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OCTOBER 2019

Beauty: A Natural Look P. 48

2019 Omnichannel R E TA I L E R O F T H E Y E A R

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Vol. 41 No. 10 DrugStoreNews.com

FEATURES 16 P&G’s Constructive Disruption How the CPG giant is taking a proactive approach to delivering on consumer desires

20 Focus On: NutraClick The supplement newcomer looks to make a mark

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26 Elevation Summit A Mack Elevation event highlighted the importance of agility among elite companies

30 Products to Watch 32 CBD Report: New Products New innovations that CBD manufacturers are rolling out

36 Cover Story: Omnichannel Retailer of the Year DSN takes a look at how Walmart’s operations — from stores, to e-commerce and its health-and-wellness efforts set the company apart.

COLUMNS

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36 INSIDE BEAUTY 48 Natural Beauty As natural demands shake the category, manufacturers big and small aim to keep up with trends

22 Counter Talk

Deodorant makers center innovation around ingredients and scents

with Dr. Reddy’s Labs’ Radha Iyer

42 Counter Talk with Facebook’s Martin Gilliard

62 Counter Talk with DSN Beauty Director Laura Fontana

44 Counter Talk with Walgreens’ Alex Broadus

64 Counter Talk with Aromafloria’s Sharon K. Christie

86 Last Word with David Orgel Consulting’s David Orgel

Companies look to simplify the lives of patients with diabetes from monitoring to injection and sharps disposal

Research sheds light on who the natural shopper is and what they want

58 Deodorants Keep it Fresh

66 News

HEALTH 82 Diabetes Management

56 Beauty Insights

6 Editor’s Note 8 Industry News

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85 Selfcare Roadmap Insights 68 Focus On: Xtreme Beauty The OKAY maker stands out

PHARMACY 70 Retail Clinics How retailers are building out their in-store clinical services to meet growing demand and improve health care access

80 Counter Talk

GMDC|Retail Tomorrow shares shopper insights on patients with diabetes from its new Selfcare Roadmap tool

SOCIAL Facebook.com/ DrugStoreNews Twitter.com/ DrugStoreNews

Surescripts’ Kathy Lewis

DSN (ISSN 0191-7587) is published monthly 12 times a year by EnsembleIQ, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription rates: Manufacturers, schools, libraries and all others allied to the field $119. Canadian subscribers $129. Foreign subscribers $225. Periodicals postage paid at Chicago, IL, and additional mailing offices. POSTMASTER: Please send address changes to DSN, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Canada Post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. For change of address, six weeks notice to Drug Store News, P.O. Box 3200, Northbrook, IL 60065-3200 is requested. Give old and new address and zip code. If possible, enclose address portion from cover on previous issue. Subscription changes also may be emailed to drugstorenews@omeda.com, or call 847-564-1468. Vol. 41, No. 10, October 2019. Copyright © 2019 by EnsembleIQ. All rights reserved.

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October 2019 DRUGSTORENEWS.COM


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EDITOR’S NOTE

Serving the Industry The major retailers continue to take steps to serve as a watchdog for consumers By Seth Mendelson

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ith no one else apparently ready to step up, it increasingly is becoming clear that the nation’s retailers are taking a more active role in serving as a watchdog for consumers on products and social issues. In late September, CVS Pharmacy suspended selling Zantac and its own ranitidine house brand following a recent product alert from the Food and Drug Administration that these products might contain a low level of a probable human carcinogen. The company Seth Mendelson Editor in Chief/ said it was going to err on the side of caution as it waits Associate Publisher for more tests to be conducted on these products and for more information from the FDA. Other retailers have since joined in, suspending sales of these products to protect their customers. About a month ago, Walmart said it was going to stop selling certain types of guns and ammunition, a move welcomed here and by many industry officials as necessary to combat the growing menace of gun violence across the country. And, over the last few years, more major retailers, including CVS Health, Walgreens, Rite Aid and Walmart, have taken steps to offer their customers healthcare services that were previously only available at medical offices or hospitals. These benefits often can offer customers faster service at a lower rate. While it is clear each retailer sees an opportunity to grow sales and profits from these services, many observers said that they also lower the price of health care at a time when more and more consumers cannot afford the spiraling cost of maintaining health services. All of these things point to the simple fact that with the government — on the state and federal levels — failing to take the initiative, someone else, specifically private industry, must step up to the plate. In recent months, it seems that a number of key retailers correctly have decided that this will be part of their role. In the future, more and more issues are bound to pop up where retailers will serve as the watchdog for consumer concerns. We can only hope that the retail community continues to stay at the forefront of these issues and take the right steps that will not only benefit their customers, but their own business practices as well. Remember that having the consumer look to a retail operation as their guardians is very much a good thing, too. dsn

We can only hope that the retail community continues to stay at the forefront of these issues and take the right steps that will not only benefit consumers, but their own businesses as well.

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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 Associate Managing Editor David Salazar (212) 756-5114, dsalazar@ensembleiq.com Senior Editor Sandra Levy (845) 893-9573, slevy@ensembleiq.com Desk Editor Maria Manliclic (212) 756-5093, mmanliclic@ensembleiq.com Online Editor Gisselle Gaitan (212) 756-5138, ggaitan@ensembleiq.com SALES & BUSINESS Beauty Director Laura Fontana (440) 724-4369, lfontana@ensembleiq.com Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Brand Marketing Manager Mary Ellen Magee (856) 419-8411, mmagee@ensembleiq.com Production Manager Jackie Batson (224) 632-8183, jbatson@ensembleiq.com 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 Dan McCarthy Chief Operating Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several

October 2019 DRUGSTORENEWS.COM

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INDUSTRY NEWS

Top Three Reasons to Attend Path to Purchase Expo 2019 With more lightning-fast changes in the industry, we all need a way to level the playing field and execute strategies for growth. Look no further than the 2019 Path to Purchase Expo, or P2PX. The Path to Purchase Institute’s largest annual event will be held Nov. 13 and 14 at the Hyatt Regency Chicago at 151 East Wacker Drive in Chicago. Here are three reasons why P2PX brings together the sharpest consumer goods and retail talent: 1) Education That Empowers: P2PX’s vetted master-class content offers attendees inspiring new ideas and models for action; 2) Community That Matters: P2PX connects you directly to the most knowledgeable, passionate decision-makers in the industry; and 3) Solutions That Transform: P2PX’s carefully selected exhibitors match your unique business needs to innovative, ROI-driven solutions. Below is a sampling of who you will see at the show:

Join the Path to Purchase Institute on Nov. 13 and 14 in Chicago for the defining retail event of the year, and turn today’s challenges into tomorrow’s stories of success. Visit path2purchaseexpo.com for more information.

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Piping Rock Named Rite Aid’s Supplier Partner of the Year Piping Rock Health products recently was recognized by Rite Aid for its contributions to the VMS category. Rite Aid awarded the Ronkonkoma, N.Y.-based company its Supplier Partner of the Year honor at the end of September. “We are thrilled to be honored by Rite Aid with this award,” said Rich Scoza, Piping Rock’s vice president of customer development and strategic planning. “At Piping Rock, we are committed to providing innovative, quality products with customer service excellence. To have our company be the recipient of this award reinforces our best-in-class service and shared commitment to the category. I’d like to thank all of the hard-working and dedicated associates that made achieving this award possible.” Executives from Rite Aid presented the award at a recent reception. Piping Rock said that its products offer leading innovation in VMS, encompassing traditional vitamins, supplements, powders, essential oils and more. “At Piping Rock Health Products, we work closely with our retailers to identify opportunities and provide them with innovative, trending products that support their growth strategies,” Scoza said. “Our goal is to provide high-quality products made from only the best ingredients, that meet consumers’ needs and drive foot traffic to the wellness aisle. By doing in house what many others outsource, we can guarantee quality, potency, and bring new, trending products to market quickly, allowing us to better support Rite Aid and its customers.”

October 2019 DRUGSTORENEWS.COM

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INDUSTRY NEWS

Soylent Intros Mint Chocolate Flavor

Promotion in Motion Adds to its Sun-Maid Chocolate Raisin Varieties Confectionery and snack company Promotion in Motion has added new flavor combinations to its line of SunMaid Chocolate Raisins. The new products include chocolate- and peanut butter-covered raisins, dark cocoa dusted raisins, and chocolate and almond crunch-covered raisins. “With these new additions to the brand’s classic Sun-Maid Milk Chocolate Raisins, chocolate lovers can feel good about eating the Sun-Maid Chocolate Raisins they’ve known and loved — only now more delicious than ever,” said Josh Shapiro, senior vice president of marketing at Promotion in Motion. The new products come in a range of sizes, from 2-oz. single-serve tubes to 3.5-oz. movie boxes and 70 oz. resealable stand-up bags, with suggested retail prices ranging from $1.99 to $5.79 each. “Consumers today expect authentic experiences in their snacking occasions. Our line offers natural combinations of plump raisins with almonds, cocoa dustings and creamy peanut butter, all masterfully blended with pure milk chocolate,” Shapiro said. “This is why Sun-Maid varieties are the perfect intersection of delicious indulgence and permissible ingredients you can feel good about.”

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Soylent is adding a classic flavor to its portfolio. The Los Angeles-based company unveiled its new mint chocolate variety that’s reminiscent of the classic ice cream flavor, the company said. “Our new mint chocolate drink, requested by our fans, was engineered by Soylent’s hard-working team, with the complex tastes of humanity in mind,” Andrew Thomas, Soylent’s vice president of brand marketing, said, noting that the product contains 36 essential nutrients and 20 g of plant protein. The launch of the new beverage coincides with the brand’s Life Cycle Analysis, or LCA, which reveals how the manufacturing of its products impact the environment. “It’s a crucial time in our existence, with an ever-increasing population and a need for more bioavailable, sustainable sources of nutrition,” Julie Daoust, vice president of product development and innovation, said. “Many companies talk about their sustainability impact, but very few actually make the investment to get the independent data to prove or disprove their assumptions. We’ve continued to focus on creating products that are delicious, nutrient dense and good for the future of our planet. In more ways than one, Soylent really is green.” Soylent’s mint chocolate flavor is launching on Amazon .com in October and in select stores throughout New York in November.

Tylenol Launches Children’s Tylenol Dissolve Packs Johnson & Johnson Consumer is introducing the first new form of Children’s Tylenol in 10 years. The company has unveiled Children’s Tylenol Dissolve Packs, the only pediatric acetaminophen offered in an orally dissolving granular form. J&J said that its consumer research informed the development of this product. The company’s findings included the fact that children graduate from liquids to chewables and pills over time, but that parents struggle when children don’t want liquids or chewables, but aren’t ready for tablets or have difficulty swallowing. Enter the wild berry-flavored granules, which dissolve on the tongue within seconds without water, and offer a transitional option for these children or families on the go, the company said. J&J said that each packet contains a uniform product blend and 160 mg of acetaminophen. In order to ensure consistency, the company developed a customized manufacturing process with equipment designed to accommodate dissolvable granules and foil packaging material.

October 2019 DRUGSTORENEWS.COM

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INDUSTRY NEWS

Skyn Rolls Out Cleansing Wipes, Delay Spray LifeStyle Healthcare brand Skyn Condoms continues to grow its offerings beyond prophylactics. The Iselin, N.J.-based brand is introducing Skyn Get Fresh cleansing wipes and Skyn Endurance, a delay spray meant to improve intimate endurance. Skyn Get Fresh wipes — sold in 10-count and 30-count packs — contain shea butter and provitamin B5 to optimally cleanse both men and women. The company said that while there are various alternatives targeted at women, this would be the first unisex product in the category. Skyn Endurance offers 42 sprays per container, with a formulation designed to improve absorption and minimize partner transfer. The peppermint oil and menthol-scented spray features a discreet, travel-sized package. “Skyn is committed to continuously developing products for our consumers that address their needs throughout all moments of the intimate experience,” said Jeyan Heper, CEO of LifeStyles. “With the addition of Skyn Get Fresh, we are offering to our consumers a simple and convenient way to cleanse and refresh before and after intimacy. Further, with Skyn Endurance we enable both men and women longer lasting intimate moments.”

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Goli Nutrition, Vade Nutrition Win Vitamin/ Supplement Buyers’ Choice Awards Goli Nutrition won the Drug Store News/ECRM Buyers’ Choice Award for its Goli Apple Cider Vinegar Gummies during ECRM’s Vitamin, Weight Management, Sports Nutrition & Hemp Solutions session held in late September in Orlando, Fla. Vade Nutrition was a finalist for its dissolvable protein scoops and pre-workout supplements. Both were selected from among dozens of entries that were displayed at the session’s hospitality area. Buyers cast their votes based on product innovation and packaging. “Both winners have developed unique innovations for the delivery of nutritional supplements,” said Tony Giovanini, senior vice president of health and beauty care at ECRM. “Goli found a way to make apple cider vinegar delicious, and Vade makes it easy to take your protein and pre-workout supplements on the go. Congratulations to both winners!” Goli Nutrition’s Apple Cider Vinegar Gummy masks the harsh taste of apple cider vinegar, while still retaining all of its many health benefits for digestion, complexion, weight reduction, body detoxification, heart health and energy, company officials said. The product is organic, non-GMO, vegan and free of preservatives, gluten, chemicals, corn syrup, dairy, wheat, artificial ingredients, sweeteners and colors. Goli also is working with Vitamin Angels to help combat childhood malnutrition. Each Goli Gummy purchase enables Vitamin Angels to provide a child in need with a six-month supply of vitamins and minerals. Vade Nutrition was launched by college athletes Joe and Megan Johnson more than three years ago, when they realized how inconvenient it was to take nutritional supplements on the go. They came up with the concept to have each serving prepacked in a dissolvable foodgrade film to eliminate the mess and hassle associated with nutritional powders — or as Joe Johnson puts it, “We make real nutrition really convenient for real people.” Its Dissolvable Protein Scoops and Dissolvable Pre-Workout Packs are premeasured and instantly dissolve in water. The protein is a lactose-free, gluten-free whey protein isolate. It is one of the highest quality and leanest protein powders on the market, according to the company, with zero fat, zero sugar, 90 calories, 1 g of carbohydrates and 20 g of protein. The blue raspberry pre-workout pack features ingredients developed for performance, pump and energy. The narrow, dissolvable stick-shaped packs make it easy to drop into any water bottle. The company recently received investments on ABC’s “Shark Tank” from Mark Cuban and guest shark Alex Rodriguez.

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P&G AT GROCERYSHOP 2019

Consumer Focused Procter & Gamble seeks to meet consumer needs through ‘constructive disruption’ BY SETH MENDELSON

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he consumer products goods industry has an excellent opportunity to lead the charge in the battle for consumers hearts and minds as it applies to constructive disruption, the group president of Procter & Gamble’s North American operation told the audience at Groceryshop 2019 in mid-September. Speaking at the three-day event in Las Vegas, Carolyn Tastad told attendees that now is the time for suppliers and retailers to step up, and how it is very important for her company to be at the forefront of leading this challenge, if for no other reason than constant changes in technology and a more demanding consumer who is asking for it.

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“Our world is in a perpetual state of disruption, and the pace of change is accelerating. Digitization, big data and automation are impacting every part of our daily lives,” she told the audience. “Technology is causing us to rethink all aspects of how we work, including our business models, how our brands connect with consumers, and how we engage with our suppliers and retailer partners. The level of disruption we’re facing today can be overwhelming — distracting even. A big part of the issue are consumers’ expectations, which she said are higher than ever. “They expect everything to be effortless and convenient,” she said. “They want to be able to shop anytime, anywhere, in any way they want. This is especially true for those

October 2019 DRUGSTORENEWS.COM

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P&G AT GROCERYSHOP 2019 individuals who grew up holding an iPhone or iPad in their hand.” Tastad, who leads 10 different categories across North America, said that consumers also are engaging more with companies and brands that take a stand on issues that are important to them, noting that consumers expect them to be more socially responsible. “So how do we deal with this disruption? At P&G, our goal is to lead it — constructively,” she said. “Our company strategy is to delight consumers with irresistibly superior product, packaging, brand communication, retail execution and value. By leading constructive disruption in our business, we can drive growth and create value for all of our stakeholders, retailers, investors, employees and, most of all, our consumers.”

