retailers by simplifying the VMS category. Olly products have names that include Sleep or Undeniable Beauty, which point to benefits and make the shopping experience easy for consumers. “Olly provides solutions based on consumer needs like better sleep or immune system support versus ingredients like melatonin or elderberry,” Yoon said. Simplifying the aisle and making it easy to shop might become challenging as the category continues to grow. New York-based Reports and Data’s 2019 analysis said the global dietary supplements market was valued at $140.1 billion in 2018 and is expected to reach $216.3 billion by 2026 at a compound annual growth rate of 5.5%. As the category grows, it’s important to maintain product safety. “The biggest challenge is ensuring the quality of dietary supplements,” said John Atwater, senior director of the verification program at U.S. Pharmacopeia. The Rockville, Md.-based organization sets quality standards for medicines, dietary supplements and food ingredients worldwide. “It’s easy for a manufacturer to market a dietary supplement, but there are a lot of risks.” These risks, Atwater said, include source

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materials, supply chain complexities with global supply, and other such factors as transportation practices like shipping a supplement overseas in conditions that are not well controlled in terms of temperature and humidity. “There are a lot of factors a consumer doesn’t readily think about when they go to the store,” he said. “The source of materials, the amount of processing, the lack of compendial standards.” Atwater said that USP Verification Services can help build trust. “If a product is USP verified, both retailers and consumers can trust the quality of the supplement,” he said. “We do that through a multistep process, and all of these steps we do on an annual basis, not a one-time activity.” The verifications involve Good Manufacturing Practice, or GMP; facility audits; product quality control and manufacturing process evaluation; and product testing in USP laboratories. The USP Verified Mark can help manufacturers and retailers with customers who care about quality. “It does highlight the fact their products are high quality,” Atwater said. “It also helps with risk management.” According to the Washington, D.C.based Council for Responsible Nutrition’s 20th CRN Consumer Survey on Dietary Supplements, 77% of Americans said they consume dietary supplements. The 2019 survey reported the majority of both males and females aged 18 years old and older take dietary supplements, which is in line with previous surveys’ findings. Among all

the age groups, adults between the ages of 35 years old and 54 years old have the highest usage of dietary supplements at 81%. One area that garners less attention than immunity and sleep is eye care. Bausch + Lomb is working to change that with its communications efforts. “What we hear from consumers who don’t purchase vitamins and from healthcare professionals who don’t recommend vitamins for their patients is a lack of understanding regarding the benefits vitamins and supplements can provide,” said Chris Marschall, vice president and general manager of U.S. Consumer Health Care at Bausch + Lomb. “Additionally, many shoppers find the vitamin aisle to be confusing and overwhelming, and they don’t understand the differences between all of the different offerings.” Manufacturers can support retailers by educating consumers and healthcare professionals about the benefits vitamins can provide. Bausch + Lomb offers a multifaceted marketing approach that raises awareness and drives trial of its products. The efforts include collaborating with national lifestyle and health news outlets; launching new TV, print and social media ads; and working with eye care professionals and health associations to conduct research about the brand’s products. “As a leader in the eye vitamins category, we are committed to educating those consumers and patients who may benefit from vitamins and supplements, and driving them to the shelf,” Marschall said. dsn


HEALTH | VMS PRODUCTS

Nature’s Bounty Launches Several New Products

Piping Rock Extends Gummies, Women’s Line Consumers are hungry for gummies, according to Piping Rock, so the company launched Nature’s Truth Gummy line, which is low in sugar and has clean formulas that are non-GMO and are free of gluten, common allergens and chemical additives. The formulas feature such trending ingredients as collagen, elderberry and melatonin. In addition to new gummies, Piping Rock debuted Pink, a brand created by the women in the company’s headquarters. Pink is a women’s wellness brand designed for every woman everywhere. With her busy lifestyle in mind, the unique formulations use trending ingredients and include Pink’s Simply Collagen Beauty To Go, Biotin Beautiful gummies, Beauty Rest Melatonin pectin gummies, and Get Up and Go B-12 Fast Dissolves. The company said it is donating a portion of sales to women’s charities.

Olly Adds Softgels Olly is branching out with a new format called Ultra Softgels. The softgel line includes: Sleep, Goodbye Stress, Youthful Skin, Lustrous Hair, Women’s Multi + Omega-3, and Prenatal. The company said creating delightful products is in its DNA, so it was important to have a differentiated experience with the new softgels line. The Ultra Hair softgel includes the additional benefit of copper, which helps with hair pigment and color. The brand also added a slight taste and scent to the line.

