Drug Store News - January 2019

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Vol. 41 No. 1 DrugStoreNews.com


32 One-On-One with Harmony Hemp’s Courtney Roundy

34 Industry Issues Summit Panel discusses enabling patient-facing care

102 Last Word with David Orgel Consulting’s David Orgel

40 Natural REX Awards 2019 Highlighting the top natural product manufacturers


50 Cover Story: Under Pressure

58 Technology and Automation

Retailers aim to set themselves apart amid pricing pressures, e-commerce growth

Patient insights, automation enable clinical efforts

66 News



6 Editor’s Note

68 VMS

8 Industry News

How companies focus on the category’s role in healthy living

22 Mack Elevation Turns 10 The Dan Mack-founded firm celebrates its 10th anniversary

24 Products to Watch Powered by HRG

26 Counter Talk

74 VMS Products 76 Cough-Cold


82 Cough-Cold Products

with AmerisourceBergen’s Kelly Gasper

84 News

28 Counter Talk


with Philadelphia College of Pharmacy’s Daniel Hussar

88 Color Cosmetics Online competitors, social media and influencers change the game

30 Counter Talk with Plaza Pharmacy and Wellness Center’s Jerry Meece

94 Men’s Grooming Innovation drives the category


98 News 99 Spotlight On: Darker Colors

Facebook.com/ DrugStoreNews Twitter.com/ DrugStoreNews

Manufacturers help patients navigate a crowded category



100 As Seen On TV How the multibillion dollar category stays agile

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. 1, January 2019. Copyright © 2019 by EnsembleIQ. All rights reserved.




Merging of the Minds The GSK-Pfizer deal will level the playing field between retailers and this soon-to-be powerful supplier By Seth Mendelson


ot a headache? There’s a good chance you may turn to Advil or Excedrin for relief. Looking for a good toothpaste? Sensodyne may be the answer. Tummy problems? Tums always is at the forefront of consumers’ minds. How about a multivitamin? Centrum is a market leader. These are some of the many well-known and respected brands owned by either GlaxoSmithKline’s or Pfizer’s consumer healthcare divisions — and a reason for the surprising, but not totally unexpected, mid-December Seth Mendelson Editor in Chief/ announcement of the merger of the two. The all-equity Associate Brand deal probably should close later this year, with GSK conDirector trolling a 68% share of the new company. Just like major retailers across the nation — and many may say around the world — manufacturers are aware that they have to combine resources in order to survive the quickly changing retail landscape. This merger, which creates a company with nearly $13 billion in annual sales, will help level the playing field with retailers that are taking their own steps to ensure survival in the coming years. With all the talk of private label and store brands, trusted national brands produced by companies like GSK and Pfizer still remain the backbone of any mass retailer’s operation. Merging two giant operations will create synergies that will save money and muscle that can be used in negotiations with retailers for better deals, more shelf space and greater visibility within their stores.

Just like major retailers across the nation, manufacturers know they have to combine resources to survive the quickly changing retail landscape. But make no mistake about it, this merger is a Wall Street powerplay at heart. The combined company initially will save a boatload of money for both GSK, based in the United Kingdom, and New York-based Pfizer. The plan, company officials said, eventually is to, perhaps in as little as three years, take the new company public and allow both giant companies to take their newfound savings and concentrate on what they do best and what offers the best margins: the pharmaceutical industry. And take this to the bank as well: This will not be the last merger of businesses among the big players in the consumer healthcare and pharmaceutical industries. Rather, this will serve as a sign that getting bigger is vital to any company that wants to thrive in mass retail in the years ahead. Expect more deals in the coming months and years as other companies try to position themselves as key players in the industry. Yes, my friends, the retail battlefield is heating up. Hang on to your seats and get into position to maximize these changes. dsn



An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Vice President, Brand Director Eric Savitch (856) 489-3336, esavitch@ensembleiq.com Editor in Chief /Associate Brand Director Seth Mendelson (212) 756-5160, smendelson@ensembleiq.com EDITORIAL Associate Managing Editor David Salazar (212) 756-5114, dsalazar@ensembleiq.com Senior Editor Sandra Levy (845) 893-9573, slevy@ensembleiq.com Desk Editor Maria Manliclic (212) 756-5093, mmanliclic@ensembleiq.com Online Editor Gisselle Gaitan (212) 756-5138, ggaitan@ensembleiq.com SALES & BUSINESS Beauty Director Laura Fontana (440) 724-4369, lfontana@ensembleiq.com Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Brand Marketing Manager Mary Ellen Magee (856) 419-8411, mmagee@ensembleiq.com Media Production Assistant Betty Dong (212) 756-5134, bdong@ensembleiq.com Director of Audience and Data Gail Reboletti (224) 231-6363, greboletti@ensembleiq.com PROJECT MANAGEMENT/PRODUCTION/ART Vice President Production Derek Estey (877) 687-7321 x 1004, destey@ensembleiq.com Creative Director Colette Magliaro cmagliaro@ensembleiq.com Art Director Amy Kelkenberg PRESIDENT Consumer Goods Retail Business Jennifer Litterick (647) 946-9219, jlitterick@ensembleiq.com CUSTOMER SERVICE Having a problem with your subscription? Send us full details with the mailing label of the last copy you received, along with your telephone number. Write to: Circulation Fulfillment Director, Drug Store News, P.O. Box 3200 Northbrook, IL 60065-3200; email drugstorenews@omeda.com; or call (847) 564-1468 CIRCULATION LIST MANAGER Elizabeth Jackson MeritDirect (847) 492-1350 x 318. REPRINTS PARS International, LF-Reprints@parsintl.com, (212) 221-9595 x435, tinyurl.com/LF-reprints. Single copy price is $15 for a regular issue and $100 for a statistical issue. PERMISSIONS For permission to reuse material from Drug Store News/DSN (ISSN 0191-7587) please access www.copyright.com or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, (978) 646-2600, (855) 239-3415. CCC is a not-for-profit organization that provides licenses and registration for a variety of uses.

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




,5, 08/2 DV RI 129



Xlear-ing Out Sinuses Win over the healthcare professionals, get the product onto retail shelves, and consumers will start scooping it up. That is the strategy at Xlear, an American Fork, Utah-based company that offers a range of natural nasal spray, sinus irrigation and nasal relief products that feature xylitol, an ingredient they said works better than other products on the market. The company has about 14 SKUs across the three segments, including a nasal spray, 12-hour decongestant nasal spray, sinus rinse and cough drops. Xylitol, according to company CEO Nathan Jones, will kill off bacteria in the throat and nose that other traditional ingredients will not fully remove. He also said that the company has the first natural sugar-free cough drop product on the market. “We are spending a lot of time educating healthcare professionals about the benefits of xylitol and how it can mitigate the bad side effects,” Jones said. “Our view is that if we can show the professionals the benefits of our products, and they start telling their patients, these same consumers will go into stores asking for it. That is why retailers need to carry our items. The demand for our products is building.”

Kamedis Gets Federal Approval Officials at Kamedis, a provider of advanced botanical solutions for chronic skin disorders, said the company has received a Notice of Allowance from the Patent and Trademark Office for a patent application involving the company’s Calm Eczema Therapy Cream.

The notice signifies that Kamedis will receive patent protection on the product’s proprietary combination of traditional Chinese botanicals. The patent covers a method of treating atopic dermatitis, using proprietary herbal combinations that affect two main disease aspects, inflammation and secondary infections. Company executives said the herbal combinations effectively



downregulate cytokines that are abnormally elevated in atopic skin, thus mitigating the disease symptoms associated with inflammation. The company’s herbal combinations also elevate expression of human beta-defensins, antimicrobial peptides that are lacking in the atopic skin. The upregulation of the betadefensins helps to restore the innate resistance to microbial invasion and contribute to balanced skin microbiota, the company said. The Kamedis product line also includes botanical-based treatment regimens for acne, dandruff and dry feet. The pending patent on the Kamedis Calm Eczema Therapy Cream will be the first U.S. patent received by the company.

Bio-Kult Highlights Need to Build Immune System With winter in full swing, ADM Protexin’s Bio-Kult is noting that winter is the optimal time to help build up beneficial gut bacteria. The company highlighted the fact that 70% of immune cells reside in the gut’s lining, and that taking live bacterial supplements has been shown to significantly shorten colds and reduce symptom severity. Given the need for multiple strains to build various bacteria, the company offers Bio-Kult Advanced Multi-Strain Probiotic. The product includes 14 strains that are believed to help support the immune system, including Bacillus subtilis PXN 21. Bio-Kult Advanced Multi-Strain Probiotic is available in 30-, 60- and 120-capsule bottles at the suggested retail prices of $14, $25.50 and $49.95, respectively.

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Kellogg’s Unveils Honey Nut Frosted Flakes Classic Frosted Flakes are getting a brandnew flavor. Kellogg’s, the parent company behind the cereal brand, announced the launch of the new Honey Nut Frosted Flakes. Featuring the well-known toasted corn flakes, the cereal also contains a blend of real honey, brown butter and nutty flavors, the Battle Creek, Mich.-based company said. “Honey Nut Frosted Flakes was a tough nut to crack. We knew our fans would be excited for this flavor, and we’re too,” Brant Wheaton, senior brand manager at Frosted Flakes, said. “It was such a fun challenge to combine the two well-known flavors of honey nut and Frosted Flakes to make something completely unique and quite frankly, g-r-reat.” The new launch joins Frosted Flakes’ other flavors — cinnamon, chocolate and marshmallows. Honey Nut Frosted Flakes will be available in a 13.7-oz. size that retails for $3.99, and a 24.5-oz. size that retails for $5.49. Both options hit shelves of major retailers and grocery stores in January.

Hint Intros Flavored Water for Children Hint, a brand focused on creating unsweetened flavored water, wants to help children reach for the water instead of juice. The San Francisco-based company has introduced a new line of products that use the same 200-ml Tetra box packaging as juice for its flavored water. Hint’s waters, which are Non-GMO Project Verified and Whole360 approved, are vegan and do not contain MSG, nuts, soy or gluten, the company said. “We want to help the whole family lead healthier lives,” Kara Goldin, founder and CEO of Hint, said. “I love the idea that we have something for children that helps them fall in love with water at an early age. That’s the real inspiration. And we had so much fun creating this special treat just for kids that they can carry around, throw in their lunchbox and enjoy throughout the day.” “We didn’t have to reinvent the wheel, we took our top-three flavors that made us No. 1, plus a special variety of apple we had been saving just for the kids, and we reimagined and redesigned the packaging and wow, I wish we had had this when my kids were super young.” Hint water for children comes in four fruit flavors — watermelon, cherry, blackberry and apple — and does not contain juice, sugar, diet sweeteners, color, calories or preservatives, the company said. The beverages, which are available for purchase on the company’s website, soon will be hitting the shelves at Costco, as well as grocery and specialty stores nationwide.








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Pfizer, GlaxoSmithKline to Merge Consumer Health Businesses In a deal that could reshape the OTC market, GlaxoSmithKline and Pfizer will be entering into a joint venture, bringing together their consumer health businesses into a single entity. The combined sales of the two totaled $12.7 billion in 2017. The companies said that the all-equity transaction — of which GSK will have a controlling 68% equity interest and Pfizer will have a 32% equity interest — would have a global OTC market share of 7.3%, leading the market in most key geographical areas, including the United States and China. Brands that would be included span such categories as pain relief, respiratory health, vitamin and mineral supplements, digestive health, and oral health. Brian McNamara, GSK Consumer Healthcare CEO, will be CEO of the joint venture, with GSK Consumer Healthcare CFO serving as CFO. GSK CEO Emma Walmsley will be chair. Pfizer will be able to appoint three directors to the joint venture’s nine-person board. “Through the combination of GSK and Pfizer’s consumer healthcare businesses, we will create substantial further value for shareholders,” Walmsley said. “At the same time, incremental cash flows and visibility of the intended separation will help support GSK’s future capital planning and further investment in our pharmaceuticals pipeline. As part of the deal, GSK plans to separate the joint venture within three years of closing through a demerger of its equity interest, listing GSK Consumer Healthcare on the U.K. equity market. This will create two companies — one focused on consumer health, the other on pharmaceuticals and vaccines — and allow GSK to reduce the leverage in its pharmaceutical/vaccines company. “With our future intention to separate, the transaction also presents a clear pathway forward for GSK to create a new global pharmaceuticals/vaccines company, with an R&D approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world leading consumer healthcare company,” Walmsley said. “Ultimately, our goal is to create two exceptional U.K.-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers.” GSK said it expects to see annual cost savings of 500 million pounds by 2022 for an expected total cash cost of 900 million pounds and noncash charges of 300 million pounds. The cash costs will be paid for with roughly 1 billion pounds in proceeds from divestments, and one-quarter of the cost savings are expected to be reinvented into the business. GSK said it expects the transaction to be accretive to its total earnings in the second full year after closing, reflecting the impact of integration timing and costs, with expectations that it will be accretive to adjusted earnings and free cash flow in the first full year after closing. Pfizer expects to see $650 million in peak cost synergies, with the expectation that it will be slightly accretive in the first three years after the transaction closes. The transaction is subject to GSK shareholder approval and the approval from certain antitrust authorities. GSK said it expects the deal to close in the second half of 2019, pending these approvals.


Danone North America Unveils Two Good Greek Low-Fat Yogurt

Ben & Jerry’s Revives Bob Marley-Inspired Flavor

Danone North America

Ben & Jerry’s fans have spoken and made the

is shaking up the yogurt aisle by introducing its latest innovation. The company is launching Two Good, a Greek low-fat yogurt by its Light & Fit brand. Each 5.3-oz. serving of the yogurt contains 2 g of sugar, 12 g of protein and 80 calories per serving, the company said. In addition, each of the yogurts has no added sugar and comes in five varieties — vanilla, mixed berry, peach, strawberry and blueberry. Two Good also is developed by Light & Fit’s patent pending,

final decision on what flavor should make a limited-time encore appearance. The Burlington, Vt.-based company announced that Bob Marley’s One Love ice cream would be hitting shelves once again after receiving 27% of the votes. Other flavors in the running included Peanut Butter Half Baked, Phish It’s Ice… Cream, Chocolate Cherry Garcia, Candy Bar Pie and Nutty Caramel Swirl. One Love is a banana ice cream that contains caramel, graham cracker swirls and chocolatey peace signs. A portion of the ice cream’s proceeds will benefit Jamaica’s One Love Youth Camp, which is run by the Bob Marley Foundation and Partners for Youth Empowerment. “Bob Marley stood for more than just music, he advocated for social change and inspired millions to think about peace, love and equality,” Jerry Greenfield, Ben & Jerry’s co-founder, said. “Ben & Jerry’s has long strived to champion love and social justice, and by partnering with the Marley family, we’re happy to play a small role in supporting Marley’s vision for a sweeter world.” One Love will be available for purchase at retailers nationwide, online and at participating Ben & Jerry’s Scoop Shops. “We’re really excited to see fans brought back a flavor that promotes youth empowerment and social change,” flavor guru Haylee Nelson said. “Sometimes, we just need a little help when we can’t decide ourselves.”

slow straining batching process that removes the sugar from the milk used to make the yogurt, the company said. The yogurt will hit shelves nationwide in February 2019.

Twix Triples the Chocolate with New Cookie Bars Mars Wrigley Confectionery, the parent company behind Twix

and other candy brands, is adding an extra dose of chocolate to the popular cookie bar. The Hackettstown, N.J.-based company unveiled the new Twix Triple Chocolate Cookie Bars, which are made of chocolate cookie bars, caramel and milk chocolate. “Our consumers are seeking chocolate treats that play on texture and crunch,” Twix brand director Michelle Deignan said. “This new flavor takes the classic Twix Cookie Bar our fans know and love and combines it with three times the chocolate to create a new favorite for all chocolate lovers.” Available nationwide at mass market retailers, the brand’s new triple chocolate bars come in a 1.410-oz. singles pack and a 2.82oz. share size.




Six Trends Driving Pharmacy’s Future Where is the pharmacy industry heading as the it focuses on creating enhanced patient experiences? At the DSN Industry Issues Summit (see full panel story on page 34) Chris Dimos, president of retail solutions at McKesson, outlined six key trends, including: 1. Product Mix Shift: “Brands dominated, then a generic wave came in, and now the wave of specialty and biosimilars are taking off. This evolution changes the patient’s experiences with those products.” 2. Government Repositioning: “Were seeing changes in how we’re going to think about government involvement, and as more people age into Medicaid and Medicare, how that will influence our patients’ experiences and our practices.” 3. Pricing Pressures: “These have been around forever. I don’t think anybody

comes in and says, ‘I’d like to pay you more for prescription reimbursement.’ For those retailers in the room, if you do, I’d love to know who that is, because I haven’t seen it in my 30-plus years in the industry. But, there is a willingness to reimburse services that lead to an enhanced patient experience.” 4. Industry Consolidation: “We’re seeing consolidation both vertically and horizontally. These consolidations create both threats and opportunities, but most of the time there’s an opportunity to have new and creative solutions come about.” 5. New Entrants: “Nontraditional health care new entrants are changing and shaping the way that health care will be provided in the future.” 6. Digital Impact: “One of the most impactful trends is consumerism. Patients

Chris Dimos

are saying, ‘I want to take more control of my own journey, and I want to have the tools associated to be able to create that journey.’”


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RangeMe Launches RangeMe Services RangeMe is broadening its offerings for suppliers to help them get products ready for retail faster. The ECRM-owned platform has launched RangeMe Services, meant to help suppliers ensure their products are optimized for discovery and ready for the shelf. RangeMe Services help suppliers find, evaluate and connect with service providers for such needs as insurance, design, packaging, photography and labeling. RangeMe said that all of those elements are key components to being RangeMe Verified, a designation that lets buyers know that a supplier has met all necessary standards that make them business-ready. “In the CPG industry today, speed is king,” said Nicky Jackson, founder and CEO of RangeMe. “If a product isn’t ready to hit the shelf when a retailer needs it, buyers aren’t going to consider that product as a serious contender to add to their product mix.” The company said that while RangeMe Services can help newer brands get their first retail connection, it also can help established brands stay agile. “Because of RangeMe, suppliers understand the prerequisites, and it cuts down on the back-and-forth so we can address their insurance needs and satisfy their requirements very quickly,” said Larry Allred of Veracity Insurance Solutions. Suppliers can learn about providers, watch videos, find other suppliers’ endorsements and request quotes from the RangeMe platform. “Offering suppliers the opportunity to get retailready in a single, seamless environment is good for them, good for retailers and good for the CPG industry as a whole,” Jackson said.