By next year, P&G officials expect all of their manufacturing sites to send zero waste to landfill — and 85% of their sites already are there. To do this, they had to change their corporate mind-set to see waste not as waste, but as worth, and to identify creative solutions for those materials. Instead of sending suds that do not meet company specifications to the landfill, they are sent to car washes. Scraps from feminine care products become cat litter, and old shipping drums have been turned into school benches. Procter & Gamble is in the trenches in this battle. The company, Tastad said, is becoming more high tech, emphasizing automation and digitization in every part of its business. “We’re creating tech-enabled brands and experiences to serve our consumers in ways we never imagined,” she said. “In January of this year, we brought a number of our innovations to the Consumer Electronics Show. That surprised a lot of people because people don’t necessarily think of P&G as a technology company, and they don’t expect to see us exhibiting at CES. But from our perspective, technology enables us to serve consumers better.” For example, she said P&G’s Oral B Genius toothbrush uses AI-enabled technology to make personalized recommendations for the best brushing experience, and its Opté skin care system combines multiple technologies in one device to detect and correct imperfections on your skin. “We’re also leveraging automation and digitization to deliver the next ‘S’ curve in our supply chain,” Tastad said. “We’re building

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new digital platforms for integrated supply planning with greater responsiveness and agility. We’re using robotics and automation across our supply network to drive speed and offset rising labor costs. We’re using modeling and simulation, and lean innovation to speed up our innovation process to get new products to the market faster. This delivers significant benefits in time and cost, helping to reduce our learning cycles from months to days. Yet high tech alone is not enough. The company needs to become more “high touch,” Tastad said, adding that the same shoppers who embrace technology are increasingly concerned about transparency and privacy, as well as knowing the brands they buy, what’s in them, where they are sourced, what impact they are having on our planet and what issues they’re standing for. “We all have so much information about our consumers, and they’re demanding as they should that we protect and respect their privacy,” she said. “The new privacy laws require us to share all the information that have associated with a consumer’s personal ID, as well as the details of how we’re using that information. “Transparency has become a foundational principle. It builds trust when we offer it. It erodes trust when we don’t. Consumers expect us to step up in how we care for our planet,” Tastad said. “At P&G, we’re focused on tackling two critical issues: finite resources and increasing consumption. We’ve committed that 100% of our packaging will be recyclable or reusable by 2030. We’ve developed a technology that takes odors and colors out of polypropylene to enable broader reusability. We have joined forces with many other companies in the Alliance to End Plastic Waste, working across industries and disciplines to find and develop solutions for this problem.” Tastad said that by next year, P&G officials expect all of their manufacturing sites to send zero waste to landfill, noting that 85% of their sites already are there. To do this, they had to change the corporate mind-set to see waste not as waste, but as worth, and to identify creative solutions for those materials. She pointed out that instead of sending suds that do not meet company specifications to the landfill, they are sent to car washes. Scraps from feminine care products become cat litter, and old shipping drums have been turned into school benches. “Speaking of waste, plastics have changed the world, but infrastructure for plastic recycling hasn’t kept pace. Three hundred eighty million tons of plastic are produced each year, and too much plastic ends up polluting our world, especially our oceans,” she said. “If we don’t intervene, there will be more plastic in the ocean than fish by 2050. What a horrifying statistic!” Taking a stand is good for society and good for business, she said. In comments to Drug Store News after the speech, Tastad said that it is vital that P&G and all retailers and suppliers remain focused on the consumer and that person’s interests. “How do we grow the market and the different categories?” she said. “We feel that if we stay in the right growth mindset, there is tremendous opportunity to create, instead of risk. We want to be in front when it comes to new ideas and solutions to better serving our industry.” dsn

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FOCUS ON: NUTRACLICK

Road map to success NutraClick is poised to take on the men’s health category with its nutrition supplements BY SETH MENDELSON

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eaders at NutraClick, the manufacturer of Force Factor performance nutrition supplements, are eager to explain that they support their products with a uniquely powerful marketing and sales model — one that makes their retail partners considerable profits. In fact, executives at the 10-year-old company quickly will let you know that they back their diverse assortment of SKUs with scaled television advertising, a feat they said none of their competitors can match with such efficiency. With tens of millions of dollars committed every year to the campaign, the result, they said, is massive awareness of the company’s award-winning formulas, as well as strong consumer demand for the products on e-commerce platforms, at specialty retailers and, for about the last two years, in mass retail outlets. “We run dedicated national television campaigns for every item that has food/drug/mass distribution — literally billions of impressions per year,” said Joe Herne, vice president of sales at the privately held Boston-based company. “That advertising, over time, has created significant demand for our products, and it is playing a big role in driving sales at retail.” The company is focusing on multiple nutraceutical segments for men and women of all ages. For example, its Test X180, Alpha King and SCORE! lines are focused on testosterone- and libidoboosting, while the LeanFire line focuses on helping consumers burn fat and lose weight. Other categories perform well for the company, too, like ProbioSlim probiotics for improved digestion and healthy weight management, and Forebrain for improved memory and cognitive performance. The company also has products that address sleep, energy and prostate issues. While NutraClick’s premium formulas have demonstrated they can sell at premium price points — many for around $70 — Herne said

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that more than 20 major retailers, including Walmart, Walgreens, CVS Pharmacy, Rite Aid, Meijer, H-E-B and Kroger, are selling the assortment for about half that price. The company was founded by two former Harvard University rowers in 2009 on the premise that “uncompromising performance supplements should be accessible to everyone,” according to the company’s website. The first big break came just three months later when buyers at GNC approached company executives and asked to stock the Force Factor brand. Over the next eight years, the company, led by co-founder and CEO Daniel Wallace, built its assortment to the point where in 2017, it felt confident enough to take the line to mass retail. Walgreens was the first to jump in when the chain agreed to stock top-selling LeanFire XT. Herne said the company is perfectly positioned to take advantage of the growth in the men’s health category, among others. “We are going to do about $75 million in sales this year,” said Herne, who joined NutraClick after nearly a decade at Bausch & Lomb. “By 2021, we expect this brand to be in the $100 million range at mass retailers. We are fueled by an insatiable desire to engineer high-quality, safe and efficacious performance supplements for the body and mind, creating some of the most novel formulas and winning numerous awards in the process.” The next several years promise more of the same. “Our road map is to broaden the assortment and continue to pursue innovation, while we develop relationships with new retailers and deepen those relationships we already have,” Herne said. “We think we are well positioned to meet consumer demand for premium, differentiated performance supplements, and intend to continue leveraging our unique model to reach as many consumers as we possibly can.” dsn

October 2019 DRUGSTORENEWS.COM

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10/9/19 10:37 PM


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10/9/19 11:45 PM


COUNTER TALK

Safety and Quality Making the case for Indian generic manufacturing By Radha Iyer

A Radha Iyer, vice president and head of quality and scientific affairs for developed markets, Dr. Reddy’s

merican consumers often are surprised to learn about the drugs being prescribed to them. For instance, many people are taken aback to learn that more than 90% of the medicines prescribed by doctors in the United States are generics. Even more surprising is the fact that more than a third of these drugs likely were manufactured in India. This country’s ability to produce affordable, generic drugs has led to its reputation of being the “pharmacy of the world.” It stands to reason that when the media raises concerns about the safety and scope of imported generic medicines, consumers question the quality of medicines essential to their health. Recent stories have depicted an industry fraught with quality issues. These concerns raise fears among patients that taking drugs made in India may result in unpredictable effects.

Indian companies will continue to expand globally, enriching their manufacturing capabilities to meet the growing demand in the world. Fortunately, the reality is that the generic medicines manufactured in India are as safe and efficacious as those made in the United States. To drive forward this commitment to provide safe and quality drugs, The Indian Pharmaceutical Alliance, or IPA, which represents 23 research based national pharmaceutical companies focused on patient health and safety, with a commitment to provide quality drugs to patients throughout the world, have undertaken several focused steps towards excellence in quality. Over the past four years, IPA has worked to: • Measure and benchmark Indian pharma quality with the rest of the world; • Create targeted guidelines and best practices in

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areas of relevance, which are vetted by regulators across the world, including the FDA; and • Expand the skills and capabilities of quality talent for Indian pharmaceutical companies. Furthermore, between 2012 and 2016, IPA companies contributed $161 million to generic drug user fees, thereby contributing more than half of the revenue under the Generic Drug User Fee Amendments, which enables the FDA to bring greater predictability and timeliness to the review of generic drug applications, as well as helps to fund the inspection of generic plants. The footprint of the IPA in the United States is larger than many may realize. The 16 IPA companies that have locations in the United States span 20 states and 60 geographic presences. In total, this represents a combined investment of $4 million and a five-year growth rate of 300%. What’s more, these facilities employ nearly 5,000 people, empowering communities from coast to coast. Indian companies will continue to expand globally, enriching their manufacturing capabilities to meet the growing demand in the world. The future will see a major role in global health care by Indian pharma, not only in making medicines affordable, but also in strengthening India’s position as a global hub for making innovative and high-quality medicines. By making bolder strategic moves in uncharted geographies, products and technologies, Indian generic manufacturers seek to reclaim their position as a world-class provider of affordable, high-quality drugs. Ensuring we communicate this vision and quality-centric focus will be essential to the bright future between manufacturers and those who rely on these medicines. After all, a clear understanding of our record of accomplishment and emphasis on quality supports the ongoing efforts of Indian generic manufacturers to provide quality solutions that ultimately benefit consumers across the globe. Doing so will ensure that even if a customer does not realize they are taking a medicine made in India, they can rest assured it is safe and efficacious. dsn

October 2019 DRUGSTORENEWS.COM

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10/9/19 10:39 PM


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COUNTER TALK

Looking Ahead Groceryshop offered several insights to guide the industry By Martin Gilliard

I Martin Gilliard, head of industry, retail superstores and groceries, Facebook

n mid-September, more than 3,000 people from the grocery business — everyone from C-suite leaders to media analysts — touched down in Las Vegas to learn about the latest industry trends. The second annual Groceryshop conference featured stage presentations, panel discussions, an exhibit hall and podcasts. Attendees also enjoyed the chance to socialize, sample plantbased burgers, and sip champagne poured by Cirque de Soleil-esque performers hanging from the ceiling. Among the insights shared were the following:

launching 2,000 private-label SKUs across every food category by the end of 2020. And this focus on private-label products is only expected to increase if we enter a recession. In a Facebook IQ and Boston Consulting Group study, customers identified lack of brand awareness, irrelevant ads/offers, and unclear value propositions as top friction points at the discovery phase. This means that CPG brands need to employ differentiated go-to market strategies to not only distinguish themselves at shelf, but before customers enter the store.

1. Brands are taking a stand. Today, more people — and especially younger generations — expect brands to be socially conscious and culturally relevant. People want brands to be transparent about their values. A RetailMeNot survey reported that two-thirds of Internet users age 18 years old and older said more brands should take a public stand on important social values. It’s no surprise that digitally native brands are aligned with this trend, but touchstone companies are leading the industry with creative campaigns that address social and environmental issues. Procter & Gamble’s “What it means to be a man” campaign responded to the #metoo movement by taking a stand against toxic masculinity, and its “Loads of Hope” initiative helped wash 68,000 loads of laundry for people impacted by natural disasters.

4. Personalization is paramount. One of the most frequently used terms at this year’s conference was “customer centric.” Many brands and retailers are shifting their strategies toward a customerdriven model, allowing customers to dictate what they need, and then building products that meet those needs. Conventional food has been transformed in response to people’s desire for simple food that is clearly sourced. This focus on shoppers’ unique desires also has led to an abundance of variety in the market. For example, Seth Goldman, executive chair at Beyond Meat, shared that more than 50% of the milk options on the shelf are nondairy, giving customers more variety to choose the option that works best for them.

2. Partnerships keep driving growth. There is a steady stream of multi-retailer partnerships — like the collaboration between Kroger and Walgreens or Instacart’s growing partnership across many retailers. These work because they allow each brand to do what they do best, while driving growth and building equity for both brands. In the next evolution of these partnerships, we’ll likely see more retailers and brands sharing insights. 3. Retailers are leaning into private label. Private-label products are a major priority for such retailers as Target, which announced that it will be

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5. Insights and measurement are essential. Historically, shopper marketing efforts have lacked substantial measurement, leaving brands to gauge a program’s value based on the number of impressions it earns. Yet, as more brands have realized that impressions are not a reliable indicator of success, they’ve begun seeking metrics that get them closer to understanding the true impact of shopper marketing on store traffic and sales. This explains why brands are leaning into loyalty programs, which are incredibly valuable because of the insights they offer. As I look towards the future, I am excited for the opportunities that lie ahead. These trends provide possibility — the possibility to reduce friction across all facets of business and drive growth. dsn

October 2019 DRUGSTORENEWS.COM

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10/9/19 10:41 PM


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ELEVATION SUMMIT

Heeding the Winds of Change Elevation Forum event focuses on how elite organizations adapt BY SETH MENDELSON

C

and how the organization is evolving through hange is vital to the success of any a business transformation. Sam’s Club is radiretail operation. Are the top execucally simplifying many parts of its business, he tives at major chains helping or hurtsaid, adding that speed and transparency are ing their teams as they implement essential parts of the company’s DNA. these transformations? That was the “True relationship transparency means discussion at the most recent Elevation Forum, we are honestly collaborating, and it’s not held in mid-September in Rogers, Ark., where a punitive if we disagree,” Jackson said. “The group of 35 health, wellness and beauty execvery best Sam’s Club vendor partnerships utives gathered to talk about the future of the mass retail industry. focus on proactive product innovation with the merchandising teams. They share tena“About 75% of change initiatives fail, cious focus on our core business, they move and 8-in-10 leaders state the biggest barfast, offer disruptive value, and have a clear rier to growth is internal alignment,” said expectation of what great performance actuDan Mack, founder of the Chicago-based ally looks like. They are companies who conElevation Forum, which meets three times tinue helping us lead transformation with per year to discuss industry, leadership and insights that help us attract new members or organizational development growth initiaexpand category penetration.” tives. “Change isn’t the problem, it’s a leadMack later challenged the executives at er’s fear of change, which is the bottleneck in the meeting with the question, “How do you most organizations.” have courageous discussions with your top The event began with a discussion on the drivers of leading a cultural transformation. strategic customers?” “Managing change requires leaders to deal Sean Jackson, Sam’s Club senior vice “You will find yourself continually thwarted effectively with both the structural and the president of consumables and OTC, with in your best efforts unless reality is regularly human dynamics of a corporate shift,” Mack Elevation Forum founder Dan Mack and thoroughly examined,” he said to the said. “It’s no secret that high-performing teams attendees. “We must determine whether our have three times more positively energized leaders than the average customer relationship assumptions match reality.” organization. This philosophy allows them the credibility to help their The group discussed the top sales and negotiation challenges team embrace change and to play loose as they transition the culture.” facing them, including managing price increases, striking win-win Mack also said that elite organizations understand how to deals and maintaining profitable relationships. “People skilled at encourage business evolution. They are internally motivated and courageous conversations respond five times faster to financial are adept at managing the emotionally taxing process of reshap- downturns,” Mack said. “And organizations that can ask demanding a business, he said, adding that they earn trust in their organi- ing questions during challenging times are twice as likely to deliver zations and install keystone habits that help drive transformation above average performance.” throughout the culture. To maintain a growth culture, companies must practice couAmong the conclusions the forum arrived at, Mack said, was that rageous discussions with their top retail partners and honestly highly adaptive teams are guided by cohesive internal leadership, explore mutually beneficial growth plans. The group agreed that holding the center of the organization accountable — especially there is a direct relationship between the relationship transparency when times are difficult. Teams that lead change well have defined and enduring long-term growth. a straightforward yet compelling vision, and celebrate quick wins, Mack said that the Elevation Forum will again meet three times measure success accurately and are emotionally safe. Having fun in 2020 with the first event taking place in Scottsdale, Ariz. on along the way helps a lot too, Mack said. April 24, the day before the start of the NACDS Annual Meeting. The forum’s keynote speaker was Sean Jackson, Sam’s Club’s senior For more information about these events, Mack suggested people vice president of consumables and OTC. Jackson shared his vision visit mackelevationforum.com. dsn

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COUNTER TALK

Empowering the Art of Pharmacy How Walgreens leverages technology to bring pharmacists and patients face to face By Alex Broadus

L Alex Broadus, director of patient outcomes performance, Walgreens

ike so many, I love the science of pharmacy. Learning about how complex chemical equations lead to the unique mechanisms of action and side effect profiles of a given medication drew me to the profession. However, as I spent more time working in a pharmacy — first as a technician, then an intern and finally a pharmacist — I realized that knowing the science was just one aspect of what a good pharmacist does. The art of pharmacy sealed my lifelong passion for the work we do. I view the art of pharmacy as the unique relationship pharmacists build with patients. Perhaps more than any other healthcare provider, we have a chance to build a trusted and valued rapport with those we serve. According to one study, a high-risk Medicaid patient visits his primary care physician four times per year and a community pharmacy over 35 times a year. While this presents opportunity for pharmacists to strengthen relationships with patients, one of the challenges our profession has faced in recent years is how to make the most of these interactions to improve health outcomes.