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Nature’s Bounty announced three launches related to beauty and stress. Nature’s Bounty Advanced Hair, Skin & Nails has 6,000 mcg of biotin, as well as added vitamins A, C and E. It is non-GMO and comes in strawberry-flavored gummies. Nature’s Bounty Collagen Beauty Blend features a clinically studied dose of highly potent collagen peptides that are readily absorbed and work with the collagenproducing cells in the skin. Combined with the benefits of collagen, Nature’s Bounty offers an innovative formula that the company said is better than just collagen alone. These beauty-boosting collagen peptides help improve skin elasticity and hydration, as well as decrease skin roughness. They are available in vanilla and unflavored varieties, and dissolvable in both hot and cold beverages. The consumer can blend it with a smoothie recipe or mix it well with other such beverages as juice, coffee, tea or water. Nature’s Bounty Collagen Beauty Blend is non-GMO, gluten-free and made with natural flavors/sweeteners. Nature’s Bounty Stress Comfort is a new line of gummies that address a few key stress concerns. The line has three products: Nature’s Bounty Stress Comfort Mood Booster, Nature’s Bounty Stress Comfort Peace of Mind, and Nature’s Bounty Stress Comfort Peaceful Dreams. Nature’s Bounty Stress Comfort Mood Booster is made with gamma-aminobutyric acid, or GABA; saffron; and lemon balm. The wild berry-flavored gummies help calm feelings of stress and promote a positive mood, the company said. Nature’s Bounty Stress Comfort Peace of Mind helps ease mild tension and stress with a mango pineapple supplement packed with marigold extract and passionflower. Nature’s Bounty Stress Comfort Peaceful Dreams includes a combination of such ingredients as melatonin, GABA and lavender. It is meant to help promote a relaxed mind for restful sleep and occasional stress in a blueberry lavender gummy.


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HEALTH | EYE AND EAR CARE

The Eyes — and Ears — Have It As self-care becomes the norm, eye care and ear care can drive more consumers into retail stores By Nora Caley

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urprisingly, consumers do not pay much attention to their eyes and ears — that is until something goes wrong. Then, they cannot find enough products to solve their issues. Now, manufacturers are hoping to change that, and some are launching intense marketing campaigns to help consumers maintain good eye and ear health, as well as offer relief from common issues. These companies are innovating and developing new products that solve problems that not only save consumers a trip to the doctor’s office, but drive these shoppers into stores. According to market research company

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IRI, for the 52 weeks ending Oct. 6, 2019, in U.S. multi-outlet stores (grocery, drug, mass, military, and select club and dollar retailers), sales of ear care products totaled more than $122.8 million, up 5.1% compared with the same period the previous year. Much of that growth came from the ear drops/treatment subcategory, which was up 11.8% to more than $101.3 million. The average unit price for ear drops and treatments is $7.57. The low price and general trend towards self-care are driving consumer interest in these products, according to industry insiders. “If you go to the doctor to get your ears cleaned out, you will

be paying $100 or some level of co-pay, depending on your insurance,” said Mark McGreevy, vice president of business development at Pleasant Prairie, Wis.-based Quest Products. “You can pay less than $10 on any solution in retail, and it works just as well.” While self-care is a trend across all health categories, an emerging trend in ear care is prevention. “Ear care has always been about problem management,” McGreevy said, noting that consumers often end up at the doctor to deal with wax buildup. Now, consumers can use ear cleaning tools daily. Unlike the cotton-tipped swabs that people can misuse and thus damage their


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HEALTH | EYE AND EAR CARE

ears, such new products as earwax tools can help consumers make the shift from problemsolving to hygiene. Quest has introduced Clinere, a line of flexible plastic earwax cleaning tools and earwax removal kits that feature allnatural oil drops. The innovations have helped transform the ear care category into one of daily care, similar to eye care. Just like consumers buy saline solutions and other eye products repeatedly, McGreevy said opportunities exist to get people to purchase ear care products regularly. Consumers not only are beginning to realize they need to take care of their ears, but they are also looking for new, safe methods to do this. “While ear hygiene is important, it is against doctor’s recommendation to clean inside your ears with cotton swabs,” said Yann Pigeaire, vice president of marketing at Similasan, based in Highlands Ranch, Colo. The company recently launched Similasan SeaRinse, which uses purified seawater to cleanse the ears. Pigeaire said SeaRinse cleans deeper than a cotton swab without harming the ears, and can get rid of water trapped from swimming. Shifting the product focus from medical visit to retail is driving innovation in the category, said Marsha Garcia, president of Doctor Easy Medical Products in Orange Park, Fla. “Offering professional-grade products, such as WaxRx, supports the rising consumer demand for self-care, but more profoundly, could decrease the overall cost of medicine in the U.S. by reducing doctor visits for common, often chronic problems such as ear wax impaction,” she said. Doctor Easy’s WaxRx products target ear wax, and its recently launched Earvana Ear Rinse is specifically formulated to soothe dry, itchy ears. “New complaint-specific ear products are allowing consumers to select focused products for the most common ear complaints,” Garcia said. “This new targeted approach to ear complaints is expanding the category for retailers, while addressing consumer concerns.”