P&G Acquires Walker & Co. Walker & Co., a brand focused on creating health and beauty

products for people of color, announced that it will become part of Procter & Gamble’s portfolio of brands. Founded in 2013, the Palo Alto, Calif.-based company will operate as a separate and wholly-owned subsidiary of P&G, and continue to be led by its CEO and founder, Tristan Walker. “We have tremendous respect for the work Tristan Walker has accomplished, and we are excited to welcome Walker & Co. to the P&G family,” Alex Keith, CEO of P&G beauty, said. “The combination of Walker & Co.’s deep consumer understanding, authentic connection to its community and unique, highly customized products, and P&G’s highly-skilled and experienced people, resources, technical capabilities and global scale, will allow us to further improve the lives of the world’s multicultural consumers.” Walker & Co.’s brands include Bevel, which creates hair products for men with coarse or curly hair, and Form Beauty, which was developed to meet the needs of women with textured hair. “When I started Walker & Co., I set out to build a company that would meet the health and beauty needs of people of color on a global scale,” Walker said. “Having access to P&G’s outstanding technology, capabilities and expertise helps us to further realize that vision, giving us the power to scale and bring new products to people of color, while staying true to our mission and continuing to nurture the loyal community we’ve worked hard to build.”

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Hydroxycut Launches New Formula

Mtn Dew Amp Develops Gamer-Focused Beverage Designed by Gamers Mtn Dew Amp is giving gamers something to cheer about. The Purchase, N.Y.-based Pepsico brand announced the launch of its latest beverage — the Mtn Dew Amp Game Fuel. Created with ingredients that show an improvement in accuracy and alertness, the drink is vitamin-charged, provides a boost of caffeine and was designed for gamers by gamers, the company said. “Knowing gaming is an endurance sport, we carefully listened to what players have been asking for when it comes to a beverage,” Erin Chin, senior director of marketing at Mountain Dew, said. “Mtn Dew Amp Game Fuel is the first-ever drink created with gamers in mind. We worked with gamers to truly understand what they are looking for in a beverage when gaming, then applied what we learned to develop the product.” In addition, Mtn Dew Amp is giving gamers access to various gaming events, leagues and esports team. The first in this initiative is the Call of Duty World League, which took place from Dec. 7 to 9 in Las Vegas. “Mtn Dew Amp Game Fuel shares our vision for growing the audience for esports, and will help us deliver unique experiences for fans at each Call of Duty World League event this season, as well as help create exceptional content for viewers online,” Brandon Snow, chief revenue officer at Activision Blizzard Esports Leagues, said. “Call of Duty World League looks forward to working closely with the Mtn Dew Amp Game Fuel team to develop the most exciting season in Call of Duty World League history.” Mtn Dew Amp Game Fuel is available in four flavors — Charged Cherry Burst, Charged Berry Blast, Charged Tropical Strike and Charged Original Dew — and features a resealable lid. The beverage hits store shelves on Jan. 14, but is available for preorder on Amazon and Walmart.com.



Hydroxycut is introducing consumers to its new innovation — Hydroxycut Ultra Lean. The product’s key ingredient combination and central component, CurcumaSlim, is a combination of alpha lipoic acid, or ALA, and curcumin from the spice turmeric. Iovate Health Sciences International, the makers of the weight loss product, created the ingredient by theorizing on various combinations that would work synergistically in a weight loss supplement, the company said. “I am one of many passionate people who stand behind Hydroxycut, and Hydroxycut Ultra Lean with CurcumaSlim represents our latest innovation. It is a truly effective product that is supported by two scientific studies,” Raza Bashir, vice president of scientific affairs, innovation and procurement, said. “The formula was made from scratch and has been in the works for nearly a decade. It’s a great option for those looking to kick-start their weight loss journey.” In two 16-week studies, men and women using these key ingredients lost an average of 12-to-56 pounds and 4.84 pounds, respectively, while also following a calorie-reduced diet and walking program, the company said.

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A Decade of Relationships Mack Elevation will celebrate 10 years in business this year. Its founder said he is proud of what it has done for the retail industry By Seth Mendelson


an Mack? Let’s just say he cuts an imposing figure in the mass retail industry.” That comment, from one of Mack’s many admirers, sums up his status in the mass retail industry. Not only is Mack an imposing figure — he stands a solid 6 feet 2 inches — but his passion and facilitating demeanor has made him one of the industry’s leading figures and a voice of reason in a world of chaos that is retail in the latter part of the second decade of this century. His firm, Chicago-based Mack Elevation, a boutique sales consulting, executive coaching and training agency, turns 10 years old later this year and, for those who have been to one of his forums, it is easy to say that these events make a difference. “I stir the drink,” Mack said. “My job is to be a catalyst, helping my partners in the room to feel comfortable and trust each other so we can open a legitimate dialogue that will help elevate the thinking in our industry.” The key, he said, is helping people get honest with each other, even feeling a little vulnerability, so they will open up and share the truth of their business and leadership struggles. “I often ask myself, how do I get to the soul of the people in the room,” he said. “What atmosphere do I need to create to help them to open up to each other? How do I create enough value during one of my events that, if I was a vice president of sales at some company, I would want to be there and would want to come back again next time?” Experience certainly taught the 55-yearold Mack a few lessons. He said that he learned many things from his time with larger CPG and emerging firms. He held leadership roles at key companies over the years, spending about 15 years with



Dan Mack

GlaxoSmithKline, seven years with GOJO Industries — inventor of Purell — and as vice president of sales at Dentek Oral Care before starting Mack Elevation in June 2008. “At that point, I felt a burden to create a consulting and coaching practice, where leaders could share ideas and learn from each other in a trusting environment. Leadership is a very lonely place,” he said. “I felt it would be cool to create a place where there was trust between the attendees, and they had a moderator who understood the industry and could help them create highperforming and healthy organizations.” Mack said that he felt his company plays a key role in elevating relationships between retailers and suppliers. “I don’t think there are a lot of strategic relationships out there that are truly win-win,” he said. “I think my group creates strategic discussions that allow all members of our industry to

develop the trust and understanding that is vital for the health of our industry.” Industry officials see what Mack brings to the industry. “Dan has a keen sense of listening to the needs and concerns of all industry stakeholders, and puts forward meaningful solutions and insights to solve the industry’s most pressing problems,” said Wayne Bennett, senior vice president of retail at Cleveland-based ECRM. “The Elevation Forum is a valuable industry share group that provides a much-needed forum.” The future is more of the same, Mack hopes. He has no intention of making his company larger, preferring the hands-on approach a smaller company allows. “Larger is not better, but I have a big interest in being special. In the end, I want to be small, unique and different, but also inspiring to the many people I work with. My vision is to help leaders birth healthy, purpose-driven and high-performing organizations.” dsn






1 #1 #1 #





R E X 2 0 18

Ne w General Market brand with 10 out of the top 25 SKUs within the Multi-cultural category Natural Bath & Body Brand with 2 of the top 10


SKU in the Natural Baby category and the second largest brand

Source: IRI U.S. MULO 52 weeks ending 11-4-18

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HRG Highlights December’s Standouts A look at last month’s hottest launches



Prelief Stir-Ins Powder Packets

DSE Healthcare Solutions introduced a way to reduce acidity of foods and drinks with Prelief Stir-Ins powder packets. The product is a drug-free formulation that can reduce as much as 95% of acids from foods. The powder formulation allows it to be stirred into most beverages or foods, which HRG said could help remove the stigma associated with taking a pill.


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s 2018 came to a close, the new product team at Hamacher Resource Group was unrelenting in its efforts to find the hottest products introduced in December. The Waukesha, Wis.-based company’s team surveyed the 240 products launched across OTC, wellness and beauty. December was a particularly beauty-heavy month, with 195 of the new products (roughly 81% of them) coming from beauty brands, 33 fitting into the wellness category and 12 OTC introductions. The standouts were:

Vanicream Gentle Body Wash

Pharmaceutical Specialties’ Vanicream brand has debuted a wash for sensitive skin. Meant to remove dirt and oils without drying the skin, the product is formulated without chemical irritants or cleansing agents that can be found in other cleansers. The



product is free from dyes, fragrances, lanolin, parabens and formaldehyde.

Meant to be used in concert with the Nasoneb Sinus Therapy System, the company’s Moisturizing Nasal Solution is meant to be less drying than a saline solution. The solution uses a dual-salt formulation and has multiple moisturizers, making it a less

abrasive way to relieve symptoms from dry nose associated with allergies, low humidity, nose bleeds and stuffy nose. i-Health’s up4 brand is introducing a probiotic to store shelves designed to be nonGMO, gluten-free, soy-free, preservativefree, kosher certified and shelf stable. The up4 Ultra Probiotics Vegetarian capsules are formulated with various probiotic strains, featuring 50 billion colony-forming units from nine strains. Mentholatum’s OXY brand has launched an acne scrub that’s meant to get deep into pores. The Volcanic Ash Detox Scrub is made with naturally detoxifying volcanic ash, bentonite clay and activated charcoal, as well as contains dsn






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A Helping Hand Easing uncertainty for patients following open enrollment By Kelly Gasper

F Kelly Gasper, vice president of customer development, AmerisourceBergen


or many patients, the start of the new year means new insurance policies. Updated plans can cause confusion for anyone, but for patients with complicated therapy regimens, it can be especially challenging. Patients may question whether their existing prescriptions will be covered, if their insurance will force them to select another medication, and if pricing will change. Patients need a trusted advisor who can ensure they are understanding and using their benefits correctly without experiencing any undue financial burden. Pharmacists, because of their expert understanding of healthcare benefits, are uniquely poised to counsel patients during this potentially unclear time. Pharmacists can utilize the following tips to support patients as they navigate new plans or changes in their existing coverage, solidify their relationships with those they serve, and bolster loyalty to cultivate a positive business and patient-care environment. • Schedule Surge Support: Pharmacists can expect to see an increase in patient conversations about coverage changes at the start of the new year, following the open enrollment period, and it is important to ensure the business and staff are well positioned to deliver a positive customer service experience during this time. Pharmacists may want to consider surge support to have more experts available to work with patients. In anticipation of peak activity, pharmacists can develop a frequently asked questions resource with responses to common patient questions. By encouraging conversations with patients, pharmacists reinforce their position as a community resource and demonstrate their value through added services — ultimately helping to grow the business. • Communicate Digitally: While opportunities for conversation may occur organically as patients visit pharmacies to fill prescriptions or seek other services, it is important to consider a multichannel approach to best communicate with patients and encourage them to consider


the pharmacist as the primary point of care. For example, incorporating digital media into a holistic outreach plan can increase awareness of services available through their local pharmacist. A pharmacy with a strong digital presence, including strategic social media platforms and email outreach plans, can simultaneously support patient health and extend their impact beyond pharmacy. Pharmacists can use social platforms and email to share customized communications with patients to prompt them about relevant pharmacy offerings, including new insurance plan consultations. • Start Conversations Early: When insurance plan changes come into effect, costs can be a major source of confusion for patients. In some cases, existing prescriptions may no longer be reimbursed at the same rate as they were under previous plans. By proactively engaging patients in conversations about selecting new coverage, pharmacists serve as a vital source of care. One way pharmacists can start conversations early is to work with their Medicare-eligible patients prior to selection of a new plan to help them understand how each option would impact the expected out-of-pocket costs for their entire portfolio of medications. Capitalizing on peak-visit times earlier in the year allows pharmacists to reach a critical mass of patients before they need to make decisions. Each fall’s flu season presents an opportunity to discuss potential plan changes with patients visiting the pharmacy for immunization prior to the close of the open enrollment period. Pharmacists also can leverage technology to assist patients as they explore new plans. Setting up a tablet with Internet access or a kiosk for patients to review coverage details through plan selection tools allows patients to familiarize themselves with options prior to consulting a pharmacist. With early conversations, prepared staffing and teaching tools, patients will feel their pharmacist is a trusted partner in their healthcare journey. dsn











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Pharmacists Versus the Flu Pharmacists’ expertise could help save lives when it comes to dispensing flu drugs By Daniel Hussar

H Daniel Hussar, dean emeritus and Remington professor emeritus, Philadelphia College of Pharmacy University of the Sciences


ave you gotten your flu shot yet? If you’re a pharmacist, of course you have, and you probably have administered them to dozens, if not hundreds, of individuals who come to your pharmacy. According to the Centers for Disease Control and Prevention, more than 80,000 Americans died from the flu during the last flu season — the highest death toll from the flu in four decades — and 900,000 were hospitalized. However, in spite of these statistics, a survey conducted in mid-November by researchers at the University of Chicago determined that 41% of adults responded that they had not been vaccinated and had no plans to do so. This situation is of great concern and would be even more threatening if pharmacists were not authorized to provide immunizations against the influenza virus, and now vaccinate millions of people each year. Vaccinated or not, those who have the misfortune of experiencing the flu have a rapid onset of miserable and even life-threatening symptoms. Pharmacists have the expertise to recognize flu symptoms. We need to state that more boldly — we can diagnose the flu. Pharmacists can distinguish between flu symptoms and symptoms of the common cold, allergic rhinitis and most other conditions with respiratory and other symptoms. Pharmacists know that young children, the elderly, pregnant women, those with preexisting pulmonary conditions, and patients who are immunocompromised are at the highest risk of complications from the flu. The most widely used treatment for the flu is oseltamivir, or the brand name Tamiflu. It inhibits influenza neuraminidase and reduces replication of the virus. It is administered twice a day for five days, but treatment must be initiated within 48 hours following the onset of symptoms if it is to be effective. It reduces the severity of symptoms and their duration by approximately one day. The newest treatment, Xoflusa, or baloxavir marboxil, was approved in October 2018 by the Food and Drug Administration to treat


acute uncomplicated influenza in patients age 12 years old and older. It is a single-dose treatment that like oseltamivir must be initiated within 48 hours of the onset of symptoms, and it is well tolerated. I commend the FDA for its actions that have accelerated the review, approval and availability of baloxavir. However, for faster and more extensive availability and benefit, baloxavir and oseltamivir should be available without a prescription from a pharmacist, and I partially fault the FDA for continuing to refuse to permit selected, safe medications that must be administered on a timely/urgent basis to be available in this manner. The pharmaceutical companies marketing baloxavir and oseltamivir also are at fault for not being proactive in requesting faster and more extensive availability of these medications from pharmacists. But the most important question is: How many of the individuals who will die of complications from influenza during this flu season could have been spared that fate had they been treated with baloxavir or oseltamivir on a timely basis?

Pharmacists have the expertise to recognize flu symptoms. In the meantime, pharmacists should establish collaborative working relationships with local physicians to obtain the authority to provide baloxavir to patients with flu symptoms. Pharmacists should provide documentation of their assessment and services to the patients’ physicians, and both pharmacists and physicians should be paid for their services. If the FDA continues to require a prescription for baloxavir and oseltamivir, pharmacists should pursue action at the state level to obtain legislation and/or a standing order to receive the authority to provide baloxavir and oseltamivir to patients without a prescription, in a manner similar to the ones through which naloxone is now widely available. dsn



Be the ‘Go-To’ Pharmacy for Diabetes Care Suggestions for positioning your pharmacy as a destination By Jerry Meece

P Jerry Meece, director of clinical services at Plaza Pharmacy and Wellness Center in Gainesville, Texas


harmacists have never been in a better position to take on the role of chronic disease managers than in the current landscape with the management of people with diabetes. Too many people with diabetes and not enough healthcare professionals to go around has resulted in less than half of diabetes patients achieving good glycemic control and the desired A1C goal of 7%. Where there is a need there is opportunity. Community pharmacists are in an ideal position to fill the need that patients have in self-managing their disease by becoming the “go-to” pharmacy for diabetes care in their community — the one that can answer all questions about diabetes care or make every attempt to find an answer. The “go-to” pharmacy also carries a higher level of diabetes supplies and has a staff that supports the pharmacist in caring for the diabetes patient. What changes are needed for this to occur? One important change is to utilize staff members to the top of their license and abilities, which means delegating repetitive jobs. It also means getting the entire staff to buy into the idea that the pharmacy is going to become the “go-to” pharmacy for all things diabetes. It also could mean appointing a “chief diabetes technician” to handle such tasks as demonstrating and troubleshooting blood glucose meters, leaving the pharmacist time to discuss the results of a blood glucose value with the patient, or addressing other diabetesmanagement questions. Another change is to gain the confidence and skills to effectively counsel patients through motivational interviewing, using such core concepts as open-ended questions, empathy and reflective listening. This approach allows the pharmacist to convey the appropriate information to the patient while resolving ambivalence, resulting in better outcomes from behavior change. Pharmacists also need to move from being retail pharmacists to clinical community pharmacists, from dispensing products to dispensing care.


The rewards for becoming the diabetes expert and “go-to” diabetes center in your community? Inheriting what we in our pharmacy term the “$10,000 patient.” If someone with diabetes walks out of our pharmacy because we didn’t win them over with our service and knowledge, we didn’t lose the profit on a couple of prescriptions. We lost $10,000 — the amount we estimate a diabetes patient and his or her family would spend with us on prescriptions, OTC items, vaccinations, education, diabetes shoes and supplies over the next three to four years. Few, if any, chronic disease patients will spend as much money in your pharmacy as a person with diabetes. An engaged and informed staff can help recognize these customers, and help increase their loyalty through special services offered, engaging them at every opportunity and being knowledgeable about the special products that people with diabetes require. The successful “go-to” diabetes pharmacy will become as creative in working with its diabetes patients as the airlines are in dealing with their best customers. The end result is a pharmacy that is recognized throughout the professional, as well as the lay community, as a resource for all areas of diabetes care.

Pharmacists also need to move from being retail pharmacists to clinical community pharmacists, from dispensing of products to dispensing of care. The need for diabetes care is great. The opportunity to become the profession that fills the gap of needed care is sitting in front of us. I hope you set as your goal for the coming year to join me in becoming the “go-to” center for diabetes care in your community. I think you’ll find the efforts and overall rewards, both financially and professionally, well worth it. dsn

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Š 2018 Pfizer Inc. Use products as directed.


Poised for Growth Harmony Hemp builds consumer awareness and trust at store level


ourtney Roundy’s interaction with the ill son of a friend led him to start Harmony Hemp. Now, the company hopes to be at the forefront of the CBD explosion at retail. The category is poised to grow even more in 2019, with the recent Farm Bill allowing legalization and regulation of hemp. Drug Store News talked with Roundy about Harmony Hemp and the category in general. Drug Store News: Tell us about Harmony Hemp — from the company’s beginnings to where you are now. Courtney Roundy: In 2016, I began learning about CBD from my good friend whose son was experiencing positive results treating schizophrenia with CBD. Having known my friend’s son prior to diagnosis and after, it touched my heart, and it would be the catalyst for further research and the development of Harmony Hemp. Research has been Harmony Hemp’s primary differentiator. We have delved into several conditionspecific formulations enhanced by CBD as a result of the evidential findings of this remarkable plant and are working on bringing a patented delivery method to market. With 34 years of food, drug and mass experience and existing vendor relationships among all major retailers, I knew I was in a unique position to bring Harmony Hemp’s vast selection of cross-category products to a larger audience and help as many people as possible with their overall wellness. Our motto is “Treat Your System Not Your Symptoms.”