Perhaps more than any other healthcare provider, we have a chance to build a trusted and valued rapport with those we serve. As director of patient outcomes performance at Walgreens, I work to find solutions via technology that will help empower pharmacists to practice the art of pharmacy and help our patients. Through our clinical engagement platform and extensive programs, our pharmacists have visibility into which patients need additional support and in what way the pharmacist can lean in to improve health outcomes — whether it is assessment of adherence barriers when a patient is overdue for a refill or a diabetic patient who would benefit from a

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statin. We’ve connected with more than 15 million patients through our clinical platform since it launched in April 2018. In addition, we have strong partnerships in place with such industry leaders as OutcomesMTM and Pharmacy Quality Solutions, as well as our health plan partners to provide a holistic view of the patient to our pharmacists. Incorporating what we learn from the relationship with our patients, we recognize there are different expectations of how they want to interact with their pharmacist. We have a diverse omnichannel network to support these needs from our digital tools to the local pharmacist in the community, and even our more than 150 health outcomes pharmacists who reach out to patients who need additional support. For example, my mom loves Anna the pharmacist at her local Walgreens when she visits the store. She has been a tremendous resource for her in navigating new diagnoses, side effects and formulary issues. When she’s at home, she prefers to use the 24/7 chat feature from the app if she has a quick question for the pharmacist, or if her daughter isn’t picking up the phone. Technology and systems will not be enough to strengthen the pharmacist-patient relationship, though. I’m proud to work alongside incredible regulatory and government affairs teams that actively are participating in conversations throughout the nation to simplify processes so that pharmacists have more time to focus on patient care. In addition, these teams are working with professional organizations at the state and national levels to expand technician responsibilities, as well as protocol prescribing and prescriptive authority for pharmacists. In the era of value-based care, pharmacists are best positioned to disrupt health care. It will be the pharmacists and their unique relationships with patients who are the change agents — not at-home delivery, packaging, machine learning, APIs or prescriber status. Empowering our pharmacists to meet patients where they are by practicing the art of pharmacy ultimately will help improve health outcomes in the communities we serve. dsn

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PRODUCTS TO WATCH

Shelf Spotlight HRG’s five standout products that hit shelves in September

er usual, Hamacher Resource Group’s new product team was busy in September. Awash in the 299 products that made their debut last month, the Waukesha, Wis.-based company sifted through 13 OTC products, 81 wellness products and 205 beauty products to find five that made a mark based on their innovation and earning potential.

P

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Aquaphor Ointment Body Spray

1

Refresh Relieva PF Eye Drop

4

Ezy Dose Stainless Steel Locking Container

2

Children’s Tylenol Dissolve Packs

5

Dapple Baby Shampoo and Body Wash – Fragrance Free

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October 2019 DRUGSTORENEWS.COM

Allergan’s Refresh Relieva PF eye drops are formulated to provide temporary relief from burning and discomfort due to eye dryness, including post-operative dryness from Lasik procedures. The formula is preservative-free and is packaged in a multidose bottle that features a double lockout system to keep drops sterile. The first new product from Tylenol in more than 10 years, Children’s Tylenol Dissolve Packs are designed to dissolve in seconds on a child’s tongue without water. The product is made for children who may not like liquid pain relievers and might still not be able to swallow pills, as well as for families on the go, Johnson & Johnson Consumer said.

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Beiersdorf’s Aquaphor brand continues to innovate. The new Aquaphor Ointment Body Spray is hypoallergenic, as well as preservative- and fragrance-free. It is meant to be easy to apply on hard-to-reach areas, allowing for it to soothe and relieve dry and rough skin. Apothecary Products’ latest offering is giving patients a way to securely store their medication, prescriptions or personal items. The stainless steel locking container is especially timely amid conversations about opioid abuse and misuse, HRG said. Dapple made its name in the baby category with bottle and dish soap, and now is expanding into baby personal care products that include lotions, calming bath liquids, and 2-in-1 shampoo and body washes. The products are made with plant-derived ingredients and essential oils. They also are free of brighteners, dyes, artificial fragrances, parabens, sulfates, phthalates, mineral oil and fillers. dsn

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CBD REPORT: NEW PRODUCTS

Criticality Adds Korent, Korent Select Liniments

ZBD Health Intros CBD-Infused Nutrition Bars ZBD Health is bringing its CBD-infused bars to retailers in select states. The Denver-based company, founded by nutritionist David Ingalls, is rolling out the nutrition bars that contain 10 mg of CBD in two varieties, Mint Chocochip and PB Chocochip. “We think of ZBD nutrition bars as CBD health for everyday life,” Ingalls said. “As a nutritionist, my goal was to create bars that have the highest quality food value and taste great, as well as offer the benefits of CBD.” Ingalls, who previously founded Zing Bars, said the experience with that brand informed the development of ZBD. “People want nutrition, but they aren’t willing to compromise on flavor,” he said. “We learned to marry flavor and healthy ingredients together in Zing Bars, and that knowledge was very valuable in creating ZBD.” The Mint Chocochip bar contains 6 g of protein, while the PB Chocochip bar has 7 g of protein. The CBD in each bar comes from broad-spectrum hemp oil. They also feature natural nut- and plant-based vegan protein, and are free of wheat, gluten, GMOs and artificial sweeteners. Ingalls said the company is focused on quality with the CBD it uses in its products. “Because CBD is unregulated, it’s essential to ensure that our CBD oil is pure, unadulterated and fully traceable,” he said. “We use a broad-spectrum, zero-THC, CO2-extracted hemp oil from hemp organically grown in Colorado and Oregon. Our oil is extensively tested and verified to be free from solvents, pesticides and heavy metals. We also publish these tests on our website and link to them with a QR code on our packaging for full transparency.” The bars have launched at such locations as New Seasons Market and Market Choice in Washington and Oregon, Pharmaca Integrative Pharmacy and Sprouts Farmers Market in Colorado, and at various independent and specialty retailers.

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Criticality, a North Carolina-based industrial hemp company, is adding new items to its Korent and Korent Select brands’ product lines. The company has unveiled two CBD roll-on liniments available under both brands. “Our expertly-crafted, responsibly-produced liniments offer consumers a natural alternative to help soothe muscle and joint discomfort,” said CEO Brian Moyer. “The CBD liniments incorporate natural ingredients, including witch hazel, allowing for fast absorption following application, while leaving behind zero residue.” The liniments are offered in warming and cooling formulas. The warming liniment is meant to ease sore muscles, and the cooling liniment is designed to ease overworked joints. Both contain full-spectrum CBD oil made from U.S.-grown hemp. “Criticality uses all-natural, environmentally friendly methods to extract CBD oil from the hemp plant without the use of harsh chemicals,” Moyer said. “The hemp used in our products undergoes independent, thirdparty testing at various stages of the supply chain to verify compliant cannabinoid levels and purity standards. The results of this extensive testing can then be shared with our consumers at the click of a button.” Korent and Korent Select products each contain a distinct lot number on their packaging, which consumers can enter on the brands’ online quality trackers to reveal a product’s certificate of analysis.

October 2019 DRUGSTORENEWS.COM

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CBD REPORT: NEW PRODUCTS

Social CBD Launches Foot Renewal Cream Social CBD is rolling out its latest product. The Portland, Ore.-based company’s Foot Renewal Cream uses a blend of hemp extract, arnica, white willow bark and menthol to soothe feet, as well as shea butter and avocado oil to hydrate dry skin. “Social CBD Foot Renewal Cream supports every lifestyle — no matter if you ran a marathon or stood on your feet for eight hours straight,” said president Angelo Lombardi. “Social CBD’s mission is to educate consumers on wellness alternatives to support any and all daily routines. It’s the 21st century. CBD isn’t just for the stars. Social CBD offers high-quality, lab-tested CBD products accessible to all.” The Foot Renewal Cream launch comes on the heels of the introduction of the company’s Broad Spectrum CBD Drops, which joins Social CBD’s other topical products — Muscle Rub and Social CBD Patches. It currently is available at select retailers and on the company’s website.

Motus Active Focuses on Fitness Motus Active, a CBD brand focused on using hemp in fitness products, has debuted a new line of items. The line features three products that each contain CBD from American-grown hemp. Company leadership believes the sport nutrition angle can help them establish a niche in the crowded CBD segment. “There is a vast number of non-CBD supplement lines that are already well established, however, the CBD supplement market is new and relatively untapped,” said Billy Watt, Modus Active’s product manager. “There is a shift happening amongst those who use supplements, athletes are more conscious than ever on what they put in their body. CBD is virtually side effectfree in comparison to other pain-relieving products, and we strongly believe CBD is the way of the future.” Watt said the company has dozens of products in the pipeline that help support athletes in their goals, from casual gym goers to high-performance professionals. The company’s Total Body Capsules are sold in 100-count bottles that contain a total of 3,000 mg of CBD. The product, meant to help reduce muscle pain, swelling, cramps and spasms, while supporting focus, muscle growth and recovery with a blend of BCAA, L-arginine, glutamine, creatine and vitamins B6 and B12. The Motus Active line also includes CBD Power Drops, sold in 30-ml bottles that contain a total of 1,000 mg of CBD, and the Power Freeze CBD Roll-On, which contains 500 mg of CBD oil. The roll-on features natural menthol; ilex paraguariensis, or yerba mate, extract; uncaria tomentosa, or cat’s claw, extract; and boswelia serrata, or Indian frankincense, extract.

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COVER COVERSTORY STORY

2019 Omnichannel

R E TA I L E R O F T H E Y E A R By Mark Hamstra

F

ive years or so ago, many a naysayer said that Walmart’s best days could be behind it. With increasing competition from digital retailers and a number of problems internally, industry experts predicted that the giant retailer was due for some hard times. Half a decade later, times and fortunes have changed dramatically. Instead of folding, Walmart’s massive store network and finely tuned logistics systems have given the company a strong foundation for the speed and efficiency needed to excel in the ominchannel shopping environment. And, its commitment to finetuning both its online and brick-and-mortar strategies has resulted in the Bentonville, Ark.-based company’s impressive sales and profit resurgence. The result: a company that many

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now say is big enough, strong enough and tough enough to give the online retailers, especially Amazon, a run for their money. For these reasons, Walmart has been named the Drug Store News 2019 Omnichannel Retailer of the Year. “We’re really working to build an ecosystem and have several different delivery methods that allow us to serve all customers,” Steve Bratspies, executive vice president and chief merchandising officer at Walmart U.S., said in a presentation at the Goldman Sachs Global Retailing Conference in September. “We just want customers to choose Walmart — whether you want to come to shop the store normally, you want to pick it up at the curb or we bring it to your house, we’ll do it however you want, but we just want to capture as many customers as we can and serve them as broadly as we can.”

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Retailer of the Year Congratulations on such a well-deserved achievement! We greatly admire your efforts and value your wonderful partnership.

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COVER STORY So how is this company pulling it off? First, Walmart has been capturing an increasing share of the estimated $19.9 billion U.S. grocery e-commerce pie, and it is well positioned to continue to gain share. U.S. grocery e-commerce sales are expected to more than double by 2023, according to June research from eMarketer. Walmart said its e-commerce sales grew 40% last year, which also includes revenues from Walmart Marketplace, the platform it hosts for third-party sellers, akin to Amazon’s vast retail portal. The company’s physical size, with some 4,769 stores across the United States, also gives it the opportunity to use its stores as fulfillment centers for both delivery and click-and-collect services. “Pure scale gives them a huge advantage,” said Dave Weinand, co-founder and chief customer officer at digital consulting firm Incisiv. “Their store network alone provides the ability for Walmart to fulfill orders closer to shopper’s proximity, therefore speeding up delivery and keeping costs down.”

Walmart said its e-commerce sales grew 40% last year, which also includes revenues from Walmart Marketplace, the platform it hosts for third-party sellers. The growth of Walmart’s click-and-collect service, which Walmart offers at no charge to customers, has been a key driver for the company’s online sales. “Click and collect has been a really big success, and it’s one of the reasons we’re rolling it out as fast as we possibly can,” Bratspies said at the Goldman Sachs presentation. “We’ll hit 3,100 stores by the end of this year, and it continues to gain momentum. It’s proving to be highly incremental to our business, and bringing in new customers with strong repeat.” He also said that the average basket size of a click-and-collect order is about two times what a standard grocery basket is. In addition, the mix of product also is a slightly different mix for online orders, he said, with stronger sales of organic and healthy items. Another factor is that Walmart continues to expand its omnichannel offering beyond click and collect, with more than 1,100 stores now offering home delivery, and the recent expansion of Delivery Unlimited, an Amazon Prime-type offering that allows customers to receive free grocery delivery for a yearly fee of $98 or a monthly fee of $12.95. The program, tested in four markets earlier this year, is being rolled out to 1,400 stores in 200 markets around the country. Earlier this year, the company began rolling out next-day delivery and is eyeing the rollout of in-home delivery by year-end to several markets, through which the company enters customers’ homes to drop off products when customers are not present.

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WALMART BY THE NUMBERS

Walmart’s e-commerce sales rapidly have been gaining steam as the company rolls out home delivery and click-and-collect services across the country. At the same time, the retailer has been driving comparablestore sales growth at its brick-and-mortar stores, in part through remodels and improved merchandising. Here are some quick facts from its recent earnings reports that reflect the company’s rapidly growing omnichannel empire: • The company said its e-commerce sales grew 40% last year. In August, Walmart confirmed previous projections that U.S. e-commerce sales would grow 35% in the current fiscal year after growing 37% in each of the first two quarters, including strong growth in grocery e-commerce. • As of the second fiscal quarter, Walmart said it had surpassed 1,100 delivery locations and has more than 2,700 pickup locations. • By year’s end, the company expects to offer same-day grocery delivery at 1,600 stores and grocery pickup from 3,100 locations. • Walmart’s NextDay delivery service now covers about 75% of the U.S. population. • In-home delivery will be rolling out by the end of this year in Pittsburgh; Vero Beach, Fla.; and Kansas City, Mo., and will be available to roughly 1 million customers. • Walmart Marketplace lists about 75 million items from third-party sellers. • Walmart expects U.S. comparable-store sales growth of close to 3% for the full fiscal year. • In the second quarter, the company reported comparable-store sales growth of 2.8%, its 20th consecutive quarter of positive comps. On a two year stacked basis, comp sales were up 7.3%, the strongest growth in more than 10 years. —Mark Hamstra

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COVER STORY Grocery and CPG Expertise

Walmart’s strong focus on grocery and CPG retailing over the years, as opposed to the general merchandise focus at Amazon, has positioned the company well for e-commerce growth, said Laura Kennedy, vice president of the retail, sales and shopper practice at Kantar Consulting. “I think the key for Walmart is to remember that two-thirds of its sales come from consumables,” she said. “Amazon has by some measures taken over the mantle of being America’s mass retailer, but Walmart really has become a supermarket when it comes to their revenues.” That plays right into the increasing consumer interest in online grocery ordering, whether for home delivery or click-and-collect service. “It’s still a pretty low percentage of all food and consumable sales that are online, but it’s growing very fast,” Kennedy said. “That allows Walmart to capitalize on where it has expertise, which is food and consumables, and it capitalizes on their stores. Any longterm omnichannel strategy for Walmart really has to find a way to use the stores.” As e-commerce has grown to become an increasingly large proportion of retail sales in the United States, many brick-and-mortar retailers have struggled to retain the sales volumes necessary to cover the overhead required for having physical locations that have become less and less relevant.