Consumer Insights

Ear care has two audiences, industry representatives have often said. Baby boomers and older consumers who wear hearing

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aids suffer from ear wax buildup, so they are considered a prime target for new products. Also, millennials and Generation Z are wearing headphones and earbuds as they listen to their electronic devices, and the gadgets cause wax buildup. These two audiences approach ear care differently. Elyse Dickerson, co-founder and CEO of Fort Worth, Texas-based Eosera, said the biotechnology company conducted extensive research and gained consumer insights about how adults in different age groups maintain ear health. The study involved three cohorts of adults: 25- to 44-year-olds, 45- to 64-year olds, and those 65 years old and older. “Our assumption was the older consumer was the target market,” Dickerson said. “We found they are the smallest potential market. It’s the youngest and middle group that are actively and proactively thinking about ear care.” When asked whether they seek ear care for proactive routine maintenance or only when they have a problem, the oldest segment said they seek ear care only when they have a problem. The youngest group wanted products they could use on a weekly basis to keep their ears clean and healthy. “People who have earbuds are pulling them out, and they always see earwax, and they have more itching,” Dickerson said. The company also asked what type of product consumers would seek for ear care, and how likely they would be to buy this kind

of product if it were available at retailers. Products for itchy ears scored well, with 70% of the youngest group indicating intent to buy, and 50% of the middle group said they would purchase. Interest also was high in products for regular or routine maintenance, such as for cleaning ears, with 70% of the youngest group and 60% of the middle group indicating intent to buy. It’s not just the use of earbuds that is generating interest, Dickerson said, but also such skin conditions as psoriasis and dry skin, as well as allergies, that can exacerbate itchy ears. With these insights, the company launched Ear Itch MD, Ear Itch Nighttime and Ear Clean MD. “Ear care has been one of these overlooked categories,” Dickerson said. “Our goal as a company is to reinvigorate ear care. There is a lot of growth opportunity, and the retailers that are embracing the products are seeing great results.”

Have You Heard?

Some retailers also are embracing hearing tests, partly as a result of the passage of the Over-the-Counter Hearing Aid Act of 2017. Accessibility and affordability of hearing devices are big issues, and according to AARP, only 20% to 30% of adults who could benefit from a hearing aid ever get one. While the FDA is working on its rulemaking for the new category of OTC hearing devices, which will be available in 2020, companies are preparing. One company, iHEAR Medical, offers a


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HEALTH | EYE AND EAR CARE

home hearing test. Founder and CEO Adnan Shennib said sales are increasing as retailers and consumers are both becoming aware of the new option of self-testing at home. “Being the first and only FDA-cleared home hearing test kit gave us the advantage of launching early in the OTC markets last year,” he said. The company also makes personal sound amplification products. Shennib said that the future is very bright as more retail staff, pharmacists and consumers become aware of the new OTC hearing devices. “We are at the infancy stage of hearing products availability in retail stores,” he said. “This is potentially a huge market opportunity, in the range of $2 billion to $10 billion annually at the retail level.”

Seeing Eye-to-Eye

Eye care is a larger category, but sales are growing at a slower rate than for ear care. According to IRI, sales of eye and lens care solutions totaled more than $1.83 billion, which was up 1.9% compared with the same period the previous year. “Eye care is a healthy category,” said Similasan’s Pigeaire. “All segments in eye care have been growing in 2019.” That

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includes red eye, dry eye and sty segments. Some of the same factors that affect ear care sales also play a role in eye care. “The eye drops segment continues to see strong growth in the premium subsegment of artificial tears as the population ages and as people are spending more time on screens, blinking less, which results in dry eyes for more people,” said Joseph Juliano, vice president of marketing at Prestige Brands in Tarrytown, N.Y. Another trend that is driving growth in eye care is that people are looking to reduce redness in order to make their eyes look whiter and brighter. The company offers a variety of such products for this as Redness Relief, Maximum Redness Relief, Cooling Comfort Redness Relief and Traveler’s Eye Relief. “At Clear Eyes, we believe everyone has a unique story behind their eyes, and we celebrate the moments in life when we look and feel our best, when we truly shine,” Juliano said. As part of this promotion, Clear Eyes sponsors Dress for Success Worldwide, a global nonprofit that works to empower women to achieve economic independence through workforce, financial and leadership education.