“Hemp products containing CBD clearly provide a more traditional, holistic approach in treating many common health issues.” 32


DSN: You say that everyone should have access to the benefits of hemp? Why? CR: With the myriad of health issues consumers face today, it is important to provide easy access to natural, safe alternatives to prescription medications. Hemp products containing CBD clearly provide a more traditional, holistic approach in treating many common health issues. Treating the endocannabinoid system with CBD will bring homeostasis to individuals and has been found to be a promising, natural treatment for many common health issues. By providing easy access through our retail partners to this miraculous plant, together we can make a difference in people’s lives. DSN: How do we get retailers involved in the category? CR: Historically, CBD has been limited to nontraditional retail outlets and online, which excludes a large segment of the population who could benefit most from CBD. Retailers have an amazing opportunity to introduce quality Harmony Hemp CBD products to their loyal customer base. Trade publications have done a phenomenal job of getting the message across to retailers; it is our job to carry out a more detailed educational piece to our buyers and their wellness teams. DSN: What about marketing, merchandising? CR: We realize it is extremely important to build initial customer awareness and trust at store level. Our ad budget is considerable over the next three years, and we are coming in heavy from the start, we have already begun initiating promo calendars for 2019. Our merchandising options are vast. For example, our 50-unit, crosscategory side panel shipper is the most popular with food, drug and mass as it gives our retail partners major exposure of a trusted hemp brand in the categories of personal care, OTC and pet care.

Courtney Roundy, founder, Harmony Hemp

DSN: How are you supporting your products with consumers? Education? CR:Customer education on lifestyle changes and self-care can help promote consumer wellness. We strive to educate the public on how to “Treat Your System Not Your Symptoms,” and we are working with several physicians to improve the quality of our education materials continuously. DSN: What do you think the future holds for this category? CR: Over the course of my career, I have never seen so much attention given to a single product or been approached by more key-level executives in food, drug and mass. I have seen several items come and go that have had considerable hype, momentum and money behind them, but none with more consumer response and genuine efficacy for a customer’s overall well-being. These are very exciting times. dsn


Upending Challenges to Patient-Facing Care Panelists point to complex hurdles for pharmacists and consumers By David Orgel


here’s often more than one plot line to a story. That’s the case with the drive to improve patient-facing care in community-based pharmacy. In fact, multiple angles were spotlighted during an executive panel at the Drug Store News Industry Issues Summit in New York City in late November. On the one hand, panelists said that patients now have more control over healthcare decisions, and they don’t always find that the existing structure meets their needs. They have a wider range of choices, even as they face continued hurdles ranging from care access to price transparency. “The cost of health care has just escalated to a point where consumers are now in much more control,” said Dain Rusk,



vice president of pharmacy at Publix Super Markets. “It’s no longer just about patients going to their doctor; it’s about bringing health care to the consumer.” At the same time, some said that pharmacists are working harder to deliver outstanding results in collaboration with key partners. They face obstacles in freeing themselves up for more face-to-face time with patients and in overcoming the constraints of traditional reimbursement models. “An important piece is transparency on how we get paid for the improved outcomes, and that we’re providing value to our patients,” said Rina Shah, vice president of pharmacy operations and specialty at Walgreens. “Currently, the targets continue to change and the measurements vary.”

Pharmacists, their partners and patients all face challenges as the industry strives for better patient-facing care.

Identifying Patients’ Unmet Needs

Patients have a lot of unmet needs that need to be addressed, the panelists said. “I believe if we start by talking about the needs of the patient, the solutions will flow through,” said panel moderator Chris Dimos, president of retail solutions at McKesson. Ryan Rumbarger, vice president of pharmacy operations at CVS Health, added that “cost and price transparency are what we hear most about from our patients. We’re all doing different things to try to make prescription drug prices more transparent, and to lower out-of-pocket costs.” Patients also need ongoing education

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DSN INDUSTRY ISSUES SUMMIT about their conditions, even if this isn’t always apparent to them, he said. “Our patients don’t know what they don’t know, and it will be a problem if we’re not proactive with them, in telling them what they need to know, and making sure they understand it,” he said. “For example, ‘it’s important that you take this every day, it’s important that you not skip doses.’ We’re focused on this through a lot of different counseling programs to make sure that our patients have what they need to keep them adherent.” A lingering patient problem is access to care, particularly in certain parts of the country, said Todd Treon, vice president of marketing management at Cardinal Health, which operates the Medicine Shoppe International franchise system. “For small-town patients and rural patients, access is still somewhat of an issue,” he said. “In very rural areas, technology can help through telepharmacy. We, from a Medicine Shoppe perspective, have seen a number of success stories, where there may be a clinic in a county and the next closest pharmacy is more than an hour away. Being able to help fill those acute prescription needs right away improves their care and their access. So there’s progress that can be made.”

Leveraging Tech to Enhance Outcomes

Some of the panelists emphasized that pharmacists are on the front lines of meeting patient needs, but they increasingly are balancing a growing range of job responsibilities. “It’s very difficult for pharmacists to have engagement with the patient, because they’re multitasking through so many different aspects of what a pharmacist has to do today,” said Frank Maione, chief business officer at PerceptiMed. “We have all talked about it, about practicing to the highest level, and they’re not.” Technology can help enable pharmacists to spend more time on higher-level patient services, according to Doyle Jensen, executive vice president of global business development at Innovation. “We feel that we’re helping pharmacists to practice at the top of their license, to differentiate through services,” Jensen said.



Left to right: Moderator Chris Dimos of McKesson with panelists Frank Maione of Perceptimed, Jeff Key of PioneerRx, Clay Courville of McKesson Pharmacy Technology and Services and Todd Treon of Cardinal Health

“The prescription is the same price wherever patients go. If it is delivered to the home, where is that interaction with the pharmacist? So we feel that technology investments we can help leverage with our partners enable them to put the pharmacist back up front.” Meanwhile, Clay Courville, vice president and general manager at McKesson Pharmacy Technology and Services, pointed to a couple of areas for future industry technology investments. “Efficiency is at a premium, and there’s more that we can do to help you become more efficient,” he said. In addition, there’s a growing opportunity for technology to become even more intelligent by providing more insights and answers, and this mission will become more important. “Instead of requiring so much work on the part of our customer partners, what if we said, ‘Here’s the answer, and based on your goals, here are the assumptions we made. Press this button, and it will happen,’” Courville said.

Assessing Generational Impact

The panel noted that one of the important questions for pharmacists is how much emphasis to place on varied patient preferences by generation. Yet, there were

different schools of thought on this question. Most agreed that generations need to be considered, but others pointed out that certain behaviors transcend patterns typical of various age groups. “A millennial with a chronic disease is going to act differently than a millennial picking up an antibiotic or birth control,” said Jeff Key, president of PioneerRx. “So it’s really about understanding where a person is, being able to quickly capture that, store that, respond to it. I think that’s critical, and it has to be in your software, has to be in your workflow, and you have to empower people to figure it out and track it.” Patients from different generations often portray unique interaction styles, said Publix’s Rusk. Publix tends to “over-index” on baby boomers, given its heavy Florida presence. He said members of that generation often are focused on such questions as, “Do we take their Part D Plan? Can we help them pick out a Part D plan? Can we help them be more adherent to their medications?” On the other hand, Rusk said millennials and Gen X-ers often are focused on convenience. “They want to transact how they want, when they want and where they want.” While it is no surprise that younger consumers are more likely to be engaged with



DSN INDUSTRY ISSUES SUMMIT digital platforms, Treon of Cardinal Health warned against broad stereotypes. “We’re finding that some of the older folks, they do need a little digital coaching, but once they receive it, they will interact, and they will enjoy that technology connection to include Facebook videos and mobile prescription refills,” he said. “So I would argue it’s important to personalize things to who the patient is and how they want to interact with you.” All of these considerations need to be figured into technology and service solutions as well, said Rumbarger of CVS Health. “We think of it as more situational than generational,” e said. “But there are people of all generations that are using all different kinds of solutions. So it’s really a matter of making sure that you have a suite of products and solutions that can serve whatever the situation is, whether you’re a chronic patient with a complex disease state, or someone looking for convenience who doesn’t want to leave their couch and just wants their prescription delivered.”

Viewing the Big Picture of Health Care

In addition to targeting specific solutions, Rumbarger said retailers need to assess how their stores fit into the bigger picture of health care. “It’s important to make health care local. This can be accomplished by having a suite of services in the store, having

Left to right: Panelists Ryan Rumbarger of CVS Health, Rina Shah of Walgreens, Doyle Jensen of Innovation and Dain Rusk of Publix Super Markets

the store be a one-stop shop destination,” Rumbarger said. Having a holistic picture of the entire patient, and not just a segment of the patient, so that no matter which area of the store they’re going to, we can point them in the right direction to what that next best action is to really improve their health.” Ultimately, some panelists said it will be crucial to better connect the pharmacist’s activities to the larger health ecosystem to significantly boost patient-facing care. “How we’re communicating with the patient has to change,” said Walgreens’

Shah. “This isn’t just a pharmacy issue, this includes the physician, pharmacist, nurse practitioner and others. Every healthcare professional feels that it’s OK to lecture to a patient, and that by educating and taking a one-size-fits-all approach, the patient will actually listen. They won’t. What we’ve started to do is leverage our various communication vehicles to engage with our patients in a personalized way based on their preferences, so that we can effectively help them understand why their medication is important and what they need to do to be adherent to therapy.” dsn

Boosting the Pharmacy Business Model The biggest pharmacy challenges today include pressure on reimbursements and the search for new income sources to support patientfacing care. This topic was introduced at the DSN Industry Issues Summit with a succinct question to panelists from moderator Chris Dimos, president of retail solutions at McKesson. “Do you believe that a reimbursement for providing great patient care could be accretive to your business model and provide a new profit pool?” Jeff Key, president of PioneerRx, responded by offering two possible futures for pharmacy. The first is an Amazon-type discount model with “really low cost per pill.” The second involves “the future of pharmacies as healthcare providers.” He described this as “moving away from thinking about patients transactionally, to instead thinking more about a patient’s health.” Todd Treon, vice president of marketing management at Cardinal



Health, emphasized the pressure community pharmacies are facing because of reimbursement hurdles. “Change is hard, some don’t want to change,” he said. “Part of what we have to do is to help lead them down that path.” That involves focusing on such patient care strategies as point-of-care testing, especially in states that allow pharmacies to have prescriptive authority, he said. Ryan Rumbarger, vice president of pharmacy operations at CVS Health, said his company’s combination with Aetna might help to explore new strategies that support patient-facing care across the industry. “One of the things that excites me, as we think about vertically integrating as a company with Aetna, is that hopefully we’ll have a chance to show some of that, and hopefully propel the industry, not just CVS,” he said. Rumbarger noted that the goals are to “improve health outcomes and reduce healthcare costs.”



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Wellness, Naturally This month, DSN honors the innovators offering all things natural By Carol Radice


t was not that long ago that pundits could be heard arguing whether the natural trend would have long-term legs, or if it was simply going to be the next fad to capture America’s attention. After all, what appealed to shoppers in other countries, and even within other retail channels, was not going to necessarily translate to mass consumers who in those days shopped more on price than features. Several decades later, interest in natural is burgeoning, and what was once seen as a short-lived phase is now entrenched in virtually every category. In fact, some would go so far as to say natural opened the doors for other more narrowly defined niches to be introduced, among them gluten-free, cruelty-free, free-from products and others. This month, Drug Store News recognizes those companies that have made major inroads in the natural category through product innovation and merchandising. These leaders stood out from a field of companies for their role in helping continue to grow interest in the natural products.

said it developed proprietary manufacturing practices that implement various quality controls at every production step to guarantee quality, standards and reliability. To reduce its impact on the environment, most of Boiron’s medicines that contain plants are wild harvested. To counterbalance harvesting raw materials, Boiron promotes the resupplying of wild-harvested or organically farmed plants whenever possible. Boiron also works with botanist harvesters to ethically gather plants and follow World Health Organization recommendations. As word of its products’ efficacy has spread via social media and elsewhere, company officials said this has influenced retailers to carry other products from Boiron, especially external analgesics. “As the U.S. shopper shifted toward a healthier lifestyle, there was a demand for products that contained better-for-you active ingredients,” said Gary Wittenberg, vice president of national accounts. “Arnicare, made from a type of mountain daisy and free of any parabens or fragrances, met that need.”


Named one of the fastest-growing beverage companies in the United States by Inc. Magazine, Dyla Brands, best known as a maker of natural beverages, has been making a name for itself lately, particularly for its Forto 2-fl.-oz. coffee shots. Neel Premkumar, founder and CEO of the New York-based company, told DSN that he created Forto after the birth of his twins. He found himself drinking coffee and energy drinks to keep up, but quickly realized there wasn’t a fast energy boost from a wholesome, natural source on the market.

As what company officials said is the largest homeopathic manufacturer in the world, Boiron officials know a thing or two about homeopathic medicine. Founded in 1932, the company, based in Newtown Square, Pa., offers more than 200 SKUs across a number of different segments, including cough-cold, external analgesics and children’s medicines. It is best known for its Arnicare line of pain relievers and Oscillococcinum flu medicine. With the expertise of pharmacists, chemists and botanists, Boiron




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REX AWARDS 2019: NATURAL PRODUCTS Forto coffee shots are USDA-Certified Organic and made with Colombian arabica beans from family-owned farms. They are available in two energy levels: 100 mg and 200 mg of caffeine. Currently sold in 50,000 retail locations, Forto’s distribution is expanding rapidly with a national partnership with Keurig Dr Pepper. Beginning in 2019, Forto will be available in 11-fl.-oz. ready-todrink energy coffee drinks. The organic line will come in three latte SKUs: coffee, chocolate and vanilla. “As the top-selling RTD organic coffee brand in the U.S., we listened to consumers requests and created something they’re able to sip and savor,” Premkumar said. “Now with our coffee shots and energy coffee, we’re able to provide consumers an option for any occasion.”

FLORA Flora began in 1965 as a manufacturer and distributor of health foods and dietary supplements in Burnaby, British Columbia, Canada. In the late 1980s, the company expanded and established its U.S. headquarters in Lynden, Wash. Flora pioneered cold pressing of flax oil and is known for its Flor-Essence herbal cleansing tea and Udo’s Oil 3·6·9 Blend, as well as being the North American distributor for Salus liquid vitamin and mineral tonics. Most recently, Flora has taken apple cider vinegar and worked some formula magic by adding Flor·Essence herbs, along with some additional organic herbs and spices, to make three Apple Cider Vinegar Wellness Tonic blends: turmeric and cinnamon, lemon and ginger, and elderberry. The company also has expanded its probiotic line with four shelf-stable formulas and launched Omega Sport+, an energy and recovery oil blend that fuses medium-chain triglycerides with omega-3s, turmeric and vitamin D. “After all these years, Flora remains a family-owned business and prides itself on the scope of our operations, which include manufacturing and distributing, in-house quality control testing, graphic design, marketing, and an export presence in 50-plus countries around the world,” said Robert Dadd, the company’s product information supervisor.

GURUNANDA According to Puneet Nanda, the self-described chief essential oil of GuruNanda, most retailers and consumers are not aware of the difference in quality among the various essential oils on the market today. Nanda likens the essential oils business to the wine business, and said, “You can’t expect to grow grapes in downtown Los Angeles and get a wine quality similar to Napa or Bourdeaux.” He said many products marketed as essential oils actually are synthetic perfume-based oils. Nanda recognized an untapped opportunity to introduce authentic essential oils to consumers and consequently started the company, based in Buena Park, Calif., combining his last name with the Hindi and Punjabi word for someone with expertise. His line, which consists of 138 essential oils sourced from six continents, is featured in certain Walgreens, Rite Aid, Kroger, Costco, Sam’s and CVS Pharmacy stores, as well as Walmart. Following a “farm-to-you” approach, Nanda said he has personally visited every field and farm he sources from to ensure he



REX AWARDS 2019: NATURAL PRODUCTS partners with the best growers and distillers. He has formed a global alliance of honest distillers and farmers who believe in ethical payouts and replantation of crops to ensure sustainability. In an effort to distill only the purest and most powerful essential oils, each plant source is selected based on where it thrives most and its therapeutic properties. As a part of giving back, Nanda said he ensures part of the proceeds of these distillers goes to educate the children of farmers. The company recently introduced GuruNanda Tower XL, the first 2-in-1 open-top humidifier and aromatherapy diffuser. Its 2-liter capacity allows the unit to mist for up to 10-to-12 hours without needing to be refilled. “Winter is hard on the respiratory tract, and while heat keeps us warm, it also dries out the sinuses. This diffuser is an ideal way to add moisture to the air and get the benefits of your favorite essential oil at the same time,” Nanda said.

HEALTHY VENTURES Since entering the market five years ago, Berry Sleepy and Berry Awake brands have seen tremendous growth for one simple reason — the number of people looking for natural alternatives to fall asleep or stay awake has increased, according to company officials. The West Lake Village, Calif.-based company develops and markets innovative natural products. Berry Sleepy is made up of a proprietary sleep and relaxation blend that includes tart cherries, passion fruit, goji berries and valerian root extract. The berry-based formula also has the added benefit of prebiotics. The idea for the product came about in 2013 when a young family with five children never got normal sleep. They were tired of all the side effects from prescription drugs and sought out professionals who aided them in developing a natural sleep aid with no side effects. The introduction of the Berry Awake Energy Shot created a new natural segment in the energy shot category. Berry Awake Energy Shot is made of a proprietary blend that includes green coffee berries, bacopa leaf, ginseng extracts and pea plant protein. All Berry Sleepy and Berry Awake products, which are gluten-free, kosher, non-GMO and vegan, are manufactured in the United States. CEO James Lacey said offering these products in different formats was done to appeal to a wide group of consumers looking for natural alternatives that were convenient and offered value. Most recently, the company introduced a four-pack option for its 2-fl.-oz. Berry Sleepy Sleep Shots.