THE FUTURE

OF BRICK-AND-MORTAR While Walmart hasn’t been forced to close a lot of physical locations like other retailers have, it also has slowed its once torrid pace of openings significantly. In the second quarter of this year, Walmart opened just one new Supercenter and closed one Neighborhood Market for a total of zero net stores growth. It also remodeled about 150 locations, a trend the company said it expects to continue as it invests in improving the store experience and in technology to drive increased sales rather than additional square footage. “I don’t foresee them building a lot more stores,” said Laura Kennedy, vice president of the retail, sales and shopper practice at Kantar Consulting. “In 2019, they plan to build fewer than 10 more stores in the entire United States across all of their United States banners. Unless you are a discounter like Dollar General, we do not see many retailers increasing their store footprints going forward.” Lee Peterson, executive vice president of thought leadership and marketing at consulting firm WD Partners, described the two trends emerging for retail store development going forward as “smaller” and “better.” “Smaller” reflects the trends toward not only smaller physical stores,

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but also fewer stores. And “better” reflects the need for more customer-relevant experiences within the actual stores. Although Walmart relies on its massive Supercenters for the core of its retail operations, Peterson said he thinks the company could be looking at the opportunity to build smaller stores that focus on the “showrooming” concept, where some items would be displayed for customers to inspect, but purchases would be made digitally, either for home delivery or delivery to the store for pickup. He cited Walmart’s 2017 acquisition of apparel retailer Bonobos as a clue to Walmart’s thinking. “They bought it to help them figure out how to do a showroom store,” Peterson said. The ongoing growth of e-commerce will continue to reduce the need for massive physical stores, he said. And the experience within the remaining stores will need to improve, with better customer service and more attractive physical merchandising to generate excitement around product and encourage customer engagement. “Physical retail in the future is going to be half fulfillment center, half playground,” Peterson said. “Gone are the days of ‘stack it high and let it fly,’ that’s for sure.” —Mark Hamstra

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Walmart’s strong focus on grocery and CPG retailing, as opposed to Amazon’s general merchandise focus, has positioned the company well for e-commerce growth. Walmart, however, has put its vast network of stores to good use as hubs for its delivery and click-and-collect operations. “All of these brick-and-mortar retailers that are still around are finding ways to get productivity out of the store asset as part of their omnichannel offer,” Kennedy said. “In Walmart’s case, it’s using the store as the depot for online grocery. That’s always, for me, the headline when it comes to Walmart’s omnichannel strategy.”

In-store Improvements

Key to driving Walmart’s success both online and in store has been its efforts to improve the quality of its grocery offering, analysts said. The company has invested heavily in improving its fresh foods offering and rolled out extensive remodels and renovations. “We’ve seen a lot of improvements, and a lot of acknowledgement of that by shoppers,” Kennedy said. Speaking at the Goldman Sachs conference, Bratspies said Walmart’s efforts around produce in particular have been comprehensive. “We think we’ve made pretty significant progress in fresh over the last couple of years,” he said. “We’ve worked on how we source, who we source from, the quantities that we’re sourcing, how we then move that through our supply chain more efficiently, and how it gets unloaded at the back of a store.” Walmart almost has completely changed all of the process involved in stocking and culling produce, and has entirely revamped the merchandising and the layout, in addition to investing in price. “There’s more work to be done and more opportunity, and we’re not nearly as good as we need to be and will be, but we feel like we’ve gained a lot of momentum, and that’s resulted in share growth there,” Bratspies said. Similarly, Walmart also has taken steps to improve the other areas of fresh. The company reduced its assortment in bakery, “dramatically improved the quality,” Bratspies said, and focused on item price merchandising, all of which have driven “dramatic” improvements in that category. “We feel pretty good about momentum that we have and the improvement we have in the fresh side of the business,” he said. In dry grocery, the company has focused on product adjacencies to make shopping “more intuitive” for the customer, Bratspies

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THE COST OF E-COMMERCE

Walmart has a long history of driving profits through high sales volumes of low-priced items at thin margins, but not even Walmart’s efficiencies are enough to make money selling groceries online. “They don’t know when they won’t be losing money on grocery,” said Laura Kennedy, vice president of the retail, sales and shopper practice at Kantar Consulting, noting that Amazon also struggles to drive profitability on e-commerce. “This is not a problem unique to Walmart, of course.” Walmart is experimenting with ways to make e-commerce fulfilment more efficient, however, through the use of robotics and automated fulfillment centers, and by creating efficient systems for its in-store order pickers. “It just costs them a lot to have somebody walking around the whole store and picking that order,” Kennedy said. Walmart also has said that as it encourages customers to add more higher-profit items, such as apparel and hard goods, into their grocery baskets, it could help to make grocery e-commerce more profitable. Lee Peterson, executive vice president of thought leadership and marketing at consulting firm WD Partners, said Walmart to some degree has committed to being an omnichannel leader, and that means spending heavily to capture customers before worrying too much about making money on the business. “I think the thought now is, ‘We just have to do it, and then figure it out,’ which to me is correct,” Peterson said. “Everybody talks about the cost [of online grocery], but to me the question is, ‘How much does it cost you not do to it?’” he said. “That answers the question of why Walmart is moving so fast. They don’t know yet if it is going to be profitable, but they are not going to just sit there and someday pay for the cost of not doing it.” —Mark Hamstra

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COVER STORY said. Private brands and price investments also have played key roles in driving center store growth. “We feel pretty good, in general, about the holistic body of work that we’ve done in the grocery business,” he said. “Share has improved and continues to grow, which we’re excited about, but we also realize we have a lot of opportunity in front of us.”

Focus on Health Care

One of the areas where Walmart eyes considerable potential future opportunity for its brick-and-mortar locations is through the offering of health-and-wellness services. The company recently debuted a new retail concept called Walmart Health at a newly remodeled Supercenter in Dallas, Ga. The clinic is partnering with local healthcare providers to offer primary care, testing labs, counseling, dental, optical, hearing, nutritional services and fitness, along with health insurance education and enrollment. Walmart said the clinic, located outside the Supercenter with its own entrance, will offer “low, transparent pricing for key health services for local families, regardless of insurance status.” Lee Peterson, executive vice president of thought leadership and marketing at consulting firm WD Partners, said Walmart sees a big opportunity to offer its core customers affordable healthcare services, particularly in rural areas where the retailer has deployed a vast network of stores. “Walmart’s customers are the people that are directly affected by poor health care, or the high cost of health care,” he said. “Their idea is, ‘Why can’t we provide some of that? Why can’t we basically have clinics everywhere? Let’s become a high-quality healthcare provider for all of our customers.’” According to a Sept. 28 report in The Washington Post, 80% of rural America is considered “medically underserved.” Rural areas include 20% of the population, but only 10% of the doctors, and the number of doctors in those rural areas is expected to continue to fall over the next decade. In addition, with the massive baby boomer population needing more and more healthcare services as they age, such clinics as Walmart Health could be an important avenue for revenue growth, Peterson said, adding that he expects Walmart to test a range of different styles of clinics in different markets to meet the needs of the specific demographics for each.

Jet.com’s Role

The 2016 acquisition of Jet.com, which sells a range of products online using a unique discount model, gave Walmart a significant boost not only in its online presence, but also in e-commerce expertise, with the addition of Jet.com co-founder and CEO Marc Lore to its team. “They brought him in because he was going to teach them how to get better at selling stuff online and push through a lot of the parts of an omnichannel experience that shoppers feel are table stakes like two-day shipping, next day shipping, the ease of navigating the website — all things that I think Walmart now can check the boxes on, but continues to work on and try to improve for shoppers,” Kantar’s Kennedy said.

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One of the areas where Walmart eyes considerable potential future opportunity for its brick-and-mortar locations is health-and-wellness services. Recent reports, however, have indicated that the company has been shifting its support toward its Walmart.com business as opposed to Jet.com. In June, for example, Walmart announced that it would integrate several of Jet.com’s technology, product and marketing teams into the Walmart.com business. Media reports at the time said the move signaled that Jet.com was becoming less important to Walmart. “Jet.com brought Walmart much needed digital-first talent in people like Marc Lore,” said Weinand of Incisiv. “Lore was given the autonomy to experiment and innovate, and as we’ve seen with rollouts like the Delivery Unlimited program, they are making strides in keeping up with Amazon.” Weinand said Walmart appears well positioned for the future of e-commerce. “Walmart built its business on supply chain efficiency, and it continues to excel in this area,” he said. “Their online/in-store fulfillment and increasingly mature delivery options provide a best in class competitive advantage over other retailers.” dsn

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COVER STORY

AIMING HIGH

Walmart’s pharmacy operations focus on patient experience, pharmacist empowerment By Sandra Levy

Walmart has a long history in retailing and pharmacy operations, and the company is continuing to expand its clinical offerings, while ensuring that pharmacists practice at the top of their license, so that patients benefit by getting quality health care. Karim Bennis, Walmart’s vice president of strategic planning and implementation for health and wellness, said that given today’s increasingly competitive pharmacy landscape, Walmart knows now more than ever that consumers are looking for quality, accessible and affordable solutions in health care. “We are committed to being part of the solution for American families, both in our pharmacies and across our healthcare offerings,” he said. That the Bentonville, Ark.-based retailer also is working hard to continuously improve its customer experience is evidenced by the recent launch of its “Pharmacy of the Future” pilot, which includes state-ofthe-art automation, an elevated customer experience and an expanded suite of services to deliver the highest convenience, experience and quality of service, Bennis said. JoLynn Coleman, director of Walmart’s pharmacy clinical services, said the retailer supports its pharmacists in operating at the top of their license as the practice of pharmacy continues to evolve across all states. “We offer a wide range of clinical services, such as year-round immunizations in 49 states and Puerto Rico,” she said. “Our pharmacies, where allowed in the state, provide CLIA-waived screenings and, in select locations, rapid diagnostic testing. Our MTM/adherence program includes adherence outreach, gaps in therapy, targeted and comprehensive medication reviews, medication synchronization, refill reminders, and messaging.” Coleman also described Walmart’s efforts with naloxone dispensing and counseling, as well as its prescriptive and specialty pharmacy services. “Our pharmacists prescribe and counsel on Naloxone, and are engaged in a comprehensive opioid stewardship program. In specific locations, we offer prescriptive services, including hormonal contraceptive prescribing and treatment for minor ailments. We have a full service specialty pharmacy and also offer select specialty products in our retail locations.” Walmart’s pharmacy staff provides screenings in more than 4,200 locations nationwide and, through Walmart Wellness days, has administered over four million free screenings, including blood pressure, BMI and total cholesterol. Walmart also is addressing the growing trend in the pharmacy industry — pharmacists collaborating with other healthcare providers. “Our pharmacists are a valuable member of the healthcare team, and we empower them to collaborate across the healthcare spectrum — from doctors and midlevel providers to specialists in various fields,” Coleman said. “Our pharmacists are well placed to coordinate care for patients with multiple providers and specialists to help ensure all the medication and services they receive are working together appropriately for the best outcomes for the patients. Collaborative practice agreements are in practice, where allowed in the state, for immunizations, rapid diagnostic testing, health screenings for public health, oral 46

contraceptives, and naloxone dispensing and counseling.” Walmart pharmacies also are responding to the increasing number of patients with chronic conditions who may be on multiple drug regimens. Coleman said that through medication therapy management, medication synchronization and comprehensive counseling, Walmart’s pharmacists work to make sure that patients can manage their chronic disease and their medication therapy. “Additionally, we leverage digital tools to help the patient manage adherence to their medications,” she said. The company also is aiming to be innovative when it comes to pharmacy services. “We continue to work to reach patients where they are and serve them where they want to be served.” Bennis said. “This includes looking at solutions for busy families, as well as our senior population. We have a unique ability to combine healthy food, nutrition, medication and health services to the community, and we will continue to look at ways to expand these offerings to our customers.” Walmart currently is investigating opportunities for offering further convenience with LocalRx — its after-hours pickup lockers — health service rooms, and opportunities to integrate pharmacy pickup with grocery pickup, where allowed by law/regulation, Bennis said. The company also is pushing the digital envelope in the pharmacy space. “Currently, through our mobile app, customers can easily connect and manage their family’s health,” Bennis said. “By connecting innovative solutions like Narxcare into workflow, our pharmacists are able to provide optimal clinical care with a focus on patient safety. In the future, we are looking at telepharmacy options to integrate with our LocalRx offering.” As far as the future of Walmart pharmacies, Coleman said that Walmart is committed to saving people money, while providing them the highest quality of care. “Our pharmacists have a trusted relationship with their patients, which is central to our commitment to helping people save money, so they can live better by providing access, affordability and quality.”

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A Natural Progression Following success in specialty chains, natural and organic beauty is exploding at mass retailers. Now what? By Debby Garbato

B

ack in the 1970s, “natural” and “organic” conjured up images of love-beaded hippies, homemade soap and rustic bowls filled with hummus and granola. Offered by niche companies and home-based entrepreneurs, products were sold mainly in small health food stores and co-ops. In the 2000s, the picture dramatically changed. Large natural products supermarket chains, social media and online influencers began educating mainstream consumers about ingredients, sustainability and small, specialty suppliers. Sales of natural and organic foods skyrocketed, with everyone from housewives to stockbrokers embracing healthy options. Within a few years, grocery, drug and mass retailers had the sales and customer volume needed to enter what was once a limited market. Natural grocery chains even had trained consumers to pay higher prices, alleviating sticker shock when merchandise went mainstream. Natural and organic health and beauty care now is following in the footsteps of food. Over the past 12 to 18 months, it has been exploding in traditional big-box chains. In a sense, Whole Foods Market, along with Natural Grocers, Sprouts and other natural products chains, have become victims of their own success. “Ten years ago, you visited a natural grocery

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NATURAL

store for natural products and a mass retailer for toilet paper,” said Marc De Rosa, director of sales at Dr. Bronner’s Magic Soaps. “Today, you can get everything in one location. There are so many consumers wanting natural products that food, drug and mass have a big enough base. They have good infrastructure, and the power to slim down margins and offer natural brands at slightly lower prices.” The North American natural and organic HBC market continues to grow, having reached $5.6 billion in 2018, reported Ecovia Intelligence (formerly Organic Monitor). The HBC publication Happi projects it will hit $7.7 billion by 2025. Hair care has the highest market share at 9.5%. Yet, natural and organic skin care is the strongest sales driver, according to Ecovia. Natural cosmetics are even bigger, with 2018 sales hitting $36 billion, according to Future Market Insights. In 2019, natural cosmetics should grow 4.8%, reaching $54 billion by 2027. Interest in natural and organic HBC reflects consumers’ growing awareness that what they put into their body is as important as what they put on it.

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“This isn’t so much a ‘trend’ as a natural progression,” said Lindsay Peterson, health and beauty category management team lead for the drug channel at Unilever. “Consumers are increasingly interested in minimally processed foods and beverages containing few or no synthetic ingredients. The next logical step are HBC products with similar attributes.” Unilever and other suppliers are emphasizing plant-derived formulas devoid of aluminum, parabens, sulfates, phthalates and other harmful or irritating substances. Food and Drug Administration studies have linked parabens to breast and skin cancer, said Bryan Williams, vice president at Belli Skincare. He also highlighted consumer concerns over sunscreen ingredient oxybenzone, aluminum salts used in deodorants and sulfates used in shampoos. The importance of ingredients is continually stressed by online beauty influencers, whose impact, numbers and followings keep rising, Williams said. In a 2017 survey of 2,000 Instagram users conducted by jewelry brand Dana Rebecca Designs, 72% of respondents said they made a beauty, fashion or style

purchase after seeing an item on Instagram. Alexis Tobin-Adams, director of body care innovation at Sundial Brands, which is owned by Unilever, said natural and organic bath and body introductions, in particular, are growing faster than nonnatural formulas, especially those from indie brands with online followings. “Retailers are interested in them because of their high online presence and how they curate consumer content,” she said. This puts customers in control. “With more information available, shoppers have become drivers, not passengers, with retailers listening to what they want,” said Alyson Fischer, manager at retail consultancy McMillian Doolittle. “Social media is a hot bed for brands and influencers, and lets retailers take consumers’ pulse.”

Indie and Mega Brands

Often sustainably produced and not animal tested, natural and organic HBC is coming from both new and established suppliers. Some have offered natural products for decades and are widely distributed. Others have launched or purchased natural lines.