Another entry in the segment comes from Bausch + Lomb, which makes Lumify redness reliever eye drops. The company said Lumify is the first over-the-counter eye drop developed with low-dose brimonidine tartrate to relieve redness of the eye due to minor eye irritations. “Consumers consider looking and feeling their best to be an important form of self-care,” said Chris Marschall, vice president and general manager of consumer health care at Bausch + Lomb. “Lumify helps promote this by reducing ocular redness to help eyes look whiter and brighter.” The product is so successful, Marschall said, that it has brought new households to the redness reliever category. In the past year, 73% of Lumify purchases were from households that are first-time buyers of redness relievers, and Lumify has a 54% repeat purchase rate from users. Retailers see the value that redness relief products can bring. “We’ve been able to increase foot traffic not only in their eye care aisles, but throughout other areas of the store,” Marschall said. “Because of this new approach, retailers are seeing new purchases come from each section of the store that they haven’t seen before, and we’re also finding that to occur on their digital channels as well.” Also, retailers are expanding their vision centers and providing more vision care services. Consumersalsoarelookingforapreservativefree formula, and Bausch + Lomb offers Soothe Xtra Protection Preservative Free lubricant eye drops. Dry eye is one of the most common eye conditions in the United States that impacts more than 140 million Americans, Marschall said. Many of these consumers report a sensitivity to preservatives in eye drops. Another self-care trend in eye care is the move into the nutritional supplement space. Bausch + Lomb expanded its line of Ocuvite eye vitamins and has been adding products to its eye health lineup. “More and more consumers today have an increased focus on nutrition and look to vitamins to help fill gaps in their diet,” Marschall said. “As this market continues to grow, Bausch + Lomb is committed to providing a variety of ocular nutritional supplement options.” dsn


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HEALTH | NEWS

Vitafusion Undertakes Big Rollout

Jefferies Survey Looks at OTC Shopper Behavior Amid Pandemic Equity research firm Jefferies has taken a look at shopper behavior around OTC products in light of the COVID-19 pandemic. The company’s survey of more than 1,200 shoppers found that a sizable amount of shoppers — many of whom said they or a household member were experiencing flu-like symptoms — turned first to the OTC aisle. Roughly 45% of survey respondents said they bought OTC products in response to or in anticipation of COVID-19, and a quarter of them said that they or someone in their house was exhibiting coughcold and flu-like symptoms. The report said that besides COVID19, the Centers for Disease Control and Prevention has reported a late-season surge in influenza-like illnesses. Perhaps unsurprisingly, 77% of respondents sought OTC products at grocers, drug stores and mass retailers, with 38% buying pain remedies and 32% purchasing allergy products. The category also held strong in brick-and-mortar, with 88% saying that they buy less than half of their OTC products online. Jefferies analysts noted that this may change with the uptick in COVID-19 cases, particularly as retailers like Amazon prioritize essentials, but it is an open question as to whether this behavior will keep up past the pandemic. When taking a look at sales using various organizations’ data, including Nielsen, among the pain relief, upper respiratory and GI discomfort segments, Jefferies reported that year-over-year growth performance has seen a tenfold increase in velocity for all three categories for the week ended March 7, when compared with the more normalized date for the weeks Jan. 4 to Feb. 15.

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Vitafusion is expanding its portfolio with not one, but six new gummy products. “The vitafusion brand provides consumers with a fun and delicious alternative to traditional vitamin pills and tablets,” said Michael Vercelletto, marketing director at vitafusion. “We are constantly addressing unmet nutritional needs in the gummy vitamin category, and the new products were developed as a direct result of our extensive consumer research.” The Ewing, N.J.-based company’s newest products include: l Irresistible Skin, with 2,500 mg of collagen per serving and vitamins A and E, aims to enhance skin’s hydration, elasticity and nourishment; l Organic Prenatal Multi features essential nutrients for mom and baby, including choline and folate. It is made without the use of high fructose corn syrup, gelatin, or artificial flavors and sweeteners; l Triple Immune Power combines vitafusion’s RenewX Prebiotic with vitamins C and D, and contains 50 mg of elderberry per serving; l Apple Cider Vinegar features vitamin B-12 and 500 mg of apple cider vinegar; l Kids Melatonin, with 1.5 mg of melatonin for sleep support and a fusion of passionflower, chamomile and lemon balm, features a peach flavor; and l Teen Essential Multi supports energy, metabolism and immune health, as well as provides such antioxidants as vitamins C and E. “We are delighted that consumers continue to embrace a more mindful approach to their nutrition, and vitafusion is committed to providing fun and nutritious options for them to easily integrate vitamins into their daily health regimen,” Vercelletto said.