HYLAND’S In 1903, eight Los Angeles physicians founded Standard Homeopathic Pharmacy in the downtown area of the city. They placed a young pharmacist, George Hyland, in charge of ensuring their patients had the medicines they needed without having to wait for shipments from the Midwestern or eastern pharmacies. Fast forward 115 years and you get Hyland’s, named for the pharmacy’s top-selling brand, now the largest and oldest domestic manufacturer of homeopathic medicines in the United States “Hyland’s has worked over the course of its years to meet our



REX AWARDS 2019: NATURAL PRODUCTS and the vitamins, minerals and antioxidants it offers, all of which help to calm coughs and soothe irritated throats. The company then focused on the delivery format, choosing to offer its children’s line in both a syrup and a portable spray. Its adult SKU includes HoneyWorks Adult Soothing Throat Spray Plus Zinc. “We wanted to offer consumers a cough-remedy product they could trust to use for everyone in their family that was drug-free, long-lasting, free of artificial additives and was allergy-free — very important criteria for many parents today,” Machin said. Lifelab also is known for its NuSyllium products, made with 100% USDA certified organic psyllium fiber and a natural orange flavoring. According to Machin, NuSyllium has been clinically proven to lower cholesterol, help with weight management and promote overall digestive health.


consumer where and how they need us,” said Thao Le, Hyland’s vice president of marketing and innovation. “For instance, our unique quick-dissolving tablets make it safe and easy for young children to take our medicines, and just as easy for leg cramp sufferers who don’t have time to grab water for a pill.” Not one to rest on its laurels, Hyland’s has been busy introducing several products this year. Hyland’s Baby Oral Pain Relief Tablets now are available in day and night formulas. Building on the success of Hyland’s Leg Cramps, the company has introduced a children’s version — Hyland’s 4 Kids Leg Pain Relief. Next, Hyland’s debuted Restful Legs PM for those whose leg cramps keep them up at night. “Our gentle, safe medicine is made with natural, active ingredients and no aspirin, acetaminophen, ibuprofen or naproxen, and it has no known drug interactions,” Le said. This summer, the company launched a new premium brand called Doctor Wise Homeopathy, offering five homeopathic formulas for the relief of menopause symptoms.

Bob Harrington, co-founder of Maty’s Health Products, is admittedly a little shy when it comes to having attention on his company. Yet social media is changing all of that, and this formally underthe-radar company quickly is making a name for itself with its unique line of natural and organic cough-cold and digestive products for babies, children and adults. “The shift we are seeing today, driven in large part by millennials, is that consumers are hyper-focused on what they put in their body more than perhaps any generation before them,” Harrington said. “This has not gone unnoticed by retailers who are opening up shelf space to companies such as ours.” Retailers, Harrington said, also are willing to create a set within a set to feature such products as his. He also said that this is a sign that retailers are aware that more mainstream consumers are interested in buying natural and organic products for their families. Of the company’s product offerings, Maty’s All Natural Baby Chest Rub is among its most popular. Unlike other rubs, Maty’s is petroleum- and menthol-free, and features eucalyptus, chamomile and lavender. “Our organic cough syrups are extremely popular as well, and this product in particular has helped define and separate us from the pack. Mom’s love it because it is certified organic and drug-free, which means it is safe for children and adults to use,” Harrington said. While the addition of a baby to the family often is the reason many try natural options, Harrington said that adult consumers he described as “dabblers” increasingly are interested in trying Maty’s Healthy Products for themselves. Looking at 2019, Harrington said the company plans to launch several new products.



The number of people interested in buying organic products continues to rise, and the cough-cold segment, where safety and efficacy are consumer must-haves, is no exception. Coconut Creek, Fla.-based Lifelab Health’s HoneyWorks line of products was developed with those specific qualities in mind, according to managing director Louis Machin. Lifelab started with U.S.-sourced certified organic dark honey both for its flavor appeal

The Honey Pot is best known for offering healthy feminine washes, natural feminine wipes, herbal menstrual pads and panty liners. Launched in 2014, the company quickly has expanded in a number of retail channels. “We are the first plant-based feminine care company that makes products for both daily and monthly feminine care needs,” said Beatrice Feliu Espada, founder of the Atlanta, Ga.-based company.



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REX AWARDS 2019: NATURAL PRODUCTS “Never before has a feminine care company offered customers washes, wipes, pads, liners and tampons all under one brand.” The Honey Pot also was the first brand to bring herbal menstrual pads to the U.S. marketplace. “Herbal pads are a mainstay in many Asian and European countries, so we’re thrilled to finally introduce this new healthy pad experience to the American female consumer,” Feliu Espada said. The Honey Pot is expanding its product line with the addition of probiotics, natural tampons, deodorant sprays and a cramp salve.

THE RELIEF PRODUCTS The Relief Products, or TRP, is a 32-year-old family-run company specializing in homeopathic medicine. The Relief Products is dedicated to a singular mission of helping as many people as possible “Stay Healthy, Naturally.” This mission has been the foundation of its continued growth and innovation, according to company officials. Today, The Relief Products offers more than 25 homeopathic products, ranging across such categories as eye and ear care, coughcold, digestive health and pain management. Its products are made using 100% natural active ingredients that work safely and gently, offering no known side effects or interactions with other medications, according to company officials. “The Relief Products has been presented with five Women’s Choice Awards for 2019 and now the REX Award, all of which allows us to continue to spread our message of customer-dedicated innovation,” said Susan Hanson, chief operating officer at the Reno, Nev.-based company. “The continual growth of The Relief Products aligns with the expanding cohort of health-conscious consumers seeking new, innovative remedies.” One of TRP’s newest remedies, Eye Strain Relief, is designed to relieve eye fatigue, headache and blurry vision resulting from digital device overexposure. According to Hanson, consumers continue to seek natural remedies for ailments that tend to worsen at night, including such conditions as pink eye, tinnitus, earaches, blepharitis, allergies and similar conditions that deliver painful, sleepless nights. The company’s newly introduced PM Ointments, Hanson said, support nighttime healing and recuperative sleep. “The Relief Products will continue to respond to our consumers’ needs as we combine available technology, unique product offerings and compassionate pricing. Innovative, safe, affordable, award-winning products from our family to retailers’ shelves,” Hanson said.

YES TO Yes To was created in Australia more than 10 years ago by two individuals who wanted to shake up the beauty world by creating a natural beauty line made with fruits and vegetables. Fast forward to today, the Pasadena, Calif.-based company is the second-ranked natural skin care brand in the United States. Its beauty solutions feature 95% or more natural ingredients. The brand is distributed in more than 35,000 mass, prestige and natural retail stores across four continents.



“Not only are our award-winning formulations free of parabens and other toxic ingredients, we created a modern, exciting, bright, colorful, fun brand that stands out among the sea of sameness in the natural beauty world,” said CEO Ingrid Jackel. “All of this makes Yes To an engaging and authentic natural beauty brand, No. 1 in attracting millennials and Gen Z with first to market beauty products that are good for your skin, cruelty-free, smell good, don’t damage the environment and don’t break the bank.” Ranked at the top among the leading brands in driving natural skin care dollar growth in the last year due to its strong innovation performance, Yes To is the top ranked facial mask brand in the United States, including the mainstream skin care market. “Facial masks are the second largest natural skin care segment and the fastest growing,” Jackel said. Yes To also is the top natural acne skin care brand in the United States, something officials attributed to its innovative product forms and effective, yet gentle natural ingredients. dsn

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COVER STORY Kroger is working on a pilot with robotics company Nuro, testing autonomous vehicles servicing a single Fry’s Foods store in Scottsdale, Ariz.

Under Pressure

Retail forecast calls for ongoing price competition, e-commerce expansion BY MARK HAMSTRA


he relentless growth of hard-discount retailers and the increasing adoption of online shopping will keep pressure on traditional retailers in the year ahead, according to analysts. Although the strong economy promises to drive consumer spending, the ongoing expansion of such low-price specialists as Aldi and dollar stores will force food and drug retailers to remain aggressive on price, said Katherine Black, U.S. consumer and retail strategy co-lead at KPMG. At the same time, retailers are being pressured to invest in click-and-collect and delivery solutions to retain customers who are lured by online offerings, she said. “When you’ve got thin margins already, and you then have to spend on extra infrastructure, and you have to stay in the game on



price, if not lead on it, we expect it to create a real financial issue and a lot of margin pressure for retailers,” Black said. She expects online retailing to continue to expand in food and drug categories in 2019, including perishables. KPMG’s recent 2018 Grocery Retail Consumer Perception Survey found that 48% of U.S. consumers now do some or all of their grocery shopping online, and 59% are planning to do so in the future. Rising labor costs also are expected to remain a significant source of pressure on retailers’ margins, Black said, as higher minimum wages go into effect throughout the country, and strong employment fosters a competitive environment for workers. “We see a lot of retailers experimenting with ways to take labor costs out of the store, whether that be cashier-less checkout or

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COVER STORY using robots for stocking,” Black said. “I think we will see more and more of that in the market — it’s a pressure point, and a lot of retailers are trying to innovate there.”

ECONOMY CUTS BOTH WAYS While the strong momentum behind the U.S. economy, at this point, means consumers will have more disposable income, it also could drive more spending at restaurants, said Chuck Cerankosky, an analyst with Cleveland-based Northcoast Research. “We haven’t seen this kind of economy in a long time, and customers are reacting to it in various ways,” he said. “More people are working, and the dual-income household is back everywhere, so that means fewer hours available to cook at home and more sales at restaurants. The industry has to react to that. Retailers also have to make shopping more convenient, whether it’s by click-andcollect or delivery methods, and they need to be in-stock, because people just don’t have time to shop,” Cerankosky said. Burt Flickinger, managing director at Strategic Resource Group, predicted GDP growth of about 2.3% to 2.5% in 2019, with price inflation of about 1.5% to 2% and labor cost inflation of about 3%. CPG companies are experiencing increased costs in several areas, including new tariffs and higher distribution costs, which are being passed on to retailers for the most part, according to KPMG’s Black. She said that whether retailers can continue to pass along these increases to consumers would depend in part on whether the economy remains strong in 2019. “I think retailers are happy to bring prices up a little bit to help offset some of these added costs, but I’m not sure that’s true across the board, and I’m not sure how sustainable that will be,” she said. “In a trafficdriving category, they have to stay firm on price on those traffic-driving items.”

MORE CLICK-AND-COLLECT The high-labor costs involved in home delivery will continue to drive retailers toward the lower-cost click-and-collect model in the year ahead, Cerankosky said. He also said he expects retailers to continue to experiment to find the right balance



Year of Transition for Drug Chains The year ahead will be one of transition for the nation’s largest drug chains, as CVS Health digests its acquisition of Aetna, Walgreens continues to assimilate its 2018 purchase of 1,900-plus Rite Aid locations, and the remaining Rite Aid operation moves forward following its terminated merger attempt with Albertsons. Burt Flickinger, managing director of New York-based Strategic Resource Group, said that the merger was a “missed opportunity” that could have bolstered Rite Aid’s ability to further invest in such offerings as its loyalty program. As the chain looks to the future, Rite Aid CEO John Standley said in a recent conference call with analysts that the company would focus on three strategic priorities in the year ahead: Serving as the trusted advisor to its pharmacy customers; providing customers with a convenient and personalized shopping experience; and building a winning value proposition for payers and providers. To achieve these goals, Rite Aid is implementing several initiatives, including seeking to stabilize reimbursement rate pressures, expanding access to limited and preferred networks, enhancing its pharmacy clinical capabilities to improve outcomes, and leveraging its wellness brand. Rite Aid also is refining its merchandising, expanding its omnichannel capabilities and expanding its PBM EnvisionRxOptions Medicare Part D business. “We’ve also continued to build new stores and convert additional locations to our innovative wellness store format, which we believe is the best format in the chain drug industry,” Standley said.

CVS Health Cites Aetna Opportunities Larry Merlo, president and CEO of CVS Health, said in a call with analysts that he sees significant opportunities in the year ahead from the acquisition of insurance provider Aetna. “Both CVS and Aetna are passionate about revolutionizing the consumer healthcare experience,” he said. “And while we have been clear that the cost savings are substantial, this transaction is about the significant value creation that will be realized as a result of growth.” CVS Health said it expects to begin testing a new store format, offering a suite of health services as a result of the Aetna acquisition early in 2019. During that same call, Eva C. Boratto, who has been named as the CFO of the combined company, said she sees growth in retail pharmacy prescription sales as an ongoing driver of growth in 2019, along with momentum in specialty pharmacy. Barriers to more rapid growth in 2019 include ongoing pressures on reimbursement and uncertainty in the regulatory environment. “Some of those [regulatory changes] that Health and Human Services is talking about could be positive or negative,” Boratto said.

Walgreens Sees Rx Increases Walgreens also said retail prescription sales have been on the rise, and are expected to grow in the coming year, with the recent acquisitions of the prescription files from Fred’s and of the prescription-drug division of DaVita Rx. Stefano Pessina, vice chairman and CEO of Walgreens, said he sees the business moving forward in 2019 around three key areas: • Developing omnichannel capabilities in pharmacy and retail, which Pessina described as “easily one of the biggest transformations our business has ever seen;” • Developing a modern, differentiated retail position that leverages the chain’s convenient locations; and • Transforming pharmacies into healthcare destinations. — Mark Hamstra




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COVER STORY between click-and-collect and delivery for each market, while at the same time driving traffic into physical store locations. He cited Costco as an example of a company that is succeeding in driving both e-commerce and brick-and-mortar sales growth. “It shows you that there is a way to create an experience for the shopper that they enjoy in-store, while at the same time presenting an e-commerce service to them as well,” Cerankosky said. Retailers both are rolling out click-and-collect services to additional locations and making more products available through this service. Bentonville, Ark.-based Walmart, for example, recently said at its 2018 Analyst Day that it plans to add pharmacy and apparel to the items available for online ordering and store pickup in the future, according to a report from BMO Capital Markets. For home delivery, some retailers will continue to test in-house solutions, while others will continue to partner with such services as Instacart and Shipt, the delivery service owned by Minneapolisbased Target. In addition, online will play a larger role in influencing purchases, through the influence of social media or digital recipes, for example, said Sy Fahimi, senor vice president of product strategy at Symphony RetailAI. “Grocers will also become much more adept at providing consistent and engaging updates for online customers, a la Grubhub or Domino’s, giving them valuable real-time insight into their order status and reducing the friction between in-store control and online convenience,” he said.

AUTOMATION AND TECHNOLOGY Retailers will continue to experiment with a range of technologies to enhance efficiencies and drive sales in 2019. Walmart, for example, recently rolled out a test of shelf-scanning

Minute Clinic Virtual Visits leverage remote care provider Teladoc’s platform to enable telehealth visits through the CVS Pharmacy app.

robots to more than 50 stores, and also has launched a test of robotic home delivery in partnership with auto maker Ford in Florida’s Miami-Dade County. “We want to make sure we stay on the cutting edge of grocery delivery by exploring what’s new and next,” said Tom Ward, senior vice president of digital operations at Walmart U.S., in a recent blog post. Similarly, Cincinnati-based Kroger recently began testing delivery using autonomous vehicles through a partnership with robotics company Nuro. The test launched at a single Fry’s Food Store in Scottsdale, Ariz., offering same-day or next-day curbside delivery of groceries ordered online.

Acosta Forecasts Winning Categories for 2019 Although retail freezer-case sales have been declining in recent years, the trend now has reversed and is expected to continue this year, per a 2019 forecast by Acosta, a Jacksonville, Fla.-based sales and marketing firm. Frozen foods currently are the fastestgrowing center store category, according to Colin Stewart, senior vice president of Acosta Insights. “While shoppers have been migrating to the perimeter for fresh and prepared food options, shoppers are once again recognizing the convenience of frozen foods,” he said. Frozen prepared foods have been leading the growth with nearly half of the total frozen



food department growth. “Manufacturers have stepped up their innovation with cleaner labels, higher quality and improved taste,” Stewart said. “Frozen breakfast also continues to outpace many categories in growth. Frozen dinners and frozen breakfast categories can be key gateway categories to drive more traffic into the frozen food department.” Other frozen-food categories seeing growth include frozen pizza, frozen desserts, frozen seafood and frozen vegetables. “Retailers can benefit from growth in frozen foods by focusing on key destination categories as gateways to driving traffic and making

sure they are stocking the latest innovative products,” Stewart said. “Where retailers can leverage loyalty data, they can target shoppers that are buying one or two categories in frozen and take a ‘one more category’ approach to expand category penetration.” Retailers also can seek cross-promotional opportunities between frozen foods and other categories — for example, aligning deli or prepared food items with complementary frozen products, Stewart said.

CBD Oils Another category expected to continue to expand in 2019 is products containing

In the pharmacy area, technological advances include the ongoing expansion of such telemedicine solutions as Teladoc, which CVS Health began rolling out in 2018 at its MinuteClinics. The video conferencing system allows patients to consult with medical practitioners, via the CVS mobile app, about a range of minor illnesses, injuries and conditions. Larry Merlo, president and CEO of CVS Health, said the offerings will roll out state by state. As a complementary strategy to the clinics, Teladoc offers an opportunity for the chain “to expand our reach, as well as expand our scope of practice,” said Merlo, citing after-hours care as an example. Similarly, Boise, Idaho-based Albertsons in late 2018 opened two artificial intelligence- and augmented-reality powered teleclinics through a partnership with Akos Med Clinic at two Safeway locations in Arizona, with plans to bring it to 50 stores this year.

MERGERS AND ACQUISITIONS Such acquisitions as Kroger’s investment in Ocado — which is bringing the company a fully automated fulfillment center — and CVS Health’s purchase of Aetna illustrate the diversity of acquisition opportunities in the marketplace, analysts said. However, margin pressures could impact retailers’ ability to execute mergers and acquisitions in 2019, according to KPMG’s Black. In the current competitive environment, retailers need to carefully weigh the potential synergies of potential acquisitions, she said. “I think we are seeing a lot more in terms of partnerships in the retail space — lower-risk investments in firms without full ownership — rather than pure M&A,” Black said. “The risky thing for retailers is that they acquire a company that is fundamentally different, and that’s a tricky kind of acquisition because to get the full value out of it, you need to figure out how to integrate it to a

cannabidiol — the nonintoxicating ingredient found in hemp — said John Clevenger, senior vice president strategic advisors at Acosta, who cited estimates that the category could grow to become a $1 billion category by 2022. “Key challenges in the face of achieving this potential are almost all related to perceptions and knowledge of the product,” he said. “As with many other fast-growing ‘natural’ product categories, there is a wide range of product quality, ranging from ‘pure’ to snake oil.” Retailers need to first educate themselves on the differences, then offer a range of products at varying price points, he said, adding that all CBD products should be shelved together to make it easier for shoppers to view all their options and create a destination where

degree into the core business without destroying what was special about the target to begin with.” Symphony RetailAI’s Fahimi said channel blurring will continue in 2019 as retailers evolve their in-store experiences. “Independent channels, formats and brands will all blur to become more experience-based,” he said. “For example, we will see more grocery stores that also have restaurants and banks inside, which is how retailers will be able to compete with Amazon. It’s up to retailers to provide a friendly and engaging shopping environment.” Experimentation with channel partnerships and format changes is well underway, with Kroger and Walgreens working together on a new format that includes Kroger products inside Walgreens stores, for example, and Walgreens partnering with subscription beauty brand Birchbox to augment its own beauty aisles. “We’re expanding our initiatives and partnerships, and there are a lot more to come,” said Stefano Pessina, vice chairman and CEO at Walgreens Boots Alliance. Retailers also will continue to shutter underperforming stores in 2019, according to Northcoast Research’s Cerankosky. “I would expect to see ongoing, steady consolidation in the industry, with marginal stores disappearing,” he said. “They are very hard to sell, and what Supervalu — now UNFI — is going through with its retail stores is a good example.”