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NATURAL

There also are small companies that started in specialty channels or e-commerce and want to enter major chains. Launched in the 1940s, Dr. Bronner’s Magic Soaps and its quirky, eponymous founder generated a loyal hippie following in the 1960s and 1970s. Over the years, the soap was joined by natural toothpaste, organic hair care and other products. Only a few items were offered in traditional chains. Two years ago, the scenario began changing. Year over year, Dr. Bronner’s experienced double-digit growth in mainstream channels, De Rosa said. Last year, the brand was featured on Target’s endcaps three times instead of the usual one appearance. “Now, we distribute everywhere,” De Rosa said, adding that more than two dozen private-label knockoffs of Dr. Bronner’s iconic Pure Castile Soap exist. Founded in 1984, Burt’s Bees entered HBC with lip balm, later branching out into skin care and other areas. In 2007, it was acquired by Clorox. Products contain natural oils, waxes and butters and are now broadly distributed, said Matt King, director of marketing. A year

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ago, it unveiled its first cosmetics line at CVS Pharmacy, its biggest launch to date. Working with digital marketer Bazaarvoice, it built a portfolio of consumer reviews that drove sales when the line hit other chains. Burt’s Bees’ other recent introduction, Renewal skin care, brought bakuchiol to the mass market for the first time. The retinol alternative comes from the seeds and leaves of the psoralea plant and does not have harsh side effects. “We’re eager to bring the efficiency of this natural ingredient to consumers at accessible prices,” King said. Tom’s of Maine introduced the first natural toothpaste to health food stores in 1975. Acquired by Colgate-Palmolive in 2006, its widely available offerings include children’s and adults’ oral care, including alcohol-free mouthwash, deodorant, bath and body, and baby skin care. Traditional CPG companies also have entered the natural segment. Procter & Gamble purchased Native in 2017, following a loss of market share to digital competitors, largely in men’s shaving. Traditionally a directto-consumer brand, Native was launched

exclusively at Target last year. Unilever now has several natural lines. In late 2017, it introduced Love Beauty and Planet. These natural shampoos, conditioners and body washes target millennials. Products use a “fast-rinse conditioner technology” that requires less water to rinse them out of hair. The introduction followed a Unilever study that found shoppers want sourcing transparency and ingredients that are recognizable, easy to pronounce and plant based. The brand emphasizes these elements where millennials shop. “Due to better prices, millennials are more likely to purchase at mass or drug than specialty,” said McMillian Doolittle’s Fischer. In July, Unilever bought prestige skin care brand Tatcha, with Asian-influenced products that incorporate green tea, rice and algae. It also introduced Purple Rice Water under its SheaMoisture brand. Also Asian inspired, the hair, body and skin care items contain anthocyanin, or purple rice. Dating back to ancient China, this antioxidant helps skin recover from — and protects against — environmental damage. It also strengthens brittle hair. SheaMoisture is part of Sundial Brands, which Unilever acquired in late 2017. Operating as a stand-alone unit, Sundial also features Nubian Heritage natural deodorants in scents like Raw Shea Butter with Frankincense and Myrrh, Patchouli and Buriti, and Abyssinian Oil and Chia Seed.

The Newcomers

Many smaller natural HBC companies are new to food, drug and mass, or are trying to enter this space. Fostered by their entrepreneurial spirits and online followings, independent brands have close consumer relationships. “They are the smallest, most nimble and closest to the customers’ needs because most were created from a customer turned owner,” said Psyche Terry, founder and chief inspiration officer at Urban Hydration, which supplies fruit- and plant-based hair, skin, bath and body products to H-E-B, Target, CVS Pharmacy and Walmart. “This siloed focus on a problem is something larger brands can’t move fast enough on.” Digital native Dr. Squatch wants to broaden distribution of its vegetarian-based bar soaps. Via Facebook, YouTube and Google, humor and paid advertising have

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NATURAL cultivated a strong male following. Soaps are handmade, using a cold process, said Jack Haldrup, founder and CEO. Nora Pearson Natural Beauty Products’ merchandise is mainly found online, in spas and at farmers’ markets. Its deodorants, cosmetics and skin care merchandise contain magnesium, which relieves nerve pain, as well as sea minerals and antiaging ingredients. Via social media, Pearson has done celebrity gifting at the American Music Awards. Through Instagram, it also has been in subscription boxes. CEO Nora

Pearson now is talking to drug chains. Aromafloria has a Cannafloria collection that includes inhalation pouches, mood mists, bath items, and skin and muscle creams. They contain hemp seed oil, which is rich in vitamins A, E and omega-3, 6 and 9, as well CBD, which is meant to help relieve pain, reduce anxiety and aid in sleep. Merchandise is available online and at Aromafloria’s Huntington Station, N.Y., store. CEO Sharon Christie wants to enter drug chains. However, CBD’s mixed legal standing has generated resistance on several fronts.

It took two years to trademark the name Cannafloria. And when the word posted on Facebook eight months ago, Facebook shut down the page. Christie now is using blogs, newsletters and other formats to educate consumers about the products’ benefits. How much natural and organic HBC will grow remains to be seen. Yet, if it continues to follow the growth path of what the Organic Trade Organization said is now a $52 billion organic food market, the HBC industry has much to be optimistic about. dsn

Beyond the Vitamin Aisle Some retailers are looking at beauty from a 360-degree perspective. By cross-merchandising topical skin care with supplements that address similar problems, retailers generate higher tickets. And consumers benefit from synergistic ingredient absorption, said Lisa Ashcroft, president of Naturally Good For You, which the company stylizes as NaturallyG4U. “It’s beauty from the inside out. When people shop skin care, they realize they can benefit from supplements.” NaturallyG4U supplies both the hair care and supplement categories, which are cross merchandised at Ulta Beauty. Early next year, products will debut in two drug chains. Skin care items have antiaging and hydrating benefits, eliminate toxins, and address blemishes and redness. Ingredients include biotin and other B vitamins, cinnamon oil and boswelic acid. The latter addresses joint comfort. The vegetarian supplements include Daily Kick Start, a combination of B vitamins, green coffee beans and yerba mate that maximizes energy production, boosts metabolism and improves skin hydration. A second

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formulation, Herbal TLC Healing, is a natural alternative to OTC pain relievers. Incorporating tart cherry, 5-loxin and curcumin complex, it supports cartilage and joint function. Reserveage launched its Beauty from Within supplement line at 300 CVS Pharmacy stores in August. Products are merchandised next to the skin care section, said Yamit Sadok, director of brand strategy. “CVS wants to reach consumers shopping these sections, and has created several ‘naturals’ planograms,” Sadok said. “It found that consumers, particularly millennials, are focusing more on natural beauty, not just external, and are buying more supplements.” Reserveage’s Marine Collagen Powder uses sustainably harvested collagen from marine sources to improve skin’s elasticity, firmness and lightness. Its keratin capsules and powders contain 18 amino acids, biotin and minerals that benefit hair and nails. It also offers Collagen Candy, a powder that dissolves on the tongue. —Debby Garbato

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Capitalizing on Consumer Demand, Naturally Hamacher Resource Group, Linkage research highlights trends in natural beauty By Dave Wendland, vice president of strategic relations, Hamacher Resource Group

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atural products, including those in beauty care, once were primarily stocked in health food stores. It was a very specific niche and often ignored by the conventional beauty industry. As consumer habits and behaviors evolved and interest in “cleaner” alternatives accelerated, these products have been propelled into the mainstream market with demand continuing to grow. The U.S. natural personal care market is anticipated to reach $3.17 billion by 2025, growing at almost a 10% compound annual growth rate, according to Grand View Research. This will account for approximately 5% of total personal care market sales. Key categories comprising the most share of this natural market include skin care, hair care and cosmetics. Grand View’s definition of natural personal care suggests that these items not only contain natural ingredients, but also the entire product development process used for their preparation is environmentally friendly. Linkage Research & Consulting and Hamacher Resource Group recently collaborated on research that included consumer surveys and analysis of industry data to determine natural personal care market trends and manufacturer readiness to address demand.

Increasing Natural Purchases

30%

SKIN CARE consumers reported increasing their natural skin care purchases over the last year

SOURCE: LINKAGE RESEARCH & CONSULTING, 2019

Natural Attributes Consumers Are Buying With perspective on which are poised for growth

52%

Natural attributes that are selling

Natural attrubutes poised for growth

Consumers that reported buying products:

Consumers that reported they want to buy:

40%

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35% 37%

All-natural No synthetic chemicals Sustainable Organic Plant-based Contains CBD

Three Macro Trends Emerged:

• Wellness: Consumers are looking to live long, healthy lives and are seeking choices to help them do so throughout all aspects of their life — from stress and the foods they eat to the products they use on their body; • Nature Knows Best: A growing belief among consumers is that “nature knows best,” prompting them to seek products that are closer to what they believe nature intended. After decades of artificially driven ingredients, colors and scents, consumers increasingly are turning to what is pure and natural, and this includes personal care products; and

24%

HAIR CARE consumers reported increasing their natural skin care purchases over the last year

Vegan

SOURCE: LINKAGE RESEARCH & CONSULTING, 2019

• Transparency: Consumers are demanding transparency from manufacturers about everything that is in products because of their desire to be healthy and use more natural items. They expect easy-to-read labels with recognizable ingredients, driving beauty manufacturers to carefully consider their formulation. In

SKIN CARE

HAIR CARE

addition, consumers are looking for responsible behavior claims on the label from both the manufacturer and the manufacturing process. Interestingly, these macro trends are fueling new beliefs and behaviors around beauty — very similar to what happened to the food industry as natural products

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NATURAL BEAUTY INSIGHTS

gained market momentum. “Consumers widely believe that the products they use on their skin, and to a slightly lesser degree their hair, can be absorbed by their largest organ and impact their health,” said Carrie Schaefer, vice president of strategy and marketing at Linkage Research. “These beliefs are driving consumers to question what’s in their products and choose more natural options.” Consumers do not have to make a big leap to connect natural and effective. In fact, according to Linkage Research, 85% of consumers believe that their skin care products can be both natural and effective, and 77% believe the same about hair care products. “As more brands turn to natural, do testing and make performance claims, we should expect to see that consumers will come to demand that natural equals effective,” Schaefer said.

The Natural Beauty Products Consumer Is:

1. Likely to be female: These consumers use an average of 10 products per day; 2. Younger: Millennials and Gen Z make up 60% who report they have increased their purchases of natural products; 3. From any income level: There is no skew by income; and 4. An all-natural food shopper: The majority (52%) prioritize buying all-natural foods for their households. When examining what is most important to these consumers when making a purchase, the Linkage Research study showed the following: • Before any natural attributes, natural beauty consumers place importance on value, brand trustworthiness and availability where they shop; • Natural beauty consumers also seek other key attributes, such as all-natural, free from animal testing, and free of synthetic chemicals; and • The next tier of attributes that appeal to these consumers include organic and sustainable, followed by plant based and vegan. In the chart on the opposite page (“Natural Attributes Consumers Are Buying), the left side shows attributes beauty consumers said they have purchased, and the right side shows attributes that consumers reported not buying yet, but want to buy. All-natural products and ingredients free from chemicals top the purchase list, followed by sustainable, organic and plant based. CBD also is included here as a trending ingredient, and is the most appealing attribute to consumers, indicating future growth in this area. Attention also should be given to such attributes as sustainable, organic, and plant based, which show high degrees of interest from consumers. “Product manufacturers have continued to respond to shifting consumer expectations,” said Julie Bonnell, HRG’s vice president of operations. “They are recognizing the importance of the label for communicating responsible behaviors, such as the purchase of fair trade and sustainable ingredients, as well as use of recycled or recyclable materials. dsn

Six Product Trends Emerging in Natural Beauty Based on Hamacher REsource Group and Linkage Findings Based on Linkage and HRG findings, the following six product trends are emerging within natural beauty: 1. Free From a) Manufacturers are using the “not list” (listing what’s not in a product); b) Quantity of ingredients found in a product have been reduced; and c) Shoppers are being reassured with various certifications that communicate such things as “safe” and “earth-friendly.” 2. Sustainable a) Refillable and recyclable packaging are gaining steam; b) Upcycling or creative reuse (turning unwanted products into new materials) is growing; and c) Reduction in water usage is leading to smaller packages and reduced transportation costs. 3. Organic a) Brands are on the rise produced with organic material touting performance claims that rival conventional brands; b) Organic products have been introduced with moderate price points; and c) Raw, organic ingredient use has focused delivery of non-toxic beauty 4. Plant-based a) Superfoods have emerged that tout added benefits to consumers; b) Combination products now offer nature and science in one; c) Beauty from within based on plant ingredients is gaining notice; and d) Plant-based private brands offered by retailers are expanding. 5. Cannabis a) CBD and other hemp-derived products are growing exponentially and catching the imagination of consumers and retailers alike 6. Vegan a) Although vegan is niche in beauty, it’s worth watching as more Gen Z and Millennial shoppers turn to this diet for health and ethical reasons, and some retailers are promoting an entirely vegan lineup; and b) More affordable vegan products have emerged, as well as targeted forms of vegan ingredients in products from anti-aging creams to deodorants. For manufacturers of natural health, beauty, and wellness brands and retailers that carry their products, the future is bright indeed. A 2019 report from London-based Future Market Insights predicted that the global natural cosmetics market will grow to $54 billion by 2027 based on shifting consumer perceptions around natural ingredients in their cosmetics.

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DEODORANT

Deodorants’ New Image Keeping the category fresh is key to driving sales and profits By Nora Caley

I

n the deodorant category, at least, aluminum is becoming more and more taboo. And, right now the soft metal, a longtime main ingredient in products in the category, is being avoided by a growing number of consumers, causing retailers and suppliers to change their product mix. The reason, some said, is growing evidence that aluminum in underarm products can be correlated with breast cancer or Alzheimer’s disease. While some refute the claim, more and more consumers are reading labels to find alternative ingredients to aluminum. Manufacturers are responding to these demands with new products that emphasize their aluminum-free status on the packaging. Brands also are launching products that answer other consumer demands, including botanicals, other scents or for no fragrances. Also new is a movement away from men’s products and women’s products and towards unisex items. Interestingly, dollar sales in the category are responding well to the change in direction. According to IRI, a Chicago-based research firm, for the 52 weeks ended Aug. 11, sales of deodorants in U.S. multi-outlet stores — grocery, drug, mass market, military and select club and dollar stores — totaled more than $3.2 billion, an increase of 6% compared with the same period the previous year. The growth is partly due to increased prices, as the price per unit at $4.26 was 23 cents higher. Unit volume was flat, up 0.2%.

Rolling Out New Products

Manufacturers said the growth has been driven by innovation. “There is so much change happening in this category,” said Dawn Hedgepeth, vice president of deodorants, men’s grooming, and hand and body lotion at Unilever. “The antiperspirant and deodorant category is now one of the most dynamic categories in personal care.”

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Hedgepeth attributed much of the growth to the introduction of new brands, formats and niche segments — including natural and aluminum-free options across brands. Wellness has been a focus lately in the beauty space, and brands are developing products to meet this need. Unilever introduced products across its AXE, Degree, Dove and Schmidt’s brands in recent months. “We know consumers want choices in everything from ingredients and formats to formulas when it comes to their deodorants and antiperspirants,” Hedgepeth said. “We take the trends that are coming down the pike and act nimbly to bring benefits to market that will add value, convenience and delight to people’s routines.” The new products include deodorant wipes, serum, aluminum-free and natural offerings, and a new product for consumers who suffer from hyperhidrosis, or excessive sweating. Also new is a gender-neutral deodorant in the Schmidt’s lineup.

Everybody Sweats

Gender-neutral products are an emerging trend in deodorants. “When we started four

years ago, retailers wanted us to differentiate men’s and women’s deodorants,” said Kyle LaFond, founder of American Provenance based in Blue Mounds, Wis. “Now they say it’s not important to them anymore, and we don’t need to specify gender-specific products. People wear whatever they want.” American Provenance makes natural deodorants that have such alliterative names as Shotguns and Shenanigans (peppermint, cypress and eucalyptus) and Firepits and Flannel (wintergreen, fir and cedar), the two bestsellers. “We had middle school students come up with creative names,” said LaFond, a former schoolteacher. “It was the last day of school, and we put names on a white board.” While the names are fun, shoppers buy the products because they are free of metals, petrochemicals, sulfates, parabens and artificial ingredients, and are cruelty-free, LaFond said. The natural deodorants contain coconut oil, shea butter, beeswax, aluminum-free baking soda, arrowroot powder and a blend of essential oils. Consumers are educated about ingredients, LaFond said, and they research products online and in stores. “People are on their phones, pulling up ingredients, trying to see what they are,” he said. “Or they are price shopping.” Retailers merchandise the products without any callouts as to which are intended for men and which are for women. Men might wear a lavender deodorant, LaFond said, because they know their significant other likes how the scent smells on them. “We have all these preconceived notions about what masculine is,” he said. “That gets thrown out the window.”

Men’s Products

Not everyone is throwing out the concept of men’s products. Matt Krehbiel, associate brand director at Old Spice, said for more than 80 years, the Procter & Gamble brand

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has been “the authority on the male grooming experience.” Recently Old Spice launched several products to respond to men’s needs. “Traditionally, guys have had a functional relationship with their personal care products, with a focus on basic hygiene,” he said. “With evolving needs and increased diversity, guys are finally openly embracing an elevated grooming regimen, including what they use under their armpits.” Men need, want and deserve nice skin, Krehbiel said, so Old Spice launched its nature-inspired Fresher Collection product lineup, including Volcano with Charcoal anti-perspirant, Wilderness with Lavender anti-perspirant and Timber with Sandalwood anti-perspirant. The men’s side of the category is poised for growth as consumer attitudes change. “It’s really exciting to see the growth of the men’s natural deodorant category,” said Brad Handel, marketing manager at Every Man Jack in Corte Madera, Calif. “Guys are paying attention to what they’re putting on their body.” Every Man Jack makes products such as coconut-based deodorants that do not contain aluminum and are available in Activated Charcoal, which absorbs moisture and neutralizes odor, or Volcanic Clay, which helps kill odor-causing bacteria and absorbs moisture.