Uncharted Territory Brands and retailers navigate a new way forward amid challenges By Seth Mendelson

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ill consumers turn to mass retailers for their beauty needs in the midst of the COVID-19 pandemic? While few industry observers want to talk about it, there seems to be a growing consensus that shoppers will look to mass outlets for their products for two very important reasons: price and accessibility. Before the pandemic hit in March, the massmarket beauty category finally was showing a flicker or two of life after three years of difficult growth as more consumers turned to premier brands sold mainly through department stores. Now those department stores are closed and consumers who still want to look good — even if they are stuck at home — are taking advantage of their trips to the drug store and food store to purchase cosmetics and other beauty supplies. No one really knows when the pandemic will end and what consumer shopping habits will be like when it does. Still, mass retailers are creating the perception with shoppers that they are here during the crisis, with good selection and price points, and will be here after it ends too. When the smoke clears, there are many theories swirling around the future of the beauty industry in chain stores. No matter

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what, efforts to elevate departments have been put on hold to offset costs associated with increasing benefits and pay to employees during the epidemic. Some think the economic crunch will drive shoppers back to the value pricing of mass stores. Retailers will be ready, stocked with the latest makeup and skin care. Others wonder if Americans — forced to work at home — might reduce beauty regimens. Liz Kaplan, founder of Kaplow Communications, doesn’t believe people will ever give up on the power of a made-up look. “Even while working at home, people got up, worked out and put on full makeup because it gave them confidence for their Zoom meetings,” she said. Ulta Beauty’s Mary Dillon supported that philosophy in an interview with CNBC on March 25. “Many of us are on video conferences all the time,” she said. “We still want to look good in that environment.” She also gave a shout out to Ulta Beauty’s digital tool, called Glam Lab, which allows for virtual try on. Dillon also said upticks in online sales of necessities like shampoo, but also self-care, have occurred, especially with skin care and facial masks, while its stores have been closed. Will shoppers who ran to the local CVS Pharmacy for a thermometer make a mental

note of the bevy of new items stocked in beauty when they are ready for a new blush? After dashing out for a new skin care product they couldn’t buy at Sephora, will consumers stock with the No7 they purchased at Walgreens? Can Ulta Beauty’s online tools build up pent-up demand when stores open with their well-trained beauty experts at the ready? “A lot of times, people think it’s great that e-commerce is up and running, which is great, but 80% to 85% of retail sales still happen in brick-and-mortar stores,” Dillon told CNBC. “We feel that going back to normal and enjoying things you enjoyed will be high on the list of priorities.” Certain categories will undoubtedly see renewed consumer interest, such as at-home hair coloring; nail color, as people could be slow to return to nail salons; at-home devices to duplicate spa services; and skin care, as people rethink procedures. Augmented reality apps to virtually try on beauty are expected to gain traction as testers could be a thing of the past in beauty doors. The industry waits for how it will all shake out. In the comments below, industry executives discuss actions they took in the wake of COVID-19, such as free educational programming, and what they see happening in the months to come.


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VOICES OF THE INDUSTRY Carlotta Jacobson, president, CEW One of CEW’s strengths has always been to offer knowledge and networking, and now that mission is more critical than ever. With the largest global database in the industry of more than 10,000 executives, CEW is in an ideal position to give back to the beauty community by offering free programming and content to both members and nonmembers. We are producing a robust calendar of webinars that we are now offering for free. We have also opened subscription access and adapted the content of our Beauty News digital newsletter to provide timely information for brands in developing strategies to navigate these uncharted waters. In addition, we are working to create our events into digital experiences, and offering virtual member meetups and discussion forums to help people feel less isolated while working remotely. We will continue to develop our plans to meet the changing needs of the industry over the course of the coming months. Over these many years, the beauty industry has supported CEW, and it is our priority to support them in a time of need. Mahisha Dellinger, CEO and founder, Curls Beauty Curls has manufactured thousands of FDAapproved KN95 masks and hand sanitizers that it has donated to local hospitals in Texas and New York City. Curls is including a free bottle of hand sanitizer with every order purchased on curls.biz. In early April, Curls will kick off a two-week series of virtual wellness seminars on Instagram led by various female experts to help practice self-care, along with recovery tactics, for when the pandemic ends. As far as the current state of the mass beauty market and how it will change the rest of the year, beauty was thriving and is typically a recession-proof industry. Given the COVID-19 pandemic, this will dramatically change. Dark days are coming for the retail industry as COVID-19 spreads across the

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“My message to the industry: Listen to the consumer, deliver an experience they long for, not what you think they want.” —MAHISHA DELLINGER, CEO AND FOUNDER, CURLS BEAUTY

United States. Stores closed, larger gatherings were banned, and people spent time in homes only going out when necessary. My message to the industry: Listen to the consumer, deliver an experience they long for, not what you think they want. Studies show that the consumer and retail executives’ opinions on key buying experiences are disjointed.

uncertainty. The more transparent with video that you can be, the better. The brands that do the best during this time will be communicating kindly and compassionately with their customers and doing it through all forms of video content and on the platforms that are best suited for the brand.