HEALTH AND WELLNESS Positioning that emphasizes health and wellness will remain a winning strategy for food and drug retailers in 2019 and beyond, analysts said. Retailers will continue to emphasize in-store health solutions by adding clinics, dietitians and other health-oriented services. “Expect clinics and dietitians, and other special services, to impact sales in those stores at a double-digit pace in same-store

appropriate signage can help explain why one product is more expensive, or [is] a better personal choice, than another. As with any other health item, proper category and product information should also be available on the chain’s website.

Premiumization Premiumization is another key ongoing trend that retailers can capitalize on in 2019. “As the recession fades and household income rises, shoppers are once again open to the idea of spending more, trading up and treating themselves,” Clevenger said. “Yet as they consider opening their wallets a bit more, the price-value calculations they made in the lean years are still active — they’ve

just recalibrated to place greater importance on characteristics other than price: quality of ingredients, exclusivity, ethical company practices, local, traceability, etc.” Those attributes need to be readily apparent to shoppers, “so education at the point of sale is important,” he said. In many categories, it may be beneficial to group products so shoppers can easily see that they have several premium options to which they can trade up. “All of this is meaningless if the shopper doesn’t know that the retailer is carrying these products, so some level of awareness-building — secondary locations, ‘new item’ endcaps, banners on the website, neck hangers, etc. — is critical,” he said. — Mark Hamstra




Albertsons features AI- and AR-powered teleclinics at two Arizona Safeway locations via a partnership with Akos Med Clinic.

comparison sales,” said Flickinger of Strategic Resource Group’. John Clevenger, senior vice president of Acosta’s Strategic Advisors consulting arm, said opportunities remain for retailers to expand their offerings of health services. “Both food and drug channels have invested heavily in in-store pharmacies, and grocers in particular have expanded their ‘better for you’ food items, so the appropriate product offerings have been established,” he said. “What remains are services: diagnostics, seminars, in-store help centers, etc., that can be established in partnership with local health providers or nonprofit groups.” Flickinger cited Rochester, N.Y.-based Wegmans Food Markets as an example of a retailer that is benefitting from the addition of an expanded assortment of organic food products. “Those categories can grow at at least 7%, and typically 10% to 12% at year two,” he said. Cerankosky cited Sprouts Farmers Market, based in Phoenix, as an example of a retailer that has been growing at a rapid pace in part by virtue of the “health halo” it has created through better-foryou product assortments. Amazon Fresh and Whole Foods Market will continue to pressure food retailers in 2019, analysts said, although it’s not clear that Amazon’s 2018 acquisition of Whole Foods has had much



incremental impact on traditional food and drug retailers. “I think Whole Foods remains the same competitor it has been,” Cerankosky said. He said that Whole Foods’ core strengths in high-quality perishables and prepared foods remain strong drivers of store traffic and are resistant to e-commerce. The chain’s expertise in prepared foods also helps it maintain an advantage in driving store trips.

MEETING LOCAL CONSUMER DEMANDS KPMG’s Black said successful retailers in the year ahead will take steps to ensure that they are pursuing the right strategies for their individual markets. “Every customer base is very unique, [there are] vast differences in how consumers are adopting online shopping and adopting different types of products and retail formats,” she said. “The strategy has to be tailored to the specific customer base for it to be effective, which is kind of common sense, but it is often ignored common sense.” And while advanced technologies using data analytics have the potential to assist retailers in tailoring their offerings to meet the demands of their unique consumers, Black cautioned that such solutions represent “yet another cost and another change, among all these other costs and changes.” dsn


9 1 0 2 R O F

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Lick, Stick and Pour No More Companies look to ease the burden on pharmacists’ time to help them improve patient health By Sandra Levy


o doubt about it. There has been a cosmic shift in pharmacists’ role in health care, from a dispensary position behind the counter to one that involves engaging and interacting face-to-face with patients. From medication therapy management and therapy-based point-of-care testing, to immunizations and health screenings — and even including prescribing — it is clear that pharmacists have more opportunities than ever before to use their clinical expertise. Pharmacists must address the question of how they can build and nurture patient relationships in the current healthcare landscape that require them to fill an increased volume of prescriptions in a shorter period of time. That is where pharmacy technology and automation come in. Pharmacy software systems are able to help pharmacists streamline the process of identifying opportunities for engagement with patients, while automation and time-saving technology are meant to free them from licking, sticking and pouring so they have the time to spend with patients.

Identifying Opportunities

Mountain View, Calif.-based Omnicell, for example, is helping pharmacists better identify and resolve medication-related problems with its Patient Engagement Platform. “Technology equips pharmacists to identify and resolve gaps in therapy and other medication-related problems,” said Omnicell director of clinical healthcare strategy Rebecca Chater. “Enhancing their ability to manage medication use of populations is essential, and it’s important to make it as efficient as possible.” With the Omnicell Patient Engagement platform, Chater said pharmacists can identify needs that exist within that patient



Pharmacy software systems are able to help pharmacists streamline the process of identifying opportunities to engage with patients.

population they serve to demonstrate their value in driving better health, better care and lower costs. In particular, she said that the platform can help identify patients who might require pharmacist engagement. “Effective medication management is the centerpiece of value-based care,” she said. “Value-based care is not about simply identifying and resolving problems as you find them in the course of reacting to patient requests to fill prescriptions. It requires pharmacists to manage medication use related to chronic health conditions at the population level. Technology-assisted

medication management is the future of pharmacy practice.” New York-based Amplicare offers a workflow platform aimed at improving both patient outcomes and opportunities for intervention. Amplicare Connect helps pharmacies set up automated phone call campaigns, and Amplicare Restore helps identify patients whose prescription regimens might result in a nutrient deficiency. “Patient care intervention notifications show up in-workflow as pharmacy staff is working within the pharmacy system,” said Matt Johnson, the company’s CEO.



Third Party Management System

PHARMACY | TECHNOLOGY AND AUTOMATION “This process ensures that pharmacies have the information they need, exactly when they need it.”

Freeing Up Pharmacists

A key component of medication management is actually dispensing the medication — a process that can take valuable time from pharmacists without a technological assist. From in-store automation that can help count pills to behind-the-counter robots that can create blister cards aimed at improving adherence, pharmacies increasingly are looking for new ways to free up time for pharmacists to spend on counseling patients. Among the companies on the forefront of automation is Mission, Kan.based ScriptPro, which offers six robots to help pharmacies increase their efficiency. ScriptPro’s director of industry data resources, Chris Fitzmaurice, sees automation as a key partner in the expansion of pharmacists’ role in patient’s lives that he said is on the horizon. “We stand on the precipice of a new golden age of pharmacy. As health care grows in complexity and more services are guided to outpatient and retail pharmacies, technologies need to evolve along with the pharmacist’s expanding role,” he said. “Advanced tools like those developed at ScriptPro balance clinical decisionmaking with flexibility, supporting pharmacists with a foundation of evidence, while allowing them to tailor care to the individual needs of their patients.” Canada-based Synergy Medical also is taking the lead in automation, designing and manufacturing robotic technology to fill single-dose and multidose blister packs. “Blister pack automation reduces the labor required to fill packs and dispense, and frees up time so that there can be more emphasis on consultations and revenuegenerating services,” said Synergy Medical marketing director Samantha Cockburn. Pointing out that as Synergy Medical celebrates its 10th year and has installed 115 robots in the United States, Cockburn said that automation isn’t just a time-saving tool — it also can assist in adherence. “Blister packaging is a key component to



An Exam Room of One’s Own As pharmacists continue to make strides in patient care, engagements with patients require a private space. Corona, Calif.-based Uniweb is focused on space solutions for pharmacists. A growing part of its business has been creating private consultation areas that many pharmacists are using when providing immunizations. Uniweb vice president of marketing and sales Ron Mackert said the company offers pharmacies customizable, modular rooms that quickly can be set up, taken down or relocated. Options also include rooms that are built into a wall, can pop out of a wall or be folded up when the room isn’t needed. “As opposed to collapsible fabric curtains that can look shabby and dirty, ours are aesthetically pleasing and secure areas that both the pharmacist and the customer feel comfortable and safe in,” Mackert said. Pointing out that the size of Uniweb’s private consultation rooms are generally 10 feet by 10 feet, Mackert said he foresees growth in pharmacies seeking to have these rooms. “All pharmacy companies are trying to be more health and preventative oriented, and not just prescription-filling companies,” he said. “If there isn’t an environment for the customer to feel safe having a private conversation with the pharmacist ,they are not going to have that conversation. If patients see that a private consultation room is available, they’ll say, ‘Can we go in the room?’ It allows the pharmacist more involvement in communicable health.” — Sandra Levy

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PHARMACY | TECHNOLOGY AND AUTOMATION an adherence strategy,” she said. “As you get to a certain number of patients, however, the manual process of filling these packs starts to get onerous, it requires more labor, and it’s prone to error when you are doing a lot quickly. That’s where the precision and efficiency of automation comes in. Noting that about 30% of oral medications are packaged in blister packs in Canada, compared with 2% in the United States, Cockburn said, “More studies show that organizing a patient’s medication by day and time of administration in multidose blister packaging is beneficial for patient adherence and outcomes. It synchronizes their prescriptions so they will refill more regularly. This is better for the patient and also provides more consistent revenue for the pharmacy.” Cockburn touted the company’s SynMed XF robot, which is tailored to independent pharmacies. “A pharmacy that is operating at a nice steady flow is going to put

out between 30 and 50 multidose cards per hour with one FTE, or about 1,000 cards per week, assuming an average of eight prescriptions per patient,” she said. SynMed ULTRA, launched last year, is a high-capacity robot designed for high-

volume facilities, where there is a need for a high volume of single-dose cards. “The robot has two picking units. It’s not much bigger than the original robot, but it is three times faster and can produce close to 200 single-dose cards per hour,” Cockburn said. Beyond its software offerings, Omnicell also is looking to help relieve pharmacists from the burden of repetitive behind-thecounter tasks. The company offers several scalable adherence-packaging solutions for the pharmacy, which includes the VBM 200F Multimed Automation. Omnicell executive vice president and chief commercialization officer Scott Seidelmann said that the VBM 200F fills and checks the company’s SureMed blister cards, “creating a seamless active workflow and freeing up the pharmacist for patient-focused activities.” The company also recently introduced its digitized Autonomous Pharmacy, which Seidelmann said combines automation,

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Here at Upsher-Smith Laboratories, LLC, our heritage is generic pharmaceuticals. We and our parent company, Sawai Pharmaceutical Co., Ltd, have been formulating and manufacturing quality generics for decades.

In keeping with our unwavering commitment to high-quality products and sustainable growth, we’ve recently rolled out a strategic plan to double our on-market offerings. This means our customers can expect a greater number of consistently supplied, quality products supported by our highest level of customer service. As we celebrate our 100-year anniversary, we remain proud of our strong reputation as a trusted partner in the generic marketplace, and we look forward to delivering even more affordable options to patients and healthcare professionals. Visit us at www.upsher-smith.com to learn more.

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PHARMACY | TECHNOLOGY AND AUTOMATION predictive intelligence and expert services that serve as an extension of the pharmacy to support improved efficiency and regulatory compliance, as well as outcomes. Noting that 20%-to-30% of prescriptions are never filled, and 30% of patients don’t take medications after pickup, Seidelmann said Omnicell envisions a care delivery model where the pharmacist is no longer sorting, picking, checking, reconciling and transporting medications. “Formulary updates are made with the click of the button, and predictive intelligence offers inventory visibility to better plan for drug shortages and manage costs,” he said. “The bottom line is we are enabling the pharmacist to practice at the top of their license to transform the pharmacy care delivery model.” Not all of the ways that pharmacists’ time is saved are automated, though — something that reverse distribution services firm Pharma Logistics realized. The company developed a solution for the human resources that are behind the pharmacy counter — pharmacy technicians. “Pharma Logistics has created a 16-page Pharmacy Technician Handbook to educate pharmacy technicians on inventory management and the pharmaceutical return process, roles that many technicians are now responsible for as pharmacies seek to free pharmacists so they can provide counseling and other patient services,” said Daniela Weiszhar, the company’s head of marketing and communications.

Reaching Customers/Convenience

Beyond helping patients manage their treatment and finding the solutions that exist to find time to do so, pharmacists also are



tasked with making the pharmacy experience easier for patients. One crucial element to improving the experience is helping patients understand their medication. Palmetto, Fla.-based En-Vision America manufactures labels that help patients better understand their treatment regimen. The latest addition to the company’s ScriptAbility offerings — which include ScripTalk, technology that reads a prescription label aloud for patients; label translations in 17 languages; ScriptView largeprint labels; and BRL braille labels — is the Controlled Substance Safety Labels, or CSSLs. The labels distinguish Schedule II medications and help to reinforce the need for caution when taking the medication. “Our new CSSLs help pharmacists effectively counsel their patients when taking Schedule II drugs. The booklet-style label reinforces the need for caution by providing both instructions and warnings in an easy-to-read 16-point font,” said En-Vision America vice president and chief technical officer David Raistrick. “In addition, by scanning a QR code on the label, patients instantly see a safety video showing the drug’s patient education details.” In addition to helping diversify how patients can learn about their medication, companies are looking to help pharmacies

with such patient-facing tasks as will call and drive-through. Johnson City, N.Y.-based Innovation’s PharmASSIST Light-Way — in addition to offering potential as an inventorymanagement system — can be used as a will-call system. The product uses bottomlit shelves that guide pharmacy staff to the bag they need after scanning a barcode. For pharmacies with drive-through windows — through which roughly 60%-to-70% of their prescription volume flows — there also are needs for an improved experience that Cincinnati-based Bavis Drive-Thru is looking to help meet. The company’s Bavis Enhanced Audio Module, or BEAM, filters up to 90% of environmental noise, eliminating miscommunication and potential conflict when patients come to the drive-through hoping to consult with their pharmacist and discuss medications. “Many patients are looking to their pharmacist for more advanced information about the medications their doctors have prescribed, and they are also looking for over-the-counter solutions,” said Bavis president Bill Sieber. “Our goal is to create systems that allow pharmacists to consult easily with patients and to provide advice. We believe counseling at the drive-through is more confidential and secure than counseling in the store, and it is very convenient, especially for elderly patients and mothers with their children in tow.” Manufacturers agreed that all of their solutions ultimately are aimed at empowering pharmacists’ clinical skills as a way to bring about better patient outcomes. “They are specifically trained to tailor the right medication therapy to a patient this includes detection and resolution of medication therapy problems, as well as reduced medical costs that result from optimized medication use,” Omnicell’s Chater said. ScriptPro’s Fitzmaurice said, “Individualized care requires a higher level of specificity and commitment. To successfully set out into this new era, pharmacists should embrace both their roles in the new clinical landscape, as well as support platforms designed specifically with them in mind.” dsn

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AbbVie, Pfizer Ink Licensing Agreements on Humira Biosimilar

TCGRx Acquires Parata Systems

Pfizer has signed licensing agreements with AbbVie, resolving all

In a move aimed at cornering a solid share of the pharmacy technology market, TCGRx, a Powers Lake, Wis.-based

global intellectual property matters for Pfizer’s proposed Humira, or adalimumab, biosimilar. Under the terms of the agreements, AbbVie has granted Pfizer a nonexclusive patent license for the use and sale of Pfizer’s proposed adalimumab biosimilar for many countries around the world. Pfizer may launch its biosimilar upon approval by the European Medicines Agency in Europe. In the

United States, the license period will begin on Nov. 20, 2023. “This settlement will facilitate patient access to Pfizer’s proposed adalimumab biosimilar, which we expect to be an important addition to our broad portfolio of biosimilar medicines,” said Pfizer global president of inflammation and immunology Richard Blackburn. All litigation pending between the parties will be withdrawn. The financial details of the agreements are confidential.

Mallinckrodt to Spin Specialty Generics Business off to Shareholders Specialty pharmaceutical company Mallinckrodt will be creating a new company focused on specialty generics and active pharmaceutical ingredients by spinning that business and its Amitiza, or lubiprostone, off to its shareholders. The move would create two independent, publicly traded companies — one offering branded specialty products, the other offering niche specialty generics and API manufacturing. “Today’s announcement is another important step forward in our journey to become an innovation-driven, pureplay, specialty pharmaceutical brands growth company,” said Mallinckrodt president and CEO Mark Trudeau. Mallinckrodt’s specialty generics business saw net sales of more than $850 million for the year ended Sept. 28, which includes sales of Amitiza since Feb. 14. The new company would have roughly 1,600 employees and a leading acetaminophen business, with a portfolio that includes API and generic finished dose forms of controlled substances and other products, a specialty generics development pipeline, and a solid U.S. manufacturing footprint. Mallinckrodt also said it expects the move to be complete in the second half of 2019 or sooner. The spun-off company is expected to be listed on the New York Stock Exchange and assume the Mallinckrodt name and ticker symbol, MNK. Matthew Harbaugh, who currently serves as Mallinckrodt’s executive vice president, CFO and president of the specialty generics business, is expected to become president and CEO of the new company. The specialty brands company will be led by Trudeau under a new name, which will be chosen at a later date.



Frazier Healthcare Partners company, has acquired Parata Systems.

Both companies offer medication adherence packaging, as well as high-speed automated robotic dispensing technology for pharmacies. “TCGRx’s merger with Parata provides a major growth opportunity for both our businesses through extended solution and service offerings for our customers,” said Duane Chudy, founder of TCGRx. Together, the companies said they have more than 4,500 packagers, inspection systems and vial-filling robots across retail, long-term care, hospital, government and mail-order pharmacies in North America. “The combination of our collective resources will allow us to accelerate the pace of innovation and better meet the rapidly evolving needs of our pharmacy customers,” said Mark Longley, Parata executive vice president of sales. The combined company will operate under the Parata Systems brand and be headquartered in Durham, N.C., with additional facilities in Wisconsin. TCGRx CEO Rob Kill will head the organization, with Chudy serving as vice chairman and a leadership team comprised of executives from both companies. D.J. Dougherty, formerly Parata CEO, has decided to pursue other interests.

Better Together. Two industry favorites team up to offer the best of pouch packaging and vial filling. Together, we’re Parata Systems, the new industry leader focused on bringing you pharmacy technology solutions to support business growth and better health outcomes. Imagine how good it’s going to be. Discover how we’re better together at parata.com & tcgrx.com.