Smells Like Success

Another trend is the shift away from scents that mask odors. Easton, Conn.-based Thayers offers deodorants in cucumber and rose scents, as well as an unscented variety. The products contain DeoPlex, or saccharomyces ferment filtrate, a water-soluble plant

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product that contains enzymes. “It’s not covering up anything,” said marketing manager Andrea Gity. “It neutralizes odors.” Gity also said that unscented products are a big trend now. “A lot of people don’t necessarily want a scent,” she said. “Some people are sensitive to scent, and some people don’t want a scent to interfere with their other fragrances.” Thayers is known for its products containing witch hazel. Consumers use witch hazel products on their faces, with the intent of shrinking pores, and the same concept can apply to sweat, Gity said. However, while people are familiar with witch hazel, some education is needed for consumers to know that natural deodorants do not necessarily work on the first use. “People switching to natural deodorant have to adjust,” Gity said. “Your body has to become accustomed to the fact that you’re not blocking sweat glands with aluminum anymore.”

Deodorant or Antiperspirant

One manufacturer that long has specialized in natural products is Tom’s of Maine. This year, the Kennebunk, Maine-based company launched its Natural Strength Deodorant line for women, designed to offer 48-hour odor protection. “Naturals is driving much of the growth in the deodorant category as more consumers are thinking about the products they put on their bodies, and wanting to make healthy choices,” said Justin Boudrow, personal care manager at Tom’s of Maine. He also said that the natural segment is up 75% year to date, and driving more than half the growth in the category.

The brand also extended its men’s antiperspirant line with a new scent, Mountain Spring, that is also available as a deodorant fragrance. “We believe in giving consumers the choice of an antiperspirant or deodorant,” Boudrow said. “Our antiperspirant formula is made with sustainably-sourced aluminum and ingredients derived from plants and minerals to provide 48-hour odor and wetness protection.” He also said that retailers are responding to consumer demands by adding more shelf space for natural deodorants because shoppers who buy natural deodorants ultimately buy other natural products. Unilever’s Hedgepeth said retailers can succeed by engaging consumers in new and exciting ways to help drive trial and sales. The company has developed in-store executions that focus on in-store promotion, product visibility, and display and category education. “We’ve also found success in building purpose-led brands,” she said. “Shoppers want to be a part of something bigger and align themselves with brands that mirror their values.” The values include healthy living, self-confidence and real beauty. Old Spice has been successful over the years because of trusted retail partners that have helped get products into the hands of consumers, Krehbiel said. “We value retailers who are always open to custom campaigns, big insight-based ideas, and product propositions that deliver on real consumer needs,” he said. “Building these into a mutually beneficial joint business plan creates sustainable benefits for our business, the retailer’s category growth and the consumer’s experience.” dsn

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10/10/19 9:50 AM


COUNTER TALK

Being Beautiful Can feeling great about yourself on the outside make someone feel better about themselves? By Laura Fontana

B Laura Fontana, DSN beauty director

eautiful: As an adjective, according to Merriam-Webster, means having qualities of beauty; exciting aesthetic pleasure; generally pleasing. Cool as an adjective means being very good; excellent; fashionable; hip. Compassionate. Kind. A listener. Trustworthy. Thoughtful. Treats others the way they want to be treated. Welcoming. Loving. Grace. Poise. Confident. Speaking up for others. Not only speaking of doing good things, but actually doing them. Engaging with our peers in society regardless of race, demographic or economic status. These are all things that come to mind when I think of someone being “beautiful” and “cool.”

As I think of what makes someone beautiful, I am drawn to and applaud those within our industry who help reshape the mold, including Ulta Beauty’s “The Possibilities are Beautiful” campaign, showcasing a diverse group of individuals — male and female, of all ages, race and economic statuses — to highlight that beauty really is without limits. Today, there are so many environmental and social factors that influence our way of thinking. I see my 6-year-old kids come home from school and ask for a specific piece of new clothing because their best bud has it. This really already is starting at 6 years old? I talk to my cousin, who is a freshman in high school, and see the challenges of being a teenager in 2019, and how our world has changed since I was growing up. I hear stories from her dealing with mean girls at school, being left out for no good reason, and kids being catty. I hear about junior high school students engaging in smoking or vaping because someone thinks it’s cool. I hear daily news stories of

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teens and adults hospitalized due to vaping and wonder to myself how many of these kids were influenced by the environment we live in today. Who did it because they thought what they were doing was cool? As I think of what makes someone beautiful, I am drawn to and applaud those within our industry who help reshape the mold, including Ulta Beauty’s “The Possibilities are Beautiful” campaign, showcasing a diverse group of individuals — male and female, of all ages, race and economic statuses — to highlight that beauty really is without limits. Or, there’s the evolution of Procter & Gamble’s “My Black is Beautiful” campaign to the engaging and thought-provoking “The Talk” campaign, which addresses racial bias and features a young girl being told by her mom that she is beautiful — period, no matter her race. I see Winnie Harlow exude such grace and poise as a prominent model in the industry with vitiligo. Would this have been seen as beautiful 20 years ago in the industry? I think back about all the things I would have told myself 20-plus years ago growing up to give myself the confidence to be more beautiful, to get through life as a stronger, more confident female, who exuded beauty from the inside out. I would want to have built my own path, no matter how hard or uncomfortable it may be. The key, of course, is not to do things or wear things just because the “cool” kids do at school. Instead, just be me and build my tribe early on with people who build me up and challenge me to be a better person. Don’t be the smartest person in the room. Be the one to stick up and speak out for the person who does not have the confidence yet to do it for themselves. As we enter the last quarter of the year and start to reflect on the past 12 months, what can we all do as individuals to make others feel more beautiful? What acts of kindness can be done to make an impact on someone’s day or influence another person’s way of thinking? What does being beautiful mean to you? dsn

October 2019 DRUGSTORENEWS.COM

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COUNTER TALK

Hemp, CBD, THC … Oh My! Educating consumers is key for retailers entering the blazing hemp market By Sharon K. Christie

I Sharon K. Christie, CEO, Aromafloria

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t’s safe to say that after 80 years of being banned in the United States, hemp-derived CBD is having a huge moment. We are just beginning to understand the true potential of this remarkable plant, but one thing’s for sure, consumers are very interested in how CBD can improve their lives. With more than 30 years of experience in the natural health world, I have worked to build a wellness empire by educating consumers and supporting them in their journey to achieve balance. It’s this type of education that’s missing in the current CBD market — and it’s what will set some retailers apart from the rest. Don’t believe that hemp will boost sales and deliver what consumers are looking for? Just look at the current projections. Leading cannabis researchers project that CBD sales in the United States will surpass $20 billion by 2024, according to BDS Analytics. Research company Brightfield Group released a report on July 9, stating sales of CBD products will see growth of over 700% in the United States, with 2019 projected to be a $5 billion year for CBD products. These figures explain why many retailers are taking the opportunity to offer CBD and hemp at their retail locations. They’re sure to get some attention from jumping into this blazing industry. However, throwing CBD oils, lotions and gummies on your shelves alone won’t cut it. This is a confusing space in the natural health world, and retailers need to be able to lead the way. This comes with adequate training and providing education for consumers who are wanting more information. I quickly learned about the power of education at the beginning of my career, when I sought to help consumers achieve homeostasis through the sense of smell. This was back when aromatherapy wasn’t a “thing,” and consumers needed guidance to find results. CBD is no different. In fact, I don’t remember a time when people have been more confused

about a single herb or compound. This has a lot to do with misrepresentations and, well, politics. In the 1930s, hemp was coupled with cannabis and banned from all uses. Since then, it’s been considered a malignant substance that offers no therapeutic or medicinal value. That’s a lot of misinformation to unravel. For consumers to feel safe and secure buying and then using CBD products, they’ll need to be educated first. For this to happen, retailers need to train their employees on the facts regarding CBD and hemp. This way, when a consumer walks through the door and hesitates to purchase a product that he or she knows very little about, the employees will be ready. For retailers who do not train their employees, it’s important to bring in brands that will educate consumers through their packaging. This comes in the form of informative labels and pamphlets. You also can direct consumers to informative websites offered by companies that value education. Education will sell products because, once purchased, a good quality hemp product won’t disappoint your consumer. For the many consumers who wish to take a mindful approach to bringing natural balance back to their bodies and minds, they no doubt will be interested in CBD. Partnering with brands that share these values and wellness goals certainly speak volumes, as spreading the word about how CBD and any natural ingredient can benefit your health is a multitiered system of support. In the process of growing my successful business, I have witnessed the changes that education can make for consumers. I always have made the commitment to keep consumers informed about how they can benefit their bodies naturally, but for this happen, retailers need to stay in the know. As a retailer, it’s in your best interest to join the exploding hemp and CBD market, but for those who want to have a lasting impact and sustain repeat customers, you’ll have to lead with education. dsn

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NEWS

CoverGirl Unveils Addition to Exhibitionist Line CoverGirl is adding to its Exhibitionist line of lipstick with 12 new matte shades that are meant to last up to 24 hours. The new 24HR Ultra Matte products, designed to be lightweight and to hydrate lips during long wear, are cruelty-free like all CoverGirl products. For the launch, the brand has partnered with celebrity makeup artist Ash K. Holm to offer tips on how to get the perfect lip when using the products. The 24HR Ultra Matte lipsticks retail for $9 each.

Neutrogena Collection Targets Dull Skin Neutrogena is looking to make skin care routines a little brighter. The brand’s new Bright Boost collection, which was developed based on consumer research and technological advances in skin care, is focused on the concerns of those looking for bright and radiant skin. “We uncovered that the majority of millennial women (84%) believe that healthy skin is glowing skin, and nearly 4-in-5 (78%) wish there were more products on the market that gently exfoliate skin,” said Kerry Sullivan, vice president of Neutrogena, U.S. skin health at Johnson & Johnson Consumer. The line consists of four items — Resurfacing Micro Polish, Illuminating Serum, Gel Cream, and Facial Moisturizer with Broad Spectrum SPF 30 — three of which are powered by Neoglucosamine, a nonacid amino sugar exfoliant that helps boost surface cell turnover and results in brighter and even-looking skin, the company said. Other featured ingredients include mandelic acid and glycolic acid. “The Bright Boost line is the perfect opportunity to deliver on this unmet need,” Sullivan said. “We tapped into our global network of the brightest young female

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scientists at Neutrogena to develop a breakthrough solution, leveraging the power of resurfacing ingredients like Neoglucosamine technology to boost the skin’s natural renewal process. The result is our powerhouse new offering for brighter, more even skin tone.” Four of the brand’s millennial scientists paired their firsthand experiences with their scientific expertise to develop the four-part collection, the company said. “We as women know what women need, so we designed these products with those needs in mind,” said Anna Rose, principal scientist of research and development skin health at Johnson & Johnson. “To counteract the ‘skin sins’ of our 20s like late nights, lack of proper sunscreen use, poor food choices and even dehydration, we needed to look beyond simple formulations.”

Honest Beauty Makes Walgreens Debut Honest Beauty products are coming to Walgreens. The brand, which was founded in part by actress Jessica Alba, is arriving at 750 Walgreens stores and on Walgreens.com. “As part of our true omnichannel strategy, I could not be more thrilled about our expanded partnership with Walgreens,” said Nick Vlahos, CEO of the Honest Company. “We want everyone to have easy access to high quality and transparent products at prices within reach, and Walgreens is a key strategic partner driving the growth of our footprint nationwide.” Honest Beauty products are cruelty-free and made with quality ingredients that have been vetted by the company’s team of research and development experts, who formulate and test at its in-house laboratories, the company said. This launch also builds on the brand’s previous introduction of the Honest Baby line at Walgreens in March, the company said. “We’re proud to welcome Honest Beauty into our expanding beauty assortment in stores and online,” said Lauren Brindley, group vice president of beauty and personal care at Walgreens. “Now more than ever, consumers have a desire for ingredient transparency and safety, and this collaboration will help us continue to fulfill our purpose of championing the health and well-being of our customers in the communities where they live.”

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FOCUS ON: XTREME BEAUTY INTERNATIONAL

Shaking It Up Xtreme Beauty International is making waves with its focus on ‘newness’ in beauty By Seth Mendelson

T

he right place at the right time. That is how Osman Mithavayani sums up the success of Xtreme Beauty International, a beauty care company that burst on the scene in late 2010 and, in less than 10 years, has grabbed significant attention in the booming segment. Of course, Mithavayani said that making many right moves, hard work, a broad assortment of products and the right price points also have played significant roles in the growth of the Miami Gardens, Fla.based manufacturing company and its OKAY Pure Naturals line of beauty products. Yet, hitting the marketplace just as consumers started demanding natural alternatives for their beauty care needs played a huge role in the company’s initial success. “The whole natural movement was in its infancy and was ready to take off when we started the company in 2010,” said Mithavayani, a vice president at the company and who started the venture with his parents, Ali and Mira Mithavayani. “But we knew right away that we had to be different than the many other companies out there. While we offered similar products to other suppliers, we also knew if we’d offer enough variations across many categories then the retailers and consumers would see our brand as unique.” Castor oil, shea butter and soaps were the first products introduced by the company in 2010. Today, that assortment has expanded into virtually all beauty care categories — including haircare, skin care, bath and body, baby care, pet care and men’s care — with the one exception of makeup, which the company plans to introduce in mid-2020. The company operates out of two facilities — a full-site manufacturing facility and its distribution center in the Miami area. OKAY employs about 100 workers and offers more than 500 items, plus 200 variations, all while selling across 40 countries and domestically in all states.

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“I think what makes us even more unique is the fact that we are a one-stop shop,” Mithavayani said. “We do it all, from designing the products and packaging to research and development, to manufacturing and marketing. When a retailer partners with us, they know that they are getting a company where everything is controlled, from start to finish.” The OKAY brand’s reputation, he said, also has played a major role in the company’s success. “Our reputation in the industry is very good, and it is very important to us that it stays that way,” Mithavayani said. “We have a great quality product, and we support our retail partners with a marketing program that will help push the products through the store.” Plus, as a friendly reminder, he noted that OKAY’s profit margins for retailers are better than many of its competitors, including larger CPG companies. “We realize that retailers have limited space for these products, so it is our job to help them maximize the value of the category per square foot,” Mithavayani said. “It will allow them to make more money from the category without giving it more space.” All of the top officials at the privately held company have high hopes for the future. Mithavayani is quick to point out that even with the company’s strong progress, it still is a relatively small player in the beauty and personal care marketplace. “We want that to change in the near future,” he said. “We are implementing a number of processes to ensure that we get our products into the hands of our retail partners faster and more efficiently. Plus, we are staying ahead of the curve in terms of product introductions. “We will continue to inject what we call ‘newness’ into the beauty category and that will mean more sales, profits and excitement for our retail partners.” dsn

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10/10/19 10:40 AM


PHARMACY | RETAIL CLINICS

Making Care Convenient Retailers across the industry are growing in-store healthcare services By Sandra Levy

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t’s 4 p.m. at the CVS Pharmacy on Main Street in New City, N.Y. A man is having his eyes examined in the optical department, while a woman in another room is inquiring about orthodontics from SmileDirect for her teenage daughter. At a Walgreens in Alachua, Fla., a woman is having routine laboratory work carried out by LabCorp. Inside Gateway Pharmacy, a Good Neighbor Pharmacy in Phoenixville, Pa., a woman is working out in the gym in the pharmacy’s new Victus Health and Wellness Center, where a certified personal trainer, a registered dietitian and a licensed clinical social worker are available for consultations. Scenes similar to these are being played out daily in roughly 3,000 in-store clinics and with numerous other in-store services, through which pharmacy chains, supermarkets, large retail stores and independent pharmacies have expanded their services. Many retailers are moving beyond simply offering clinics designed solely for treating minor ailments and injuries, offering optical, dental, audiology, laboratory tests, health screenings and monitorings, behavioral health, and speech and physical therapy options within the store. With their expansion, retailers and pharmacies have the opportunity to boost revenue from clinic service fees, increase prescription and OTC sales, attract new pharmacy and grocery customers, ensure patient satisfaction and retention, and differentiate themselves from the competition. Their foray into new convenient and lowcost services comes at a time when there is an increased need for them. According to the Census Bureau’s September report, 27.5 million people, or 8.5% of the population, lacked health insurance in 2018, a 9% increase from a year earlier. Additionally, the number

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of Americans covered by Medicaid and the Children’s Health Insurance Program fell by more than 1.6 million last year. MaryKate Scott, owner of Los Angelesbased consultancy firm The Scott Group, said convenient care clinic services appeal to many Americans, particularly those who recently have been edged out of Medicaid eligibility and cannot afford health insurance — which increasingly has become more expensive to purchase — or those who are commercially insured and are very time pressured. “You have this segment who is almost self-insuring. They forego health insurance and bear the risk, and then when they need

something, they’ll turn to a retail clinic and OTC products,” Scott said. “A good portion of these Americans are relatively young and relatively healthy, and about 14.8% of these uninsured are the twentysomethings. They’ve only had a life of digital engagement. They are used to proactively searching for information and making their own decisions. It’s not surprising to see them embrace the retail clinic, which is a way of finding their own solution to getting health care.” Tine Hansen-Turton, founding executive administrator and director of the Convenient Care Association, which formed in September 2006 when there were fewer than 100 in-store

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PHARMACY | RETAIL CLINICS

clinics, agreed that the time is ripe for clinics to expand their services. Sixty percent of people served by more than 3,000 clinics today don’t have a primary care provider, even if they have health insurance. She said that since “day one, this industry has been about providing accessible, affordable, quality care to people at the community level, and providing care at the right place in the right location.” In-store clinics have adapted to the needs and demands of the population both in terms of where they want care and how they want to receive it. “A focus on convenience really opens up the opportunity for growth in the industry. We are seeing that patient preference for health care and their knowledge about primary care has changed dramatically over the last decade,” Hansen-Turton said. “The full complement of primary care health services available at conveniently located in-store clinics is driven by a community demand pushing and saying, ‘Provide more services.’” This, she said, is market-driven healthcare consumerism in action.