Jennifer Walsh, founder, Walk with Walsh, and wellness columnist at Good Housekeeping magazine The current state of the mass market is in a tough spot, where many of the brands are owned by a larger entity. These larger entities often don’t have a person or face of the brand that can truly speak to a customer. Also, the mass market was not experiential and those are the brands that customers enjoyed being a part of. People are prioritizing their purchases for the long haul with so much uncertainty ahead. People will buy more food and necessities over makeup and more skin care products. People are at home and will not be seeing others, therefore less makeup, skin care and hair care is being used on a daily basis. As for what’s ahead, I really don’t know. If a beauty brand has a strong founder voice or one that really connects people to living simply and is able to share that story and that message throughout this period, that would be ideal. Marketing should be done with a lot of storytelling. Sharing honestly what is happening through video. Everyone is home and consuming so much content, and no one wants to feel like they are being sold to. People want to know that brands care for them and are right there with them during this time of

Allan Mottus, industry consultant The state of the mass beauty business is mixed. Drug chains, such as CVS, are attempting to offer a greater mix of merchandise, especially in skin care. Their beauty advisors are also attempting to compete with department stores and target where knowledgeable sales personnel are reaching out to consumers in store, as well as those who are loyal, repeat customers. Vendors, such as Revlon and Coty, are beset with numerous marketing problems, and the chains are more reliant on L’Oréal, Maybelline and Neutrogena. It is time that drug chains take greater steps to offer more lines, especially as drug chains are drawing more female customers looking for wellness products. Because of the coronavirus catastrophe, drug chains will become more important to treating and diagnosing consumers/patients, and should up their game in body and skin care. Addressing consumer needs with welltrained personnel is essential for drug retailers to carve out a more secure consumer niche as Walmart continues to do so. I would tell retailers it is time to upgrade beauty departments and attempt to make them less prone to discounting by adding lines that are unique to them. This may


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VOICES OF THE INDUSTRY include working with vendors like Target does to develop proprietary lines. Shannon Curtin, CEO, New World Natural Brands NPD reported skin care would fare well during the crisis as a matter of people continuing to adhere to their skin care regimen and the increased demand in hand and body moisturizers. I am seeing this in our business as our brand portfolio is predominantly skin focused, however, our specialty teas and wellness gummies are continuing to sell during this time too. Consumers are looking for ways to adapt to the changes happening daily and are very focused on holistic health right now. The healthy beauty category — holistic beauty — will continue to grow in and out of the crisis. Our five brands have different primary channels of distribution, however, they all started in someone’s house and online. We are fortunate that we have a solid online business. As we began thinking about our own stores and salons closing, similar to Italy, we prepared ourselves to become a directto-consumer, Amazon and e-commerce only business a few weeks ago. We applaud the work that Amazon is doing to supply the demand of the U.S. population. We have been working around the clock to keep up with the changes to fulfill consumer demand differently. The work of retailers has been world class in their efforts to help consumers from their physical locations, and, as a result, our agility muscles are growing with each passing hour. Flexibility is the new normal. We are hopeful the Senate can come to an agreement soon on ways to help businesses and the independent beauty professionals impacted by COVID-19. Our beauty advisors, stylists, massage therapists, makeup artists, aestheticians and many others in this industry that are unable to work right now are incredible, creative and caring people. We need a bridge of relief for a few weeks, so they can go back to work as soon as it is safe to do so. As an industry, we are doing everything we can to define a new path forward in unchartered territory. I have witnessed an

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immense dedication to serving consumers and customers in new ways. When given a challenge, the industry has become a coalition to serve the greater good. The beauty industry specializes in care through listening and human touch, and while we may not be medical professionals, we do know how to take care of others. Care begins with listening. We listen to consumers by asking questions while they sit in a stylist chair, by reading their reviews, by performing a Google word search, by having a conversation with a beauty advisor, by collaborating with an influencer or an affiliate. Our industry superpower is listening to what is needed and creating an action plan to resolve it. To be clear, we are in a battle. When I worked for a big house beauty company a few years ago, I learned how to prepare for long battles. Every big and small beauty business must reforecast as if they were a direct-to-consumer and e-commerce-only business for the next eight to 12 weeks. As such, all of us are going to have to make really difficult choices to avoid a liquidity crisis. Indie brands that were once an hour by hour business are now managed minute by minute. Indie brands do not have big company problems, we have big problems for a small company. But we do have agility on our side. The most agile and consumer-centric companies will weather the storm and recover, although we’ll have inevitable battle wounds. While on the battlefield, I use my four P’s of leadership as a guiding principle: Purpose, People, Process and Profit. We can’t lose sight of why we rise and who we rise for. This is a battle that happens every 100 years, and we are in this together. Scott McKenzie, leader of Nielsen Intelligence and senior vice president of communications, Nielsen As the novel coronavirus sweeps the world, companies around the globe have refocused efforts to figure out how to navigate through this very serious and turbulent time. For many