VMS’ Healthy Growth Consumer demand paves path for the wellness category By Jenna Lomeli


hat role will the vitamin, mineral and supplements category play with consumers going forward, especially as wellness becomes a larger concern for many of these shoppers? The answer, many VMS manufacturers hope, is that people will continue to look to the category as a source of nutrition and solution to the problems they face as they seek a healthier lifestyle. There is no doubt that VMS is at the center of consumer demands for products that will make them feel better and live longer. The $7.45 billion segment has long played a role with many shoppers who feel that what they put into their bodies is paramount to how they feel on a day to day basis. According to IRI, the total vitamins market grew sales 4.8% year over year for the 52 weeks ended Nov. 4. Mineral supplements saw a 3.9% dollar growth, multivitamins increased sales 5.1%, one- and two-letter vitamins grew 3% in sales and liquid vitamins saw 15.5% growth. Overall unit sales for the category increased 2.7% year over year. The numbers suggest a healthily growing category that vendors are looking to get a piece of. Adding more fuel to the fire is the battle for shelf space at retail. While the major vitamin suppliers like Pfizer, with its popular Centrum brand, and Bayer, with its One-A-Day brand, continue to command much respect from retailers and consumers alike, other brands are making a dent in market share. Companies such as Nature’s Bounty, Piping Rock and Mason Vitamins, to name a few key ones, have gained recognition with shoppers looking for something different, and retailers are responding by giving them space on the shelves. The supplement category is essentially a free-for-all between suppliers seeking to



gain a niche with both retailers and consumers, many industry observers said. The hook, they said, is that consumers want supplements that solve a need, specifically building muscle mass, stronger bones or brain-focused activities, and there are a host of suppliers pushing their wares, with little governmental regulations, in this segment. Because of consumer demand for a whole host of products to solve more and more problems, VMS suppliers are aware that new challenges are continuously arising — among them, ensuring consumers have the information they need to make the right choices for their needs, and subsequently ensuring they can access the right products in the channels that suit them best. While natural solutions, in particular, have gained traction among consumers old and young, industry officials have had to adapt their

positioning, products and marketing strategies to ensure they are able to meet consumer needs on a variety of platforms. “I would say that the VMS category is probably one of the most fluid in our stores,” said an HBC executive with a west Coast-Based chain. “Between an influx of new products that meet a special need and new companies popping up with strong marketing support, we have to constantly be on the lookout for new trends. It is very difficult, but we know the value of this category to many of our consumers.” The industry — retailers and suppliers — has long realized that vitamins, minerals and supplements no longer are solely the purview of health fanatics or people who are looking to solve a deficiency in their diets. Growth throughout the VMS category has occurred, particularly among younger consumers. “A lot of segments of the population, especially millennials, are taking a lot more supplements on a regular basis, about 60% of the population” said Patricia Jones, general manager of Miami Lakes, Fla.-based Mason Vitamins. However, as a 2018 survey from Shelton, Conn.-based TABS Analytics highlighted, the products with the strongest performances are not necessarily the same as the top sellers from even a few years ago. TABS found that where fish oil and calcium used to have primacy in the category, they have seen declines in recent years, while products like hair, skin and nail supplements and melatonin are gaining favor. These changes come as vitamins play a larger role in broader wellness goals of consumers, according to Chris O’Connor, vice president of marketing at Ronkonkoma, N.Y.-based Nature’s Bounty. “One of the key changes I think that we’re seeing is, it’s not necessarily a health routine or just a physical-based routine anymore. It really

HEALTH | VITAMINS, MINERALS AND SUPPLEMENTS is a wellness routine that goes beyond the physical, into emotional, social, spiritual aspects of their health as well,” O’Connor said. “The way consumers are looking at health in general is much more broad than I think ever before.” From O’Connor’s perspective, Nature’s Bounty is on this journey with the consumer, not just to solve their immediate ailments, but to achieve that larger wellness goal. Paul Zoltie, shopper marketing manager at San Francisco-based Olly, shared this view of being a partner in consumers’ wellness journeys. “We focus on bringing delight to the nutrition space — living a healthy life is important, but that doesn’t mean we all can’t have fun doing it,” Zoltie said. “Olly isn’t about what you’re missing — it’s about how far you can go and how we can help you be your best self.” As a consequence of this more holistic view of what wellness encompasses, suppliers are focusing on offering products that cater to the challenges of modern lifestyles. Nature’s Bounty also is attacking this issue. “I think we can all relate to some of the challenges we have in today’s modern world and how, whether it’s electronics or just the busy pace of life, it can impact our sleep,” O’Connor said when discussing the rise of sleep aids and tailoring products to meet the demands of modern consumers. Just as a good night’s sleep has become a part of the path to wellness, so has maintaining healthy skin, hair and nails. “Awareness and usage of beauty-from-within supplements continue to build,” Zoltie said. “Consumers are recognizing the importance of tackling beauty concerns in a more comprehensive way by pairing their topical regimen with targeted supplements,” he said, pointing to this as a reason why hair, skin and nail-focused supplements are now being found in the beauty aisle. O’Connor also remarked on this shift in in-store placement as a means to reach new customers, pointing to early discussions with retailers as a motivation for moving these products to the beauty aisle. O’Connor said Nature’s Bounty worked with “a few retail partners to not just talk to consumers, but also uncover how it might come to life in their stores, in a different set of the store,



Educating the Consumer As supplements increase in popularity, the need to regulate the products on the market and the ways those products are marketed to consumers has increased as well. Since the early 1990s, the Food and Drug Administration has been strengthening regulations about supplement purity and potency, as well as the claims that a company can make about its products’ benefits. Leaders in the industry consequently have been grappling with how to best educate consumers as simply and effectively as possible. Miami Lakes, Fla.-based Mason Vitamins redesigned its labels to be more consumer friendly and easy to understand, according to general manager Patricia Jones. “There’s more intentional labeling,” she said, which makes a difference when products are grouped by type rather than brand. “There’s only so much you can say legally on the label now, and there are also new FDA regulations that are going into place that everyone has to adhere to, to make the labels more globally understandable.” While these regulations are in place to keep consumers safe, suppliers turned to the Internet to convey more detailed information about their products. This is a particular issue for Sylvan Bio, a purveyor of American-grown red yeast rice. Red yeast rice supplements have come under scrutiny by media in recent years as ineffective and/or adulterated products have made their way onto shelves. “Because of how the structure/function rules work with the FDA, we can’t be as direct with the consumer as we’d like,” said Kurt Behrens, Sylvan Bio spokesperson. “We’d like to say, this contains the right amount of active ingredients that will lower your cholesterol.” Yet in order to adhere to FDA guidelines, they do not make specific claims about lowering cholesterol, instead relying on their search engine optimization prowess to guide consumers to the research they need. “As consumers do their research, go to our website and start to understand the potential of red yeast rice, they come to understand the importance of quality and attention to detail.” Behrens said. “As retailers see repeat sales, they too come to understand the value of the long-term consumer who is motivated not by low price by but by results.”

in the beauty aisle, and that’s an example of taking health concerns, packaging it differently, putting it together for consumers differently,” so that they are able to find solutions to their problems that they might not have considered otherwise. Ronkonkoma, N.Y.-based Piping Rock also is squarely focused on being a solutions provider across most of the overall category. The 8-year-old company prides itself on offering a wide range of affordable products in virtually every segment of the market, from traditional supplements to exotic herbs and holistic oils, company officials said. Interestingly, while the goal of wellness and what it entails has evolved, the path

to get there is an old one, well-traveled. Naturally sourced ingredients are important to many consumers, and purity and quality of ingredients are essential ways suppliers are learning to stand out. “The consumer is currently — from our research — looking for products that are healthy,” said James Lacey, CEO of Westlake Village, Ca.-based Healthy Ventures. “Anything they put inside them today, they’re really reading the labels.” As a consequence of this, Lacey said Healthy Ventures’ products are “pure, made in the USA. All of these things are really important to the consumer today.” Purity of product also is a crucial selling

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point for Kittanning, Pa.-based Sylvan Bio’s red yeast rice offerings. While the active ingredient has been clinically proven, it has come under media scrutiny as a supplement in recent years as a result of variations in strength and purity among products offered by brands and companies that dilute or otherwise adulterate their red yeast rice. “We market a product that we know will

be effective when taken as directed, and that we have 100% confidence in the potency and the purity and the efficacy of the product” said Curt Behrens, the company’s spokesperson. “First and foremost, to play in the natural space and to have any credibility, you have to deliver on your product.” Second to that is using online channels to ensure that consumers are able to get the information they need to make the most informed choice, especially with the guidelines from the Dietary Supplement Health and Education Act of 1994 imposing guidelines on what manufacturers can state on a product’s label, Behrens said. O’Connor at Nature’s Bounty said he also sees the value in utilizing the online space to educate shoppers. “What we’ve been doing in the online space is investing quite heavily in things like digital and social awareness, building to help intersect with consumers, but then really making sure that we have the right information,” he said. “We make

it easy for consumers to first find the education they need, but also to make the simplest purchase they can.” As online sales continue to grow in the VMS segment, Lacey highlighted what he termed a “bleeding of the channels. Brick and mortar is now getting into the retailer business and the e-commerce business. Then you’ve got Amazon, who’s the gorilla on the e-commerce side, getting into the retail side,” he said. What can manufacturers do to staunch the flow? According to Lacey, suppliers have to be comfortable with both channels, and they have to be able to maintain price integrity across these channels as well in order to succeed. This emphasis on keeping pricing consistent across channels was echoed by Mason Vitamins’ Jones, who pointed out that as online shopping behaviors continue, suppliers simply need to “get with the program or get out of the way.” dsn

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HEALTH | VITAMINS, MINERALS AND SUPPLEMENTS PRODUCTS Nature’s Bounty Sleep Complex 3 Nature’s Bounty’s new Sleep Complex 3 pill features three different layers with triple action timerelease technology to help consumers get a good night’s sleep. The product contains a layer of calming L-theanine and nighttime herbs meant to help relax users, a layer of rapid release melatonin to help them fall asleep, and a layer of time-release melatonin to help them stay asleep, the company said.

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Nothing to Sneeze at Cough-cold, analgesics and allergy categories respond to industry issues, consumer desires By Nora Caley


hen consumers get the sniffles, they have many questions besides whether it’s a cold or allergies, and whether they should take time off work. More and more, people also want to know which over-the-counter products are available, what they contain and which symptoms the medicines can relieve. If a child is sick, consumers worry about the correct dosage to administer, and whether the products are safe. The Consumer Healthcare Products Association, citing Nielsen numbers, reported that U.S. consumers spent more than $34.3 billion on OTC medicines at retail in 2017, up from $33.6 billion in 2016. Cough-cold products are a large category, as people spent more than $8.6 billion on upper respiratory products in 2017. Also, people spent more than $4.1 billion on OTC internal analgesics, or pain relief products, in 2017. The growth of the cough-cold set provides opportunities for retailers to increase sales in a key category, but manufacturers said one side effect of the expansion is consumer confusion. “While categories typically see one segment rise and others fall, allowing for space management, the cough-cold category is seeing growth across nearly all segments, which is putting pressure on retailers to manage assortment and allot space,” said Dawn Hampton, senior director of marketing for Johnson & Johnson Consumer. “Data suggests that 43% of shoppers don’t know the cause of their symptoms, and while they use 2.2 products on average, choosing which product can be difficult.” To make matters more complex for consumers, these are usually urgent shopping trips, taken when the shopper is not feeling well or has to buy something quickly for a



sick child. “Consumers don’t want to spend a ton of time in aisle nor know there are additional solutions behind the counter,” Hampton said. Johnson & Johnson offers a range of adult and children’s cough-cold products from Tylenol Cold + Flu to Sudafed. The products address cold symptoms, head pain, fever and body aches. Sudafed is designed to relieve nasal congestion, which the company said is one of the most disruptive symptoms for cold sufferers. Recently, the brand launched Sudafed Pressure + Pain

cough liquid. Hampton pointed out that liquids are the fastest-growing form within the sinus segment. Natural products also are on-trend now, and in 2018 Johnson & Johnson acquired the pediatric cough syrup brand Zarbee’s Naturals, which offers products that contain honey, melatonin, ivy leaf, zinc and other ingredients.

New and Old Ingredients

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HEALTH | COUGH-COLD agreed that the category is growing. Yet, he noted that consumers are overwhelmed by the choices since many of the new products are “me too” SKUs, which he said “serve no clear purpose other than brand expansion.” The crowded category is difficult for consumers to navigate. “Consumers suffer from ‘confusion at first sight’ when approaching the category for both adults and kids cough-cold remedies,” Machin said. “Moms today, especially millennial moms, are looking for safe natural alternatives to traditional allopathic drug solutions for their child’s cough or cold.” Lifelab Health offers a full line of children’s and adult organic honey cough-cold products under the brand HoneyWorks. The company launched HoneyWorks Kids in 2018, which includes cough syrups and throat spray. One of the HoneyWorks Kids cough syrups and HoneyWorks Adult cough syrup contain dextromethorphan, DXM, HBr cough suppressant. “Most adults prefer to have an active ingredient without any unnecessary additives,” Machin said. Products containing the cough-relief ingredient dextromethorphan are favorites for many consumers. According to a 2016 study commissioned by CHPA, OTC availability of DXM will save consumers and the healthcare system between $21 billion and $31 billion over the next 10 years. The estimated savings were based on the fact that consumers could take a product with DXM and continue on with their busy days, and avoid unnecessary trips to the doctor.

Big Cautions for Little Kids

Children’s cough-cold medicines are a hot topic in the category. Parents are concerned about ingredients that their kids are ingesting, and also are uncertain about proper dosing. The Centers for Disease Control and Prevention, citing figures from the National Electronic Injury Surveillance



System — Cooperative Adverse Drug Event Surveillance project, estimated that each year in the United States, approximately 60,000 emergency department visits result from unintentional medication overdoses among children under the age of five years old. Among those, 5% are due to medication errors, such as when caregivers give too much medicine by mistake. To make it easier to administer the proper dosages to children, manufacturers have developed single-dose packaging solutions. For example, Drkids, a brand of Tamarac, Fla.-based Unipharma, offers a line of premeasured single-use vials of liquid pediatric cough-cold and allergy products. The products include natural cough syrups, natural nasal drops, allergy relief, and pain and fever solution. They contain such natural ingredients as Himalayan salt, agave syrup, English Ivy Leaf and others. The products are sugar-, alcohol- and dye-free. “Our brand is mostly a millennial brand,” said Edgar Arrieta, business development manager at Unipharma. “Millennials are trying to avoid the use of drugs, and they want something natural. All our products are clean label.” The term “clean label” generally refers to ingredients that are natural, familiar and easy to understand. For example, the Natural Cough Syrup, which is available for children between the ages of 2-to-5 years old and for children 6-to-12 years old, contains organic agave syrup, which Arrieta said has less potential for containing allergens than honey does. Agave also has a lower glycemic index. In light of the increasing obesity rates nationwide, parents are trying to avoid feeding their kids sugar with their medicine. The premeasured single-dose vials are important not only for administering the correct dosage, but also for preventing contamination, especially in the nasal product. “With a regular bottle, you put the tip in the kid’s nose, and that liquid gets

contaminated right away,” Arrieta said. “With our unidose, you don’t have to worry about cross contamination. You open the tiny vial, apply the liquid in the kid’s nose, then you throw it away, so you’re not reusing any contaminated liquid.”

Seeking Alternatives

The growth in homeopathic remedies can help retailers drive sales in the entire coughcold category. “Today’s consumers value having choices in over-the-counter medicines, and products with better-for-you ingredients like homeopathic medicines are poised for growth,” said Gary Wittenberg, vice president of national accounts at Newtown Square, Pa.-based Boiron USA. “Based on a need for more personalized options, consumers are purchasing both allopathic and homeopathic medicines, thus increasing the retailers’ market basket.” Wittenberg added that last year was an especially active flu season, which helped boost sales of homeopathic products. “Consumers were looking for the kind of solutions that Boiron readily provided, so a lot of awareness and trial was generated,” he said. “We expect our business to continue to grow based on our increasing rate of new consumer acquisition.” In 2017, Boiron launched ThroatCalm tablets. The product relieves sore throat pain without such numbing agents as benzocaine, which is found in many sore throat OTC medications. Last year, the company launched ColdCalm Kids in single oral liquid doses. “Consumers are seeking alternatives to the usual array of allopathic products,” Wittenberg said. “They want to learn more about better-for-you options and are discovering that homeopathic medicines can offer a tailored and more personalized treatment.” According to the Food and Drug Administration, “Children under 2 years of age should not be given any kind of cough and cold product that contains a decongestant or antihistamine because serious and possibly life-threatening side effects could occur.” The FDA’s website explains that reported side effects of these products included convulsions, rapid heart rates and

HEALTH | COUGH-COLD death, and parents and caregivers should use caution when giving cough and cold medicine to children over the age of 2 years old. For many parents, the solution is to look for homeopathic remedies. “Homeopathy has the ability to dose down to six months,” said Les Hamilton, president of Los Angelesbased Hyland’s. Hyland’s Baby products are for infants up to 2 years old, and Hyland’s 4 Kids products are for children between the ages of 2-to-12 years old. Several of the remedies are available in two packs, including Hyland’s Baby Tiny Cold Tablets Day & Nighttime Value Pack. The nighttime product contains chamomile to help children sleep. “For homeopathic products, the ability to address nighttime products for kids is an advantage, especially when mom and dad have to go to work,” Hamilton said. Retailers that are succeeding in the category have expanded their cold-cough sets, especially in the pediatric set. Instead of a cough-cold section with a few SKUs of pediatric products, some retailers now have vast pediatric sets that include pain, cough, cold, allergy and other ailments. One thing retailers should not do, Hamilton said, is separate the homeopathic from allopathic solutions by creating a separate set. “Retailers tell me they want to create a natural homeopathic set, but we discourage that,” he said. “The mom or dad or other consumer at the shelf does not shop based on natural or allopathic. They shop based on, ‘I’ve got a cold.’ When natural is next to allopathic that is the way to go.”



Other Trends

Another important issue affecting the category is antibiotic misuse. “Over half of antibiotic prescriptions written for upper respiratory infections do not meet criteria for an antibiotic,” said Sarath Malepati, creator of EZC Pak, a brand from PPC Group in Los Angeles. “This is fueling an antibiotic resistance crisis.” EZC Pak, Malepati said, is designed to replace this inappropriate practice with an evidence-based OTC alternative. EZC stands for echinacea, zinc and vitamin C, and the supplements offer immune support. “Broadly, brands like EZC Pak have a genuine mission and purpose that align well with millennial customer demand, and will continue to resonate in the years to come,” he said. “Expect newer brands to play a large role in overall category sales lift.” Millennials are not the only target for cough-cold products, because people of all ages can get a cold or the flu. In fact, the aging population is another trend that affects the category. “Seniors are the fastest-growing population in the world,” said Latisha Tillie, senior brand manager at Theraflu, a brand of Warren, N.J.-based GSK Consumer Healthcare. “As people age, their respiratory symptoms become more concerning and troublesome to deal with.”