Multiple Models

As more consumers gravitate to in-store clinics, more pharmacies and retailers are forming partnerships with companies that

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With clinics’ expansion, retailers have the opportunity to boost revenue from clinic service fees, increase prescription and OTC sales, attract new customers, ensure patient satisfaction and differentiate themselves. specialize in an array of healthcare services. Brian Owens, Kantar Consulting’s senior vice president of retail insights, believes that partnerships are a less expensive conduit for retailers to expand their healthcare services. “You’re seeing more and more partnerships happening, where the retailers are bringing in the credible or the established companies, where the retailers don’t necessarily have to have the capital liability associated with delivering these things,” Owens said. “You’re seeing a lot more of these services showing up across retail in all

different types of formats and experiences, and geographically, but it’s less in the traditional sense, where they are going to bill it themselves or run it themselves. You’re seeing them doing more outsourcing or consignment relationships.” These partnerships have the potential to catapult retailers into such new areas as behavioral health. A good example is Boston-based Beacon, a large managed care organization that provides behavioral health management, which recently joined CCA. “There is a lack of access to behavioral health services in communities,” HansenTurton said. “That’s a new foray, where a national player is thinking there is space for us in retail pharmacy settings, where we can get care into the community.” Take the case of Walgreens, which jumped on the in-store clinic bandwagon more than a decade ago, and which currently has roughly 400 Walgreens stores that offer a healthcare clinic or other provider retail clinic services. In some markets, the Walgreens Healthcare Clinics are owned and operated by Walgreens, and in other markets, Walgreens has collaborated with Health Systems that runs retail clinics inside its stores. Community Health Network, for example, owns and operates several Community Clinic at Walgreens locations in the Indianapolis market. Separate from retail clinics, Walgreens has a collaboration with LabCorp, through which the chain currently has 52 locations in nine states, and at least 600 LabCorps at Walgreens patient service centers are set to open by 2022. Chet Robson, Walgreens’ acting chief medical officer, said that in addition to the retail clinics, for patients with acute medical needs in its stores, the chain has collaborated with urgent care and primary care providers. In October 2018, in collaboration with Humana, Walgreens opened two Partners in Primary Care centers for seniors in the Kansas City, Mo. area. Since then, a third center also has opened. “The doctors and pharmacists in store are working very well together,” Robson said. “For example, each day our Walgreens pharmacist at each location joins the morning huddle with the Partners in Primary Care team as they plan how best to deliver care to each individual.”

October 2019 DRUGSTORENEWS.COM

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PHARMACY | RETAIL CLINICS

Additionally, Walgreens announced a primary care collaboration with VillageMD. “Together, we are opening up five Village Medical at Walgreens primary care offices in the Houston area later this year. Village Medical at Walgreens will provide a primary care offering for the full adult continuum that will go beyond addressing acute and immediate issues, but rather focus on providing a long-term relationship with their patients,” Robson said.

Rite Aid’s RediClinic model, which has joint ventures with health systems, is yet another example of how partnerships potentially are beneficial. Rite Aid locations in New Jersey have a joint venture with health system Hackensack Meridian. “We serve as a convenient, affordable option for patients with acute needs. RediClinic also provides after-hours care and, when clinically appropriate, functions as an alternative to the more expensive care

settings, such as Urgent Cares and ERs,” said Jocelyn Konrad, Rite Aid vice president of pharmacy and retail operations. “When a patient is not connected to a PCP for continuum of care, RediClinic will make a recommendation based on patient needs. An oversight physician is also provided by our healthcare partner to promote exceptional clinical quality, continued growth for our clinicians and mentorship when needed.” Yet, another formidable player expanding

Planning for Expansion It seems that not a day goes by without a retailer or pharmacy chain announcing their expansion of in-store services, or that they are branching out to deliver primary care. What do retailers that are considering expansion need to know in order to be successful? Understanding the differences between pharmacy services and primary care delivery is paramount. Michael Abrams, managing partner of global healthcare firm Numerof & Associates, said that pharmacies have to learn how to deliver care on a one-to-one level. “Pharmacy has always been part of health care, but not healthcare delivery,” he said. Tine Hansen-Turton, executive director of the Convenient Care Association, a national industry trade association formed in 2006, echoed Abrams’ thoughts. “If you are a pharmacist, primary care is very different. Getting a consultant that understands that market is key for you,” she said. Tom Van Gilder, Walmart’s chief medical officer, said that Walmart worked with physicians, healthcare administrators, patients and caretakers to understand the specific healthcare needs of the community and used that to inform its design plans for its state-of-the-art facility that houses its new Walmart Health center, a stand-alone primary care unit. MaryKate Scott, owner of consulting firm The Scott Group in Los Angeles, advised that because the clinics are a high-fixed cost model, it’s important to ensure that retailers have a high number of patients every day. “You are paying a fixed cost for the provider and for rent. You need a regular stream of patients to ensure that your retail clinic can at a minimum break even, but also contribute to the business. We’ve seen mixed results with operational efficiency,” she said. “It’s a very different business running a healthcare practice like a retail clinic versus running retail, which is selling goods. You need roughly 20-to-25 patients a day, depending on your cost structure and what patients are coming in for.” Additionally, acquiring such clinical staff as nurse practitioners and physician assistants to operate the clinics can be very costly. “In terms of staffing shortage, we’ve seen an exponential growth in nurse practitioners in the marketplace, which is great, but it’s important to be mindful that their salaries are averaging around six figures,” Hansen-Turton said. Before making costly investments in staff, Hansen-Turton advised retailers to

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study their market to make sure it is not saturated. Retailers also need to possess marketing savvy and be willing to spend time marketing their new services. Nick Katra, a pharmacist who was instrumental in launching Victus Health and Wellness Center at Gateway Pharmacy in Phoenixville, Pa., said his pharmacy staff is meeting with local physicians to get referrals, as well as attending community health fairs and using social media. Educating patients in the community also is key. Van Gilder said that Walmart Care Hosts and Community Health Workers onsite will help customers navigate their visit, understand resources and be a familiar presence for regular visits. “We are also working closely with several on-the-ground providers to offer our services, along with specialized community health resources, online education and in-center workshops to educate the community about preventive health and wellness.” Hansen-Turton also recommended securing legal counsel. Being knowledgeable about staffing licensure rules, individual state requirements and HIPAA privacy rules also is imperative for success. “This is very much like setting up traditional primary care practice. You have to hire a lawyer to make sure you set up the right way,” she said. Retailers may benefit from seeking a joint venture partner. While these can be a positive for both pharmacies and partners, Brian Owens, Kantar Consulting’s senior vice president of retail insights, issued a caveat about partnerships. “Control may be a downside,” he said. “In an environment where you’re partnering, they don’t necessarily own the transactions completely. Who is going to get the credit for the service?” he said. — Sandra Levy

October 2019 DRUGSTORENEWS.COM

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PHARMACY | RETAIL CLINICS

clinical offerings is CVS Health, which in June announced a significant expansion of HealthHUB locations at CVS Pharmacy stores across the country, following its HealthHUB pilot in three stores in Houston. Additional locations in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa, Fla., are planned this year, and the company expects to have 1,500 HealthHUB locations operating by the end of 2021. With the new format, more than 20% of the store is now dedicated to health services, including new durable medical equipment and supplies, and new product and service combinations for sleep apnea and diabetes care. With personalized pharmacy support programs and MinuteClinic services, the HUB team cares for patients managing chronic conditions, with a focus on recommending next best clinical actions and driving medical costs savings. Then there’s Walmart, which operates retail care clinics in Georgia, South Carolina and Texas. In September, the retailer debuted the first Walmart Health center in Dallas, Ga., a stand-alone primary

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care health clinic located next to a newly remodeled Walmart Supercenter. Affordable services include primary care, labs, X-ray and EKG, counseling, dental, optical, hearing, select specialty services, health insurance education and enrollment, and community health — nutritional services and fitness. The unit is operated by physicians, nurse practitioners, dentists, behavioral health providers and optometrists. Owens compared Walmart’s latest move into primary care with CVS’ HealthHUB. “They understand that the cost of care is expensive. In a retail environment, if they are able to come up with a solution that appeals to the masses, why wouldn’t Walmart scale that? There’s an opportunity to get into dental, primary care counseling and audiology because that’s what their shopper wants and needs,” Owens said. “In specific communities, they will focus more of these models where there is no rural hospital, and in places where the community is being left behind. Based on whatever the demographic or municipal challenges are, you’ll see Walmart, CVS and other retailers try to

move in to becoming the supplemental care solutions because primary care solutions or systems may be failing these communities.” Scott, who has consulted for Walmart and other leading retailers, agreed that retailers have realized that they can fill a void in communities that lack quick accessible care and, if they offer affordable health care in their stores, they’ll get shoppers to stay in their stores and spend more. “For customers that live paycheck-topaycheck, when prices increase for a truly essential item like health care, they spend less at the cash register. Retailers think about consumers’ share of wallet and what the consumer has to spend in their store,” she said. “They are thinking strategically about primary care and increasing their space for retail health clinics to meet the needs of both the income and time-pressured consumer. Family, food, finance and health are No. 1 on their consumers’ minds. If you spend more on health care, you’ll spend less on other items at a retailer.” Aside from the potential to attract and retain consumers, reimbursement by the federal government is motivating retailers to expand their health services. “We’re moving to a direction where everything in the physical store can be part of a healthcare solution. Walmart or CVS can own or understand how health care is delivered and what goes into it,” Owens said. “This improves their chances of potentially getting reimbursed by the federal government for Medicaid programs and things like that. Building up their infrastructure associated with health care is important because it gives more input into adherence needs and what other things in that store can count as a healthcare solution.” Increasing access to health care close to where consumers live appears to be the new mission of retailers and pharmacies. Walgreens’ Robson said that patients are indeed benefiting from more convenient access by Walgreens offering primary care and urgent care, as well as retail clinics for patients with acute medical needs. “It is part of our ongoing commitment to create neighborhood health destinations that provide retail health services and patient care across the communities we serve.”

October 2019 DRUGSTORENEWS.COM

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PHARMACY | RETAIL CLINICS

Tom Van Gilder, Walmart’s chief medical officer, echoed Robson’s sentiments. “We want our Dallas, Ga., customers to get the right care at the right time, right in their community. We want to meet them where they live. We will use our location in Dallas, Ga., to learn how best to deliver the quality, affordable and accessible care customers want with the goal to take the Walmart Health center model to the other communities we serve,” he said.

Whole-Store Health

One of the experienced players that delivers care where customers live and also shop for groceries is Kroger. The grocer, which purchased The Little Clinic in 2010, operates more than 220 in-store clinics across several Kroger divisions in Ohio, Kansas, Kentucky, Tennessee, Arizona, Georgia, Indiana, Virginia and Colorado. “At Kroger Health, we believe in food as medicine. Kroger’s been America’s trusted grocer for 152 years — we know food. This positions us as the food authority and equips us to really deliver on our food as medicine strategy,” said Marc Watkins, chief medical officer at Kroger Health, who also chairs CCA’s board of directors. One of the areas Kroger has been beefing up

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since 2016 is dietitian services. This involves a registered dietitian who walks the grocery aisles with customers, helping them to find healthy foods. Kroger stores in three divisions currently have nutrition techs, who are considered “nutrition ambassadors” in the grocery aisles. The company is planning to roll out nutrition techs in additional divisions, Watkins said. Kroger also has a food prescription pilot, in which a provider writes a physical food prescription, which the patient then takes to a Kroger store, where their nutrition technician fills the prescription. “We are also working with the biggest health insurance payers on multiple pilots, with the ultimate goal of health insurance covering healthy food for its members,” Watkins said. Gateway Pharmacy also is focusing on nutrition with the addition of a registered dietitian nutritionist and licensed clinical social worker, who can assist with behavior changes related to disordered eating and chronic disease. “We wanted to give people some sustainable lifestyle interventions to help them with their health,” said pharmacist Nick Katra, who helped launch the 2,800-sq.-ft. wellness center in the pharmacy. By offering behavioral health counseling, Owens believes retailers can respond to an unmet need in the community. “It’s a whole new world, especially since the country is facing up to the idea that if you put the cost of behavioral health on the patient and exclude it from coverage and insurance, only a small slice of the populace that needs it is going to get it,” Owens said. Walmart’s entrance into primary care is proof of Owens’ perspective. “Our existing service of the Dallas community, strengths in health and wellness, and low-price leadership make us uniquely positioned to deliver access to key health services that may be currently out of reach for many customers, regardless of health insurance coverage,” Van Gilder said. “We are also working closely with several on-the-ground providers to offer our services, along with specialized community health resources, online education and in-center workshops to educate the community about preventive health and wellness.”

What’s Ahead?

What does the future hold for retailers as they expand in the brave new world of health care? Michael Abrams, managing partner of global healthcare firm Numerof & Associates, described the recent flurry of activity from large retailers as experimentation to see how much they can drive down their underlying cost for the services and how much demand they can build within the consumer segment. “Over time, these nontraditional players will make up their minds about the suitability of the services they’re offering. They’ll choose those that offer the best combination of margins, and ones in which their marketing savvy allows them to leverage all the things they bring in terms of advantages, and that have the least downside risks,” Abrams said. If Rite Aid’s recent success with RediClinic Express is a harbinger of things to come, more retailers will be launching telehealth solutions. Konrad noted that though Rite Aid launched telehealth six years ago, patients began gravitating toward it more this summer after the retailer’s virtual visit was introduced within RediClinic. “It’s a hub and spoke model for RediClinic, so we can touch more patients at more locations with one nurse practitioner or physician assistant and a clinic assistant,” Konrad said. “Utilizing high-tech devices, the clinician can conduct an entire exam virtually, as if it were a face-to-face visit. The devices allow for the patient to participate in the experience, along with the clinician. As the clinic assistant utilizes each device based on the patient’s needs, the patient will see exactly what the clinician is able to see and make the visit as interactive and detailed as the patient would like.” Kroger also has a telehealth service, called Telenutrition, which offers a virtual visit with dieticians from the customer’s home. Noting that health plans are beginning to cover telehealth visits, and many of those plans consider Rite Aid’s high tech virtual visit more similar to a typical clinic visit, Konrad is optimistic about the future. “The consumer really wants the convenience of care, and they are embracing the convenience of care inside retail establishments because it’s a high level of care. You’re not sacrificing anything to come to a clinic inside a drug store,” she said. dsn

October 2019 DRUGSTORENEWS.COM

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PHARMACY | COUNTER TALK

No-Stress Specialty Three steps for improving efficiencies around specialty prescribing and dispensing By Kathy Lewis

F Kathy Lewis, director of product innovation, Surescripts

rom cancer to rheumatoid arthritis and multiple sclerosis to diabetes, complex, chronic illnesses are on the rise. Did you know that nearly half of all Americans (45%) now suffer from at least one chronic disease? That’s a staggering statistic. What’s even more astonishing is the cost of specialty medications used to treat those conditions. According to a recent report by AARP, in 2017, the average annual retail cost of prescription drug therapy for a single specialty drug was $78,781 per year — almost $20,000 more than the median U.S. household income, which is $60,336. Add to that the inefficiencies, delays and rework required to get patients started on the specialty medications they need, and one thing is clear: something needs to change. The good news is that tools and technology exist today and are available within workflows to digitize and streamline the prescribing process, substantively reducing administrative burdens and increasing patient medication adherence. Here are three steps pharmacists and providers can take together to reduce time to therapy and relieve administrative burden when prescribing specialty medications:

1. Cut down on manual tasks.

Based on interviews with pharmacies, currently only 25% of specialty prescriptions are sent electronically, which means a whopping 75% still are handled manually. For prescribers, electronic prescribing means less time filling out paperwork thanks to auto-filled electronic forms and an exchange of information that is automatic, secure and complete. An electronic enrollment form can be triggered when a specialty medication is e-prescribed, enabling automatic retrieval of clinical data such as problems, active medications and allergies from the electronic health record. Automating the referral process and tying it to the specialty script improves accuracy, efficiency and timeliness. The phone- and fax-induced backand-forth that is so common today is reduced, enabling the pharmacy to dispense the script faster

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2. Access the right information at the right time. Four in 10 prescribers believe that prescribing could be improved if they had the right information at their fingertips — particularly when it comes to drug costs. Improving specialty prescribing is possible with the right tools. Prescribers have access to the right information for out-of-pocket costs, availability of lower-cost alternatives and prior authorization requirements, which can significantly reduce the wait time of getting specialty medications into the hands of patients. And if a patient hasn’t talked to the prescriber about cost, pharmacists can access this information within their workflow, enabling them to discuss alternatives and/or savings programs faster, freeing them up to provide face-toface patient counsel.