drug store categories, consumer demand levels are hitting record levels and record speed. To help shed some light, a Nielsen investigation has identified six key consumer behavior threshold levels that tie directly to concerns around the novel coronavirus outbreak. The thresholds offer early signals of spending patterns, particularly for emergency pantry items and health supplies, and we are seeing these patterns being mirrored across multiple markets. The six threshold levels based on early indicators across markets (though at different times as the virus outbreak evolves at different rates in different geographies) are detailed below. Each one correlates with different levels of consumption. For drug store players in the United States, learning from purchase habits in countries where consumers have progressed through the six threshold levels may help supply chain management in the states and regions that have been most hit with COVID-19. They are: n Proactive health-minded buying; n Reactive health management; n Pantry preparation; n Quarantine living preparation; n Restricted living; and n Living a new normal. The outbreak has caused an array of changes in shopping behavior, and we’re focused on understanding the ones that will come next, how long they’ll last — and whether any will stay with us after the outbreak is behind us. As patterns begin to emerge in response to news events of this nature, it will be imperative for companies to learn from these scenarios to sustain growth. Mia Duchnowski, CEO and co-founder, Oars & Alps Oars + Alps is working relentlessly to give our consumers what they are asking for — antibacterial hand products. We produced hand sanitizer sprays and hand sanitizer gels in weeks, which wasn’t our plan in early March. But given the challenging times with COVID-19, we are doing our part to ensure that people are able to keep themselves safe.


INDUSTRY AWARDS PROGRAM Drug Store News is proud to recognize, celebrate and honor women making outstanding contributions to their companies and the industry. More than 140 women were honored November 2019 at the inaugural Top Women in Health, Wellness and Beauty event and gala. Winners were awarded in the categories of Career Achievement, Business Excellence, Commitment to Care and Rising Stars.

Who will be honored in 2020? Visit www.dsntopwomen for updates on timing for nomination opening in the spring and details on the gala event in the fall of 2020. Follow us on

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VOICES OF THE INDUSTRY

Stan Ades, CEO and co-founder, Pacific Shave; and CC Sofronas, co-founder, Pacific Shave It’s an exciting and interesting time for personal care. With consumers having unprecedented access to ingredient knowledge, especially in the natural beauty and grooming categories, the mass retail world has followed suit to bring these cleaner options to the masses. No longer are these products only accessible in elite organic stores and apothecaries. Consumers are more conscious than ever as to what they are putting in and on their bodies, which, in turn, causes brands to continue to innovate and differentiate their lines at all price points. Our customers value our commitment to develop high-quality, premium products at accessible price points, and this has contributed to our staying power at retail. We keep them coming back with innovative and effective grooming products that are unlike anything else on the shelves. Our customers know exactly what they are getting with every product — safe, gentle formulas that are effective and practical for everyday use. Given the events surrounding the COVID19 pandemic over the past few weeks — and what will likely be a long tale of economic uncertainty and hardship for many — I believe affordable luxuries will play a major role with respect to what is placed on retailers’ shelves this year. Consumers are understandably nervous, and tighter personal budgets for discretionary savings are sure to follow. That said, similar to the lipstick index, which suggests that consumers turn to small luxuries/less expensive indulgences during periods of economic uncertainty, the same holds true for grooming: spending a few extra dollars to pamper yourself with a superior product to help lift your spirits. Additionally, because of the tenuous state of the economy, consumers appear to be more conscientious than ever about supporting small, family and independent businesses. Both of these bode well for Pacific Shaving Company, a family-run business that has been manufacturing safe and effective “affordable luxury” grooming products domestically since 2002.

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Alice Chang, founder and CEO, Perfect The impact of the COVID19 pandemic is vast, transcending all industries. Here is how we predict it will change the beauty industry in a year: n A boost in online, mobile and digital connections. As we enter an era of no-touch retail, there will be acceleration in the selling process across digital channels; n A surge in virtual try-on technology. WFH (work from home) doesn’t mean WNM (wearing no makeup). Looking good — and more importantly feeling good — becomes increasingly important during tense times, and beauty products offer an instant pickme-up. With an increase in remote working arrangements, virtual try-on solutions will offer room for discovery and experimentation despite remote arrangements; and n A shift in consumer shopping behavior from physical shopping to a 100% no-touch consumer journey rooted in digital connections. In response to the challenges presented by COVID-19, Perfect has offered a variety of complimentary YouCam virtual solutions to help beauty brands quickly adopt a digital-first strategy. This includes YouCam Augmented Reality Training Special Program for COVID-19, which offers brands a private, interactive, livestream channel for global education to help brands stay connected during a time of social distancing. Perfect is also offering beauty brands free in-app product listings within YouCam Makeup — the virtual beauty app with over 800 million global downloads — to help brands connect digitally with beauty consumers at home. Additionally, we are offering YouCam for Web service for brands to integrate virtual try-on technology into their website experience. All three special programs are available to beauty brands complimentary through July 31. If sitting with brands and retailers, what three things would I say? Stay safe. Go digital, go virtual. We are here for you. Let us know how we can help you navigate the current challenges and lean into the digitally connected world.