Tillie also pointed to other trends that affect the category. Emerging middle-class consumers cannot afford to miss a day of work because of respiratory symptoms, so they need to prevent illness and get back to normal quickly if they do get ill. Also, as healthcare costs continue to rise, there is a greater emphasis on personal responsibility, prevention and self-care through OTC medicines and pharmacists. Urbanization and high-density living will result in a more rapid spread of cold and flu viruses, exacerbated by poor air quality and pollution. Innovation also is helping drive the category as new, faster delivery systems and devices help people take medications more easily. Along those lines, Theraflu offers PowerPods, which are compatible with most single-serve coffee makers. The idea, Tillie said, was to expand cold and flu remedies beyond the medicine cabinet and into the kitchen. “We recognized the ever-changing lifestyles of our consumers, and through the expansion of the current Theraflu portfolio, we are aiming to modernize how consumers can achieve cold and flu symptom relief.”

More Growth Ahead

CHPA also noted that 61 million consumers have avoided missing work, school or other scheduled appointments due to illness because they had access to OTC cough medicines to alleviate their symptoms. Two-thirds of surveyed adults and 70% of surveyed parents rely on OTC cough medicines to treat their and their children’s symptoms. Manufacturers said the category will expand even more. Johnson & Johnson’s Hampton predicted the category will continue to see low to mid-single digit growth across all segments. “Duration reduction, immunity boosting and soothing care items will have the higher growth rates as consumers continue to adopt regimens to maintain their overall health,” she said. “When they do catch a cold, consumers will look to manage across the most severe stages of the cold, but are also now more apt to treat the early and later recovery days with drops, topical, salines and other complementary care products and treatments.” dsn

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HEALTH | COUGH-COLD PRODUCTS Boiron Adds Kids’ Product

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Boiron USA is adding ColdCalm Kids liquid unidoses to its line of homeopathic medicines. ColdCalm Kids comes in sterile, premeasured liquid doses. Parents need only snap off the cap and squeeze the tube’s liquid into their child’s mouth. The individual dose eliminates the need for an added preservative and is free of flavors, dyes, lactose, sugar and artificial sweeteners. The medicine also has a wider life span usage. The company said that while most children’s cold medicines have a minimum dosage age of 2 or 3 years old, this medicine can be given to younger children age six months old and older.

Lifelab Health, which makes HoneyWorks Adult Soothing Throat Spray Plus Zinc and HoneyWorks Adult Honey Cough Syrup Plus Dextromethorphan, is adding the Kids HoneyWorks line. The products contain 100% U.S.-sourced natural organic honey. Kids HoneyWorks Kids Soothing Throat Spray is a metered-dose pump spray in a portable, convenient delivery system. Kids HoneyWorks Grape Flavored Honey Cough Syrup has the active ingredient dextromethorphan, or DXM, for long lasting, safe and effective relief of cough-cold symptoms. Kids Honey Cough Syrup, with ivy leaf extract syrup, provides safe, drug-free relief from throat irritation and bronchial inflammation, while ensuring no harmful side effects.

Pfizer Extends Cough-Cold Lines

Theraflu Moves Remedies into the Kitchen This cold and flu season, GSK Consumer Healthcare is rolling out Theraflu PowerPods Severe Cold, a new innovation for Theraflu cold and flu symptom relief. Compatible with single-serve coffee machines, Theraflu PowerPods brew up a cup of warm, soothing relief with the press of a button. Theraflu PowerPods can help relieve such cold symptoms as fever, nasal congestion, cough, headache, sore throat pain and more. Theraflu PowerPods are available in Daytime and Nighttime formulas.



Pfizer is launching products under its Advil and Robitussin brands. The No. 1 selling pain reliever, Advil MultiSymptom Cold & Flu, now relieves eight symptoms —nasal congestion, nasal swelling, runny nose, sneezing, sinus pressure, headache, fever and body aches. The cold and flu medicine is formulated with a combination of three active ingredients, including ibuprofen, which a 2017 Provoice Survey indicated is the No. 1 doctor-recommended ingredient for treating flu symptoms, plus phenylephrine and chlorpheniramine. Advil Multi-Symptom Cold & Flu is recommended for people age 12 years old and older. Robitussin Honey combines real honey with cough medicine, and is available in three different varieties — Honey Cough + Chest Congestion DM Max, Honey Nighttime Cough DM Max, and Children’s Honey Cough + Chest Congestion DM. Every dose contains 19.2% grade A True Source Certified Honey, which is ethically and transparently sourced.

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Crown Labs Buys Five Brands from GSK

Huel Launches Ready-to-Drink Meal, Other Innovations Huel, a company that focuses on creating nutritionally complete meals that

are convenient, affordable and have a minimum impact on the environment and animals, unveiled its latest innovations. The Los Angeles-based company is launching Huel Ready-to-drink, new flavors of Flavor Boosts and reformulated v1.1 Pre-blend Powders. Each of the products are vegan and contain 27 essential vitamins and minerals, protein, essential fats, carbohydrates, fiber and phytonutrients, the company said. “We just recently shared our $26 million investor announcement with Highland Europe. We’re beyond thrilled to continue our growth and announce our newest launches, Huel Ready-to-drink, new flavors of the Flavor Boosts and our reformulated v1.1 Powders,” Julian Hearn, co-founder of Huel, said. “While creating these new products, our consumers who are constantly on the go were at the forefront of our minds. We wanted to create new lines that offered a solution for everyone who feels they’re unable to consume nutritionally complete meals due to their hectic schedules. We know our U.S. consumers have given us their continued support and loyalty, which is why we’re committed to expanding and providing only nutritionally complete, affordable, sustainable meals for all.” Huel’s Ready-to-drink product comes packaged in a 16.9-fl.-º bottle made out of 25% recycled plastic. It is gluten-free, soy-free, low in sugar and contains 20 g of plant-based protein, the company said. The beverage, which is available in vanilla and berry flavors, launched on Dec. 28. The Flavor Boosts launched Nov. 29, and the v1.1 Pre-blend Powders hit shelves on Dec. 18.



Johnson City, Tenn.-based Crown Labs has added several OTC brands to its portfolio. The company purchased the North American distribution rights for acne wash PanOxyl, anti-itch lotion Sarna, antifungal Zeasorb, antifungal powder Desenex and pain-relief gel Mineral Ice from GlaxoSmithKline. “Acquiring these strong heritage brands strengthens Crown’s OTC portfolio and adds significant value across multiple categories,” said Jeff Bedard, Crown Labs president and CEO. “I am especially excited to bring the Stiefel brands to Crown as I personally enjoyed tremendous success in marketing them as a field sales representative for Stiefel in the ’80s and ’90s.” Crown Labs is a Hildred Capital Partners Portfolio company. Partner David Solomon, who also is chairman of Crown Labs, said, “The addition of these brands provides meaningful diversification for our OTC portfolio and enhances our breadth of trusted consumer skin care therapies. We will continue to look for interesting opportunities to build on Crown’s consumer healthcare, aesthetic and prescription product lines.” Crown Labs has selected the Emerson Group to manage the sales activity and logistics of the products. “We are extremely excited to partner with Crown Laboratories,” said Scott Emerson, chairman and CEO of the Emerson Group. “Crown’s management team, dermatology expertise and enhanced resources will serve the acquired brands well in a very attractive growth category for our retailers.”


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PPOk, Ideal Protein Partner on Weight Management Program

New higi Partnership Opens Doors to Patient Data Population health-enablement company higi has unveiled a partnership with Bridge Connector, a company that offers streamlined integration solutions for healthcare organizations. The partnership, the companies said, will allow for integration between higi health stations, using Health Connect and any electronic health record or hospital health system using Bridge Connector. “The power in our platform comes when we remove the friction between connecting the consumer with their trusted healthcare provider to allow the consumer to consent and share their data in real time to enable additional touchpoints and timely interventions,” said higi CEO Jeff Bennett. “With Bridge Connector, we continue to make it easier for consumers to be their healthiest by making health care better connected.” Bridge Connector and higi said that the collaboration opened the door for higi’s platform to connect with providers, payers, employers, retailers and others looking to manage patient data. Patients use higi’s roughly 11,000 health stations in retail locations close to a million times weekly, higi said.

P&G Closes Buy of Merck KGaA’s Consumer Health Business Procter & Gamble now has a larger

consumer brand portfolio and geographic scale. The company has closed its 3.2 billion-euro acquisition of Darmstadt, Germany-based Merck KGaA’s consumer health business. The acquisition increases its footprint in most of the world’s top 15 OTC markets. Top brands that join the Cincinnati-based company’s portfolio include Neurobion, DoloNeurobion, Femibion, and Nasivin, among others, which are sold largely in Europe, Latin America and Asia. Merck KGaA’s Uta KemmerichKeil — formerly president and CEO — now joins P&G, leading P&G Personal Health Care International,



which includes he newly combined OTC business in Europe, Latin America and Asia, as well as India, the Middle East and Africa. “Today marks the beginning of an exciting new era for P&G Personal Health Care, as we now move forward to realize the great potential of our combined businesses,” said Tom Finn, president of P&G Global Personal Health Care.

The Pharmacy Providers of Oklahoma, or PPOk, announced a partnership with Ideal Protein that would offer a weight management program to community pharmacies. “The program’s clinical results are outstanding, and the business model aligns with the focus of our RxSelect CPESN network, which is to provide profitable, high impact, enhanced pharmacy services for patients in the community,” said John Crumly, PPOk’s executive director.. The Ideal Protein Protocol lets pharmacies augment their income outside of medication sales, and focuses on helping patients achieve healthy weight loss. “Our combined efforts will help make Ideal Protein available to more pharmacies, and in turn align with our company mission to help as many people attain healthy and sustainable weight loss, and all of the associated health benefits,” said Thomas Barus, Ideal Protein director of pharmacy services. The program includes weekly customer appointments and call-in-coaching sessions to ensure compliance and patient education. “We all got into pharmacy to make a positive difference in our patients lives. Ideal Protein has given us another vehicle to achieve that goal,” said Bill Osborn, PPOk member and National Community Pharmacists Association president.


A Whole New Makeup World Social media, influencers and online threats change how retailers approach cosmetics By Debby Garbato


Walgreens debuted in-store Birchbox beauty sections in December.



n the 1990s, glossy magazines and supermodels were the trendsetters in beauty and fashion. Young women emulated — or at least aspired to emulate — the clothing and color cosmetics looks dominating the runways. There were few other choices. Food, drug and mass channels echoed this mantra. They offered a handful of dominant cosmetic brands supported by mega ad campaigns featuring the same looks and supermodels. This left little room for smaller players, who normally lacked the funds to support top talent and big ad budgets. Today, supermodels and major brands no longer call all the shots in beauty. The advent of the Internet, social media and beauty influencers from YouTube and Instagram are providing myriad choices in color cosmetics and purchasing channels. A growing cadre of online beauty subscription services also let women regularly test new makeup from brands large and small. The degree to which millennials indulge in makeup, what they buy, what they spend, and where they get suggestions on looks and styles are up to them alone. “There’s no one-fits-all in beauty,” said Pooja Agarwal, vice president of operations at Birchbox, an online subscription beauty company. “There’s a trend towards personalization. Before, everyone saw the same assortment. Consumers still care about beauty and feeling their best. But they don’t

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need a supermodel to tell them what that is. Technology has changed the game.” The new rules of the game are threatening food, drug and mass, where color cosmetics generate some of the highest profits per square foot. According to Nielsen, consumer spending on beauty has shifted online faster and more significantly than in nearly every other CPG category. Almost 1-in-3 U.S. dollars spent on beauty is spent online. In total, Americans spent more than $12 billion online for beauty and personal care over the past year. That represents 30% of dollars flowing through online channels, up from 24% the year before. It also signifies the biggest shift among major FMCG categories. “These retailers are competing against online players,” said Matt Sargent, senior vice president of retail at consultancy Frank N. Magid Associates. “We’re facing a major change in how convenience purchasing is addressed. Cosmetics can’t exist in its current structure and expect to have sustainable business in these channels. If they don’t figure out a different way, the cosmetics category will die there.” Mass retailers are fighting back. In addition to offering smaller brands, a growing number are partnering with online-only labels. They also are employing in-store consultants to advise shoppers on product use, while featuring exclusive lines that tap into new trends and differentiate them from their online and offline competitors. “Keeping cosmetics relevant in food, drug and mass is incredibly important,” Sargent said. “People come for cosmetics and shop other categories. While price is a differentiator, you can’t have that alone. They can’t out scale Amazon or carry the same assortment as Jet.com. Part of what’s happening is a threat and part is an opportunity. They must figure out a model they can effectively scale to deliver an experience that doesn’t feel boxed away.”

On-Site Beauty Advisors

In recent years, such chains as Walgreens, CVS Pharmacy, Target and H-E-B have begun employing beauty advisors, or consultants, in major markets during prime shopping times. Unlike department store



Rite Aid’s new nail bar features a high-quality nail selection.

consultants, they are not commissioned, employed by cosmetic manufacturers or assigned to leased departments. Nor do they primarily target beauty aficionados. Hooked on the latest trends, enthusiasts frequently visit department and specialty stores and make major investments in high-priced cosmetics. Mass channels tend to attract more casual customers who want to fill a specific need, purchase cosmetics for a special occasion or have a limited budget. “The Walgreens customer isn’t going to spend an hour seeing everything,” said Birchbox’s Agarwal, whose company recently launched special sections there. “She’s purpose-driven — she needs a lipstick or tips for a special occasion, versus people who go to a specialty retailer to explore and see what’s new.” While they do not push specific brands, advisors’ ability to answer questions and solve problems often encourages consumers

to try products or buy a higher-priced item with an application or purpose they were unsure of. Consultants also provide an experience unavailable online. “They’re raising the bar on what a drug store is,” said Joann Marks, founder and CEO of Cosmetic Promotions. “Consultants make stores more interactive. A consumer may not know which concealer is best. They also want to touch and feel. Anything that lets people try on colors helps. These consultants are highly trained on everything from proper skin care to how to apply eyelashes.” CVS Pharmacy’s BeautyIRL pilot offers custom makeovers, braids, manicures and hair blowouts at four Florida, Connecticut and Massachusetts locations via a partnership with Glamsquad, an on-demand, in-home beauty provider. Additional locations for the format are planned in 2019. The BeautyIRL concept stores also have “Mini Must-Have” boutiques, where

COLOR COSMETICS customers can assemble a personalized bag of miniature beauty products, and a “Testand-Play Hygiene Bar” to safely try products. Alyson Fischer, senior associate at Chicago consulting company McMillian Doolittle, said beauty departments in BeautyIRL stores are double the usual size and feature additional brands and accessories in special brand boutiques. “It’s all about service and in-store experience.”

In-Store Events

Retailers also drive traffic and sales with in-store events. In addition to makeup tips, shoppers can watch demos and receive coupons and gift bags, Marks said. Her company works with retailers and suppliers to orchestrate these occasions by providing samples, coupons and testers. This strategy generates “higher than average rings.” Walgreens, for one, stages events twice monthly. Loyalty program customers receive extra points for purchases made during these times, furthering the sales lift. Some events are seasonal. This past fall, Cosmetic Promotions worked with Rite Aid to stage back-to-school and Halloween demo events in its top 200 locations, providing toolkits and beauty experts. Around the same time, Kokie Cosmetics also conducted Halloween makeup demo events, working with online makeup subscription company Ipsy. “We’re creating excitement, working with our supplier partners creating in-store beauty events in key markets,” said Cathy

Furtado, Rite Aid’s category manager of skin care, sun care and general cosmetics. “They create great buzz around new items and sampling.” Sheila Keating, national sales manager and vice president of sales at Kokie, said demos are definitely having an impact in that 25% of Rite Aid’s cosmetic purchasers are new customers. At mass, Walmart used demos during the first half of 2018 to showcase new Hard Candy cosmetic items at 365 locations. Events included personalized makeup consultations and tips on creating day and night looks. Demos emphasized five new collections containing items retailing for under $10. Walmart became the exclusive retailer of the former prestige brand in 2009. This type of aggressive pricing is key when targeting millennials. “People discuss millennials as one big cohort,” said Maria Steingoltz, managing director at LEK Consulting. “But there are older millennials in their late 20s, early 30s and younger ones, who are much more constrained from an income standpoint. This explains the success of such brands as e.l.f., which offers affordable products — that’s their whole positioning.” According to recent estimates, about 25% of millennials live with parents, far more than previous generations.