3. Get it right the first time.

When prescribers encounter barriers to prescribing, roughly two-thirds change or reroute their orders, causing a delay in patients being able to access their medication. When they don’t have the information and they’re unable to input it correctly or completely, the pharmacist has to fill in the blanks, which wastes time and takes clinicians away from treating patients. However, when the prescriber makes an informed care decision by accessing eligibility and formulary information, cost details, therapeutic alternatives and clinical history, the pharmacist receives the correct information. Pharmacists can then fill the prescription quickly and communicate with the patient about administering therapy. Technology has enabled 24/7 communication across many industries, but in health care, the specialty prescribing process has not yet achieved its full potential. Across the prescriber, specialty pharmacy and hub ecosystem, interoperability remains the root of the problem, causing redundancies in communication and work. By further deploying technology at the point of prescribing and in pharmacies, we can enable better care communication and, thus, result in improved, more effective patient care. dsn

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HEALTH | DIABETES

Managing Diabetes Innovations in technology, equipment and education are benefitting patients By David Salazar

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t often can seem like tackling diabetes is like fighting the mythical hydra — cut off one head and two more grow back. As patients with diabetes continue to grapple with perennial problems like blood glucose monitoring, safe injection, and disposal of the sharps they create every day, their ranks continue to swell. Though underlying causes are difficult to address, a number of different companies are coming through with ways to make management easier for patients. The Centers for Disease Control and Prevention peg the number of Americans with diabetes at 30 million — with Type 2 diabetes comprising between 90% and 95% of all diagnosed cases. It also notes

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that over the past 20 years, the number of adults diagnosed with diabetes has more than doubled as the population ages and becomes more overweight or obese. And, by all accounts, it’s a daunting condition to be diagnosed with. Daily insulin injections and multiple blood sugar readings, plus monitoring it in a way that can serve as a resource for both patients and their physicians can prove to be overwhelming. “Most diabetes patients see their physician quarterly or maybe semiannually. In between those office visits the person with diabetes has to manage their disease on their own,” said Brahim Zabeli, CEO at Smart Meter, which makes the iGlucose cell-enabled blood glucose monitor. “Since insulin

was discovered in the 1920s, that’s the way patients have had to treat themselves — pretty much self-managed.” The iGlucose meter is looking to take some of the guess work out of tracking blood sugar readings. Using cellular network technology, the iGlucose meter automatically transmits readings to the iGlucose personal web portal and the company’s virtual health coach — the latter of which offers automatic feedback on readings. Zabeli noted that, most importantly, readings can also be shared with healthcare providers and enables them to provide support to patients in a way that’s never occurred before. Smart Meter, Zabeli said, is looking to

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be ahead of the curve that he anticipates to be picking up steam as more companies develop connected insulin pens and other smart monitoring equipment. “The profound change in this space is one we’re all experiencing in various facets of our lives and it has to do with connectivity,” he added. “It means that the patient is not going to be alone in managing their diabetes. We’re moving away from a world of selfmanagement into chronic care management whereby patients will have the ongoing support of their healthcare provider. By having visibility to the patients readings that healthcare provider will be in a terrific position to provide that support and intervene if necessary.” Big names in the diabetes space also are getting into connected health offerings — among them BD Diabetes Care. Last year, the Franklin Lakes, N.J.-based company rolled out the BD Diabetes Care app in an effort to offer a resource to patients with diabetes. The app was built with input from patients, healthcare providers and pharmacists, said Stacy Burch, vice president of marketing and commercial excellence at BD Diabetes Care. “This is a great tool for helping patients to self-manage their disease,” Burch said. “It can extend the pharmacists’ reach by reinforcing proper injection technique, suggests healthy foods, and provides content curated by

healthcare professionals in alignment with the latest American Diabetes Association practice recommendations. As more things are changing to digital, it’s a way to have a grounding in tools that may help health care providers and pharmacists help patients.” Burch said the app is set to be relaunched in November with new features for a more enriching user experience “It’s a great opportunity for pharmacists to offer support to their patients because it’s like an extension of them,” said Claire Levine, senior manager strategic customer marketing at BD Diabetes care. “It provides education focused on helping patients take action. From proper injection technique and medication-adherence tips to lifestyle and disease management, it’s all here. It’s like giving the pharmacist time back and allows them to offer additional value without having to spend a lot of time with the patient.”

Sticking Points

When patients inject as frequently as those with diabetes do, companies take particular interest in making the experience as painless as possible. According to BD Diabetes Care officials, one easy thing pharmacists can do to engage with patients is talk to them about injecting with shorter needles. “Pharmacists are in a unique position to help make a difference by talking to patients

about is using a clinically recommended needle length,” Levine said, noting that the BD Nano Pen Needles, at 4 mm by 32 gauge, is an ideal size for patients using pen injection devices, and 6-mm-by 31-gauge BD Veo Insulin Syringes are the recommended size for patients using a vial. She also said studies show that patients with diabetes on insulin who received structured injection technique training, including changing to a shorter needle length saw a 1% reduction of HbA1c over 6 months from baseline. “Many people are still using longer needles which is not medically necessary to get through the skin. For many people, we find out that very often patients are not using the shortest needle available — because no one told them that there is a shorter needle available. They’re using what they’re using because that’s what they started on and no one had the conversation with them since.” Another company focused on injection comfort is Owen Mumford, whose Unifine Pentips and Pentips Plus pen needles include the company’s proprietary DiamondPoint and OptiFlow technologies to reduce delivery force and improve drug flow, respectively. The products also come in needles as short and thin as 4 mm by 33 gauge. The Pentips Plus product also is notable because it contains a built-in removal chamber for the pen needle. It allows patients, who may

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HEALTH | DIABETES

not have access to sharps disposal, to safely remove and contain used pen needles until it can be disposed of safely. Indeed, sharps containment and disposal that removes used needles from the waste stream are a constant requirement for patients with diabetes who use sharps on a daily basis. Stericycle’s 2019 Access to Care & Sharps Disposal in the Diabetic Community survey found that 25% of diabetic patient respondents said properly disposing of needles and lancets was one of their biggest concerns, and 27% had not talked with their physician about proper needle disposal and might not be aware of proper disposal methods. The survey also found that 85% of respondents said an at-home disposal kit would help them manage their condition better. For at-home injections, one of the companies looking to integrate disposal is UltiMed. The company’s pen needles, which come in a range of sizes, are available in the UltiGuard Safe Pack, which both dispenses the pen needles and features a built-in sharps container for the used needles. “As we looked at the market, we compared the amount of pen needles and insulin syringes sold into the retail market to the amount of sharps containers that people actually proactively purchase and found a huge gap,” said Jim Erickson, president of UltiMed. “We saw that gap and said, ‘Is there a way we can give people sharps containers free whenever they buy our products?’ and we came up with the

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solution of packaging our product within a plastic box, which happens to be an approved sharps container.” Erickson said that because pen needles are reimbursed by insurance companies, the packaging is, too, making it so that patients who purchase the UltiGuard Safe Pack end up getting a sharps container as a value add. He also said that the company offers co-branding with chains so that patients can purchase the Safe Pack with a trusted name attached to it. BD also offers sharps disposal solutions, including the BD Sharps Disposal by Mail product, and the BD Safe-Clip by Mail offering — a needle clipper that can hold roughly 1,000 needles and then be mailed out for disposal once full. “Through these products, patients can have the appropriate punctureproof container at their home to help ensure that they are going to dispose of their needles appropriately,” Burch said. Pharmacists, given their role as a frequent resource for patients with diabetes who may see them more than their primary care provider, can play a role in patient education regarding safe disposal, said Meg Moynihan, Stericycle’s director of strategic marketing. She said that many patients don’t consider the downstream dangers of improperly disposed of sharps. “Raising awareness around the safety concerns is the first critical role that pharmacists play,” Moynihan said. “And I think the

second is translating that into meaningful action and really encouraging their patients to look around for options available to them for disposal of sharps, which could be something as simple as containers for sale in the pharmacy or disposal receptacle of some kind provided by the pharmacy.” Beyond providing information about safety, pharmacists may soon be playing a more central patient monitoring role. Smart Meter’s Zabeli said that one of the company’s customers has pharmacists managing patients with diabetes under the direct supervision of a physician. He noted that a proposed Center for Medicare and Medicaid Services rule for 2020 would allow reimbursable remote monitoring under “general supervision” of a healthcare professional, which he said would open up the opportunity for more pharmacists to be involved in the reimbursable service, though it would largely be among clinical pharmacists. BD also is aware of the importance of the pharmacist, who Levine characterized as a front-line member of the patient’s care team at a critical point in the patient journey. “The pharmacist is the last point of contact setting them on a positive journey moving forward before the patient goes home and is on their own,” she said. “One of the main reasons why BD’s focus has always been with our retail channels and the pharmacies is because they played such an important role in the treatment paradigm.” dsn

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SELFCARE ROADMAP INSIGHTS

I

n an effort to help retailers better approach the growing self-care movement when configuring the in-store experience, GMDC|Retail Tomorrow has unveiled the Selfcare Roadmap tool. Developed in partnership with Hamacher Resource Group, the tool identifies opportunities, revealing how next practices can reshape the brickand-mortar shopping experience, inspire new merchandising and service models, and provide impact across all aisles. Available to GMDC|Retail Tomorrow members, the interactive tool demonstrates how to optimize the health, beauty, personal care and wellness experience, and drive new ways of profitability by offering more than 140 insights and infographics that can be sorted by category or self-care occasion. Insights include the contents of shoppers’ baskets versus what’s on their lists, as well as geographic breakdown of purchases for various categories and needs. This month, Drug Store News is previewing insights around diabetes management taken directly from the Selfcare Roadmap tool.

CONDITION INSIGHTS

TOP 7 HBW CATEGORIES ON THEIR SHOPPING LIST EACH GREATER THAN 5%

6% other or none 6% pain relief

NUMBER AFFLICTED

6% probiotics

DIABETES

9% skin care

9%

30M

OF THE U.S. POPULATION

INDIVIDUALS

9% hydration 12% vitamins/ supplements

PRE-DIABETES

26%

85M

OF THE U.S. POPULATION

19% diet/nutrition INDIVIDUALS

67%

Key insight: More than 100 million U.S. adults are now living with diabetes or pre-diabetes

OF BASKET

BASKET SIZE AVERAGE HBW VALUE IN BASKET Diabetes Basket Average Basket

$8.

01

PER ITEM IN BASKET

$5.81 PER ITEM IN BASKET

Key insight: Across all of the selfcare occasions studied, hydration was most often included within diabetes shopping basket. The top four categories account for almost 50% of the shopping frequency.

Key insight: Consumer purchases within the diabetes category represented more than 36% of the total basket for the diabetes-focused shoppers.

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LAST WORD

Overcoming The ‘Underserved’ Challenge How retailers are making a difference among those most in need By David Orgel

S 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.

ome problems never seem to get solved. A case in point is the challenge of “underserved” consumers. For many years, we’ve known that a significant portion of consumers lack adequate access to healthy food, pharmacy and other services. They often live in poorer communities labeled as “deserts.” Initiatives from businesses and the government never quite seem to be enough to overcome the hurdles. Yet, all is not lost. I’m starting to see retailers launch new and innovative programs to address their commmunities’ needs and create business opportunities. It’s too early to say if these efforts will be enough to produce transformational change, but they should be put on the radar of other retailers, in the hope that good ideas will spur more good ideas. Let’s start by realizing how big the problem is. A Forbes article from January by Hank Cardello paints a broad picture in describing “overlooked” consumers with unequal access to health.

Yet, all is not lost. I’m starting to see retailers launch new and innovative programs that address their communities’ needs and create business opportunities at the same time. “They are the nearly 40 million Americans living in poverty in 2017, and the 39 million who have limited access to healthy food stores. They are the nearly 73 million who rely on Medicaid; the nearly half of college students who struggle to pay for food; and the more than half of low-income Americans age 50 and older who say they want a healthy diet but can’t afford it.” In outlining innovative solutions, I have to begin with Kroger because of that retailer’s deep commitment. Kroger’s most high-profile initiative has been Zero Hunger | Zero Waste, launched in 2017 with the ambitious goal of “ending hunger in the communities Kroger calls home and eliminating waste across the company by 2025.”

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One of the most unusual components is Kroger’s plan to help fund innovators that aim to battle these challenges. In late August, the retailer awarded grants to seven innovators culled from close to 400 applicants. While these recipients focus heavily on waste reduction, some include components to improve consumer access as well. Berkeley, Calif.-based recipient Replate uses technology to redistribute surplus food to nonprofits in need. Cincinnati-based Food Forest leverages technology to maximize fulfillment efficiencies and reduce waste, and also makes available pop-up grocery store pickup points for high-need neighborhoods. Another retailer outperforming in anti-hunger commitments is Food Lion. It recently unveiled ambitious plans to expand its partnership with Feeding America on an initiative called Food Lion Feeds. Among the goals are to donate one billion more meals by the end of 2025. The strategy is noteworthy for moving forward on so many fronts at the same time. It includes partnerships with anti-hunger groups in Washington, D.C., and San Antonio. It deepens Food Lion’s involvement with 30 Feeding America member food banks across the retailer’s markets. It even provides resources to encourage volunteer efforts. A final initiative to mention just won a 2019 Community Outreach Award from the Food Marketing Institute. Giant Food Stores, part of Ahold-Delhaize, has helped to fund a food insecurity program at the Children’s Hospital of Philadelphia, CHOP. The program, called the Healthy Weight Food Pharmacy, supports CHOP’s existing childhood anti-obesity efforts by making nutritious foods available to participants. The pharmacy is described as the first pediatric hospital-based food bank in the country. All these retailer moves will make a difference, especially if they spur on more innovation to address the problem. I don’t see why that can’t happen, as long as the positive results are measured and the stories are told. Younger consumers in particular tend to favor retailers that help make positive contributions to society. dsn

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Pharmacy Safe

Features: • Easily replace a standard large or small wooden pharmacy cabinet • 77” or 38-1/2”H and 12” or 18”D • Doors made of high strength steel

B-Form Narcotics Safe

Features: • 38”H x 24”W x 23”D • B-rated burglar-resistive classification • 1/2” solid steel door, 11 gauge body • Six roll-out trays with four full width and depth adjustable dividers • Weight: 394 lbs with trays • Base: 44 lbs

Featuring the ESLAudit Electronic Lock. Easy to manage safe access with its integrated USB Port and user-friendly PC application

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OPIOID ADDICTION

IT’S A DISEASE, NOT A CRIME.

Opioid addiction can disrupt the normal, healthy functioning of the brain. These brain changes can be long-lasting, and can lead to the harmful behaviors, without regard to age, sex, or social-economic status. If left untreated, opioid addiction can have serious harmful consequences, including the potential for overdose and death. At Dr. Reddy’s, we know the opioid crisis touches everyone. Our employees are working around the clock to develop life-changing medicines that can help treat this debilitating disease because Good Health Can’t Wait.

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Dr. Reddy’s Laboratories, Inc. 107 College Road East, Princeton, NJ 08540 Tel: 866-733-3952

www.drreddys.com

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