Shawn Haynes, CEO, Revolution Beauty Uncertainty is always one of the most difficult challenges to overcome for consumers, retailers and brands alike. Our strategy during this challenging time has been to remain calm in our tone, consistent in our actions and loyal to our brand values. To our consumers that means continued conversation through social channels, listening to their needs and creating products that reflect what they are passionate about. For our retail partners that means closer collaboration and co-development of products and events that will attract our consumers to their omnichannel storefronts. For our people that comes to life by continuing to act with pace and following our values with passion as we launch, learn, react and execute. The NPD Group While there is uncertainty in brick-andmortar, online platforms are poised to offset physical retail. Online captures less than one-quarter of total prestige beauty sales, but it’s a mighty force in the market; in fact, it was online growth that buoyed the overall prestige beauty industry in 2019. Into 2020, online sales continue to grow faster than in-store sales. Given the current store closures, can we expect to see more sales shift online in the weeks ahead? The beauty industry knows disruption. Yet in these uncharted waters, how do we navigate our next move and what can we do to ensure the health and safety of our consumers? We are an industry that comes together and supports the bigger purpose. LVMH is a shining example of this as they recently announced a plan to transform their perfume factories to create free hand sanitizer for European hospitals in desperate need. This is our new normal, for the time being. The uncertainty ahead of us is unequalled, and its impact remains a question. But in the words of Maya Angelou, “Every storm runs out of rain.” When it does, we will return to life as we knew it and go back to focusing on finding the perfect lipstick shade for a welldeserved night out. dsn


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LAST WORD

Adapting to the New Normal Ten retail priorities for navigating the coronavirus era By David Orgel

J 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.

ust when you thought you’d seen everything. The coronavirus has changed life for everyone, and retailers are well aware of how their businesses are being transformed. They are not only stepping up to the plate, but also benefiting from expert guidance from industry organizations, government and others. However, the new normal will have long-term impacts beyond the present crisis. It’s useful to spend some time examining the big picture, and maybe even developing a statement on how to proceed in a crisis like this. Here are 10 ways retailers can benefit from lessons learned so far to improve their strategies, now and in the future. 1. Be the trust builder: Retailers have been focused on building transparency and trust for a while, and this is an opportunity to accomplish it in real time. Communicating actions being taken to keep customers and employees safe will create a long-term halo for retail businesses.

The new normal will have long-term impacts beyond the present crisis. It’s useful to spend some time examining the big picture, and maybe even developing a statement on how to proceed. 2. Show empathy and unexpected generosity: Consumers in a crisis worry not just about their health, but also their economic well-being. I was genuinely touched to receive a bank email that raised the topic of temporary waivers on monthly service fees. That’s the kind of tone and empathy that will win long-term friends. 3. Be the community partner: Many retailers have long strived to be closely connected to their communities. A crisis like the coronavirus requires new ways of defining community support. In the shortterm future, it’s about helping community members get supplies they need. Down the road, it’s about helping to repair damage caused by the crisis. 4. Engage with consumers in their homes: An emergency situation that requires consumers to

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stay home demands nontraditional messaging and marketing. Perhaps it can be simple cooking or health tips, updates on store hours, or available windows for deliveries and click-and-collect pickups. All communication needs to leverage a wide range of digital platforms, from email to social media. 5. Treat employees as champions: Retailers need to keep associates fully on their teams during a crisis. Employees should be kept in the loop and be involved in decision-making. Retailers need to get employee opinions and buy-in, and keep tabs on how associates are doing and on what they need. 6. Prioritize partners: Success in navigating a crisis relies on being closely in touch with suppliers, government and a wide range of industry partners. This is not a time to be worried about overcommunicating. 7. Embrace the tele world: Face-to-face communications give way to virtual interactions in the midst of a crisis like the coronavirus. This signals the need to raise the ability to communicate through digital platforms with consumers, suppliers and other stakeholders. Any capabilities gained will be highly useful in the future. 8. Consider implications for tech, supply chain: It’s important to identify how advanced technologies can jump-start preparations for a future crisis. And how can supply chains adapt to improve inventory availability? 9. Don’t drop everything else: Being in crisis mode doesn’t mean forgetting about all other business initiatives. At some point, the emergency is reduced and retailers need to be ready to move forward on other goals. Customers won’t be hibernating forever and will exhibit pent-up demand for other needs. 10. Fine-tune your niche: Consider lessons learned during a crisis that will help fine-tune retail niches within marketplaces. Every person and business will emerge changed to some degree. How does each business need to adapt to make certain it maintains and grows relevance? Retailers will need to adapt this list for their own businesses. The focus on learning lessons and doing the right things will have lasting benefits. dsn


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DSN - April 2020  

DSN - April 2020