The Korean Influence

Korean-style makeup, natural ingredients and cruelty-free cosmetics increasingly

have become important. Sometimes, ingredients emulate popular food and beverage trends involving such healthy fare as avocados or green tea. “There’s a tie between what people eat and put on their faces,” said Laura Maclay, project manager at New England Consulting Group. “If you want to know what’s happening in cosmetics, look no further than the restaurant industry. Ingredients are very important and people want to know where they come from.” Rite Aid is featuring facial masks with ingredients that include lemon, avocado and sugar. Masks are merchandised on a spinner. And Target, Fischer said, eventually wants to eliminate certain chemicals from all beauty products. Korean-influenced products are made from traditional ingredients like pearl powder, snail secretions, starfish extract, bee venom, ground bamboo, seaweed and Tremella mushrooms. Research group Kline said U.S. K-beauty sales totaled $225 million in 2016, up 30% over 2015. Ingredients have been popular in Korea for years, but growth of social media brought them worldwide attention. Today, CVS Pharmacy features a K-beauty section in 2,000 stores. Products are affordable, easy to use and have eye-catching, colorful packaging. “K-beauty, which emphasizes skin care and effective natural ingredients, merges health and beauty, which is at the core of our mission,” Maly Bernstein, CVS


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COLOR COSMETICS Pharmacy’s senior director for divisional merchandising, beauty care, told the Pittsburgh Post-Gazette when the company rolled out its K-Beauty offering. “It was a natural extension. Customers have been providing great feedback, and the program has exceeded expectations.” Rite Aid also is bullish on K-beauty. In November, Kokie Cosmetics became an in-store exclusive. Developed by a Korean beauty executive, Kokie’s fun, colorful packaging sports elephants, following the millennial trend towards using animal designs on packaging —“Kokie” means “elephant” in Korean. Cosmetics are cruelty-free and affordable. “Millennials don’t want their mother’s makeup,” Keating said. At the same time, Rite Aid launched Cake Beauty, another in-store exclusive featuring vegan, all-natural hair and body products. Also cruelty-free and certified by PETA, the company’s motto reads, “Beauty without bunnies.” “Both brands offer something our competitor doesn’t,” Furtado said. “We’re capitalizing and moving quickly on trends like the new nail bar, which offers best-in-class nail selection. We are also creating a new beauty shopping experience by adding large focal cutouts, way-finding within the beauty aisles.” Both new Rite Aid lines started as onlineonly labels. Keating said Kokie’s popularity was fostered by 600 online influencers, a strategy developed when the brand was launched four years ago. “It’s all about engagement, which drives in-store sales. With millennials, old ways of promoting products aren’t working.” When it comes to differentiating mass beauty departments, changes did not begin yesterday. Retailers have been experimenting with new models for several years. Some have worked, some have not. Yet it is crucial these channels continue testing and reinventing themselves to gain and maintain consumer momentum. “The experiments you’re seeing are important,” Sargent said. “This is a crucial category for driving margins. With the convenience component usurped by e-commerce, they must do things differently.” dsn



Birchbox Curates Walgreens Beauty Sections Walgreens is creating in-store Birchbox beauty sections designed around how millennials shop. The first six opened in December in New York, Chicago, Los Angeles and Minneapolis. In early 2019, these will be joined by five more in Chicago and Los Angeles, as well as in Dallas and Miami. These 400-to-1,000-sq. ft. dedicated sections are differentiated from Walgreens’ existing beauty departments by special signage and elevated design elements. A curated assortment features skin care, hair and makeup products from 40-plus prestige brands marketed by Birchbox, which specializes in online subscription beauty. Birchbox-trained Walgreens beauty consultants are available to assist shoppers. Announced in October, the deal also involved Walgreens’ purchasing a small interest in Birchbox. In addition to its strong millennial following, Birchbox brings prestige beauty to Walgreens and a style of marketing and merchandising that suits the chain’s casual beauty customer. “The addition of Birchbox to our growing beauty offering is a big step in delivering on our promise to differentiate and elevate the beauty experience,” said Richard Ashworth, Walgreens’ president of operations, in announcing the partnership. Products, said Pooja Agarwal, vice president of operations at Birchbox, include what she called “approachable” basics — not the stuff coveted by beauty junkies. “We have a section of basics, of simple routines, including one called ‘night out,’” she said. “It’s less about trends.” Merchandise is organized by end use, not brand, simplifying the experience. “It’s hard to compare products merchandised by brand,” she said. “We make it easy and show how products work. We don’t give shoppers too many choices, so it’s not overwhelming. Millennials want options to do it their way.” Brands include Sand & Sky, Wander Beauty, Huxley and Davroe. Rather than push products, consultants try to make the right “fit” by asking customers how important beauty is to them, how often they use cosmetics and how cosmetics fit their lifestyle. In-store events focus on such techniques as five-minute, get-out-of-the-house-quickly makeup routines — “not about how to do the perfect cat eye,” Agarwal said. Stores also will offer Birchbox subscriptions and the “Build Your Own Birchbox” experience, a signature element of the online brand’s two physical flagship stores in New York and Paris. —Debby Garbato




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Whisker Network Manufacturers are growing the men’s grooming category with new products By Carol Radice


t no longer is a taboo for men to take care of their appearance. Gone is the mind-set that men are not interested in anything more than basic grooming options. In its place is a more evolved understanding that, given the opportunity, men want to buy products that help them look and feel their best. As assortments have changed, so too has the preferred destination for men to buy their grooming products. According to observers, the category — once dominated by brick-andmortar stores — is seeing business slowly gravitate toward online merchants. Officials at Wahl Clipper, for example, said that while it is true that sales of clippers are up more than 10% this year in stores thanks to a trend toward selfbarbering, the increase is even greater online. A similar picture can be painted for trimmers. Steven Yde, vice president of marketing, North American consumer division at Sterling, Ill.-based Wahl, said that his company’s professional business has been exploding, a leading indicator, he noted, that in addition to online, consumers are buying grooming tools from nonreporting channels as well. “Culturally, men continue to want a more casual appearance and this extends to grooming,” Yde said. “As long as beards are on-trend and men continue to wear their hair short, at least on the sides, interest in grooming and related products will remain strong.” Wahl recently extended its reach in men’s grooming, moving beyond clippers and trimmers with a line of beard wash, balm, pomade, shave cream, shampoo and body wash. Officials at Procter & Gamble, whose World Shave Headquarters is based in Boston, said that when it comes to shaving, men want closeness and comfort first,



which the company focuses on when introducing new products. That said, Pankaj Bhalla, director at Gillette & Venus, North America, noted the facial hair trend is still going strong, which he attributed to several key factors, including men’s’ desire to reflect their individuality and masculinity, as well as a shift from traditional work culture to a more casual and flexible environment. “More men are choosing to have a range of facial hair styles, and are developing an interest in facial hair styling and the tools that go with it,” he said Facial hair may be on-trend, but P&G’s research shows shaving still represents the largest segment of the men’s grooming category. For instance, even among younger men, 43% of guys age 18-to-24 years old and 39% of men age 25-to-34 years old are clean-shaven. In comparison, the next largest segment is 22% representing those who shift between clean-shaven and stubble, followed by beard and moustache with 12% of men age 18-to-24 years old, and 16% of men age 25-to-34 years old adopting this look. Only 1% of men choose to refrain from grooming entirely. The company’s latest efforts have fallen under its “One Size Does Not Fit Every Man” motto, offering products that can address unmet needs for large portions of the shaving population. Its latest launch took aim at sensitive skin. In November 2018, Bhalla unveiled Gillette Skinguard at the brand’s Global Innovation Summit. “One size does not fit all when it comes to razor,” Bhalla said. “That’s why we’ve innovated across our portfolio this year.” Gillette Skinguard features a plastic bar that sits between two blades in the center of the cartridge, absorbing pressure from the hand and smoothing skin, while raising the blades to stop irritation. The launch of the Skinguard razor was accompanied by




the introduction of Gillette Pure, a line of shaving cream and gel free of alcohol, parabens, dyes and sulfates. These innovations come as the brand partners with 3-D printing company Formlabs to create personalized, 3-D printed razor handles that can be bought exclusively online. “From a buying-habit standpoint, we want to be wherever guys want to shop — which continues to be both in-store and online — and we want to make sure wherever we are, we have a range of products available to meet their needs,” he said. For consumers who do not shave, companies like Amityville, N.Y.-based Sundial Brands are looking to provide facial hair care products that work, but also deliver on the needs of men who care about the ingredients in these products and what they stand for. Sundial created its SheaMoisture Men’s Shave collection featuring shea butter with just that in mind, according to Nicola Chung, the company’s senior director of innovation. Chung said the goal was to offer solutionbased, efficacious products that address men’s most common grooming concerns and, at the same time, feature natural, certified-organic and fair-trade ingredients. “Shave care products featuring natural ingredients don’t need to be at a premium price and only sold in a specialty store,” Chung said. “We created the collection after hearing from male customers who complained of razor burn, bumps and other unpleasant side effects of shaving, especially those with very thick, coarse curly facial hair.”



In addition, the popularity of beards with men of all ages, backgrounds and professions has created the need for grooming products specifically developed for beard care. “Beards now seem to be a form of self-expression, and men talk to us about how they reveal their personality through their beard,” Chung said. “Whether sporting stubble, scruff or a full-grown beard, facial hair has become an important accessory for men.” Calling beard care one of the hottest trends right now, Chung said Sundial created its SheaMoisture Beard Care collection with invigorating maracuja oil and certified organic shea butter to soften, smooth and cleanse without drying out facial hair and skin. The nutrient-rich ingredients offer anti-inflammatory relief to help soothe and reduce razor burn, ingrown hairs and blemishes, she said. The products also are cruelty-free and made without

sulfates, parabens, phthalates, propylene glycol and mineral oil. Officials at White Plains, N.Y.-based Combe — which markets such brands as Just for Men, Aqua Velva and Brylcreem — said that sales of men’s grooming products are slowly rebounding from last year. Ralph Marburger, vice president of global gray care, men’s grooming, pointed out that men’s body wash, beard care, and electric razors and trimmers are showing strong growth. Marburger cited the brand Harry’s as one of the key reasons sales of men’s grooming products are on the upswing. Now featured at both Target and, as of May, in Walmart, Harry’s initially began as an online only subscription service with a prime audience that was the younger, next generation consumer. The verticallyintegrated company’s millennial-inspired shaving and skin care product line, which includes razors, shaving gel, post-shave

MEN’S GROOMING products and blade refills, was designed to offer a differentiated experience in terms of value, quality and affordability, company officials said. Thus far it is proving its value on the shelf and helping retailers attract younger shoppers.

Point Out the Obvious

“Men continue to look for a fast and convenient shopping experience,” Marburger said. “They are very task focused and don’t shop around much.” Best practice retailers, he said, are winning men’s grooming consumers through an enhanced in-store experience. However, in general, he said traditional retailers are losing ground to e-commerce merchants, especially with new product launches. “That’s where many shoppers are trying the products, and then continue to buy them there,” he said. Brick-and-mortar retailers are trying to capture some of the sales that had been leaking to e-commerce as previously directto-consumer-only brands now are expanding into traditional retail outlets. Marburger believes the increased shelf space allocated to beard care and the proliferation of brands in this segment will continue to result in strong growth and incremental sales for brick-and-mortar retailers. “At the same time, though, there continues to be a lack of true white space product innovation in men’s grooming,” he said. Research conducted by Combe has shown that male shoppers crave a better and more convenient in-store shopping experience. What’s more, the company’s research shows that men are aware of the transformation many retailers are making to enhance the experience for female shoppers in beauty and clearly feel left out. “They tell us they are looking for all men’s grooming and personal care products to be merchandised together with the right adjacencies within the aisle with similar improvements to the shopping experience they’re seeing in other areas of the store. Men are open to education where needed, but want a more aesthetically pleasing presentation of products,” Marburger said. At the same time, Combe’s research shows that men do not want to be overwhelmed with too many brand choices within categories,

but they want depth of assortment within trusted brands. P&G’s Bhalla suggested retailers consider moving Gillette products from closed to open sales on the shelf. In cases where retailers employ open sales shelving, Bhalla said P&G has seen up to a 40% decrease in out-of-stocks and sales increases of up to 39%. “We’ve also seen encouraging results when retailers create a ‘male aisle’ that provides a one-stop solution for guys, including blades and razors, skin care, personal care, hair care, and fragrance,” he said, noting that by doing so retailers can see doubledigit growth in blades and razor sales, increase trial, and purchase intent. Yde’s advice for retailers is simple — he said that if they are going to sell men’s grooming products they need to commit to the category. “Provide education and build trust so that the consumer need not go somewhere else to get a quality product,” he said. He also stressed that retailers

that price products appropriately will earn shoppers’ business. “Given that consumers can simply tap a few buttons on their phone to see if an item is worth buying, retailers who are pricing out of line with the market are seeing footsteps leave.” Chung agreed that education is key for both consumers and sales associates, noting that training and sampling for sales associates helps them to try the offerings firsthand and share their enthusiasm with consumers. “For consumers, educational signage at shelf, pamphlets with coupons and video tutorials all help to drive interest and trial,” she said.

Creating Buzz

In addition to its new vacuum trimmer that will hit stores in February, Wahl will be launching a new clipper technology this year. Smooth Cut Pro is Wahl’s quietest, smoothest clipper to date, Yde said. The company also will be introducing an 18-carat gold trimmer in celebration of its 100th-year anniversary. And while not entirely for men, the company also is debuting a new cordless percussion massager next year, the first consumer massager from Wahl with a retail price of more than $100. With a third of all current sales occurring online, Yde sees great opportunity for brick-and-mortar retailers to grow this part of their business, but said to do that they need to tackle the category more aggressively. “Ironically, when people are not stressed by the weight of their economic situation, they don’t seek out stress relief as much,” he said. “Therefore, the industry needs to send a clear message to male — and female — shoppers that it is OK to take care of and pamper yourself.” Breakthrough products that provide new consumer benefits will continue to drive growth in men’s grooming, Marburger said. “One of the few recent examples of this has been Just For Men’s Control GX Grey Reducing Shampoo, which we launched in 2017,” he said, noting that Control GX is continuing to grow strongly behind increased marketing and media support of the brand, as well as new line extensions. “The future is bright for men’s grooming innovation founded in white space.” dsn




Weleda Adds to Skin Food Experience Weleda has expanded its Skin Food Original Ultra-Rich Cream collection to include three new formulas. The additions include products for the lips, a body butter and lighter version of the original. Featuring such ingredients as rosemary, chamomile, pansy and calendula, each of the new bases also are rooted in different base formulas of sunflower seed oil, lanolin, beeswax and shea butter. Products include: • Skin Food Light Nourishing Cream, a lighter version of the classic original, with chamomile, calendula, sunflower seed oil and shea butter. It’s suitable for both the face and body, and comes in two sizes — a 1-fl.-oz. size that retails for $12.49 and a 2.5-fl.-oz. size for $18.99; • Skin Food Body Butter features a base of sunflower seed oil, shea butter and cocoa butter. It comes in a 5-fl.-oz. size that retails for $18.99; • Skin Food Lip Butter contains a blend of viola, chamomile and calendula to soothe lips. It comes in a .27-fl.-oz. size that retails for $6.99; and • Skin Food Original Ultra-Rich Cream features a base of beeswax, and sunflower and sweet almond oils, The cream comes in a 1-fl.-oz. size that retails for $12.49 and a 2.5-fl.-oz. size for $18.99. The Skin Food Experience line will hit national retail shelves in early 2019.

SheaMoisture Debuts Wash-and-Go Focused Collection Sundial Brands’ SheaMoisture is looking to help those with natural hair achieve a simple wash-and-go style. The brand unveiled its new Coconut Custard Make It Last Wash N’ Go collection, which helps

those with a range of hair textures achieve a defined style that is long-lasting, SheaMoisture said. Created with natural, certifiedorganic and fair-trade ingredients with a bond-building complex that enhances natural curl patterns, the five-piece collection extends the life of natural hair between stylings, the company said. Each of the products are formulated with virgin coconut oil that contains vitamin E and triglycerides, and coconut milk custard to help hold moisture in hair. The Make It Last Wash N’ Go line includes shampoo and conditioner,



each of which retail for $11.99; Curl Primer, which helps detangle hair and improve curl definition, retails for $13.99; Curl Definer Gel-Oil, which minimizes frizz, builds definition and retails for $13.99; and Reviver Oil, which refreshes curls and reduces shrinkage, retails for $11.99. SheaMoisture’s Coconut Custard Make It Last Wash N’ Go collection is cruelty-free and formulated without parabens, phthalates, mineral oil or propylene glycol. It hit CVS Pharmacy shelves in January.

CoverGirl Intros Full Spectrum Line CoverGirl is unveiling a new line of products inspired by multicultural women. Featuring cosmetics for the eyes, lips and face, the collection contains a vast range of shades that are highly pigmented and designed to pop against darker skin tones. The collection includes: • Matte Ambition All Day Shine Free Foundation in 20 shades. It retails from $8.69 to $11.99; • Matte Ambition All-Day Shine Free Powder Foundation in 12 shades. It retails from $9.96 to $13.39; • All Day Idol Brightening Concealer, in six shades. It retails from $8.42 to $11.49; • The Contour & Correct Expert Cream Palette, which retails from $9.96 to $13.49; • Sculpt Expert Multi-Use Cheek Palette, in three shades. It retails from $9.96 to $13.49; • Matte Ambition Skin Primer preps skin, provides a shine-free finish and retails from $9.96 to $11.49; • Color Idol Satin Lipstick, which comes in 20 shades. It retails from $6.92 to $9.49; • Matte Idol Liquid Lipstick in 12 shades. It lasts up to 24 hours, and retails from $6.92 to $9.49; • Gloss Idol Moisturizing Lip Gloss in 14 shades. It retails from $6.92 to $9.49; • Defining Moment All-Day Eyeliner comes in six shades and retails from $6.92 to $9.49. CoverGirl’s Full Spectrum collection is available online from Ulta Beauty’s and will hit mass, drug , food and online retailers in February.

SPOTLIGHT ON: DARKER SHADES Essie’s New York-Inspired Nail Polish Collection For those who want to add a little something darker to their nails, a new collection from essie, which was inspired by the hustle and bustle of New York City, has just what they’re looking for. With shades that range from booties on broadway’s dark navy blue to say it ain’t soho’s metallic copper, consumers are sure to find what they need with a $9 price point in salons and beauty destinations worldwide.

Mad for Matte Eyeshadow Palette If it’s a smoky or dark eye users are after, e.l.f. Cosmetics’ Mad for Matte Eyeshadow Palette in Holy Smokes has shades that are perfect for shading, highlighting and contouring. Brown, pink, gray and black shades are featured in the palette, which retails for $10 and can be found on the brand’s website.

Revlon ColorStay Crème Gel Pencil in Cashmere Plus Keeping a focus on the eyes, for those seeking something slightly subtler, there’s Revlon’s ColorStay Crème Gel Pencil in Cashmere Plus. Lower or upper lashes can be lined with the pencil, which retails for $8.99 at drug stores and mass retailers nationwide.

CoverGirl’s New LashBlast Volume Mascara Once eyes have been perfected, lashes certainly cannot be neglected. That’s where CoverGirl’s LashBlast Volume Mascara comes to the rescue. With 50% more bristles, the company said it can offer instant volume and full coverage. Available in such shades as very black and black-brown, it retails for $8.95 at mass market retail locations.

COL-LAB Matte Addiction Capsule Collection Last, but not least — the lips. COL-LAB’s limited edition Matte Addiction Capsule Collection create bold and dramatic lips with just a few swipes. With shades ranging from Maach, a bold red, to Here to Slay’s dusty purple, the product retails for $9.99 at Sally Beauty.




A Must-‘See’ Category How the multibillion dollar As Seen On TV industry has lasted more than 30 years By Carol Radice


ave trouble opening a can? They have a product for that. Want food to cook faster without burning? They have a product for that. Need a hose that doesn’t take up a lot of space when stored? Guess what? They have a product for that, too. “They” are the handful of behind-thescenes companies producing products under the As Seen On TV label. The companies that market As Seen On TV products are experts at generating excitement, awareness and enthusiasm for these “must-have” items right out of the gate. Yet, what most do not know is that hundreds of hours, if not more, go into the vetting and making of the next hot product. Though As Seen On TV companies may spend millions of dollars on advertising for quick brand building and consumer recognition, in reality most of the revenue comes from retail sales. Often merchandised in high-traffic locations, As Seen On TV products appeal to impulse shoppers and, when executed correctly, can add significant incremental sales to retailers’ bottom line. But the category’s marketers want retailers to be aware of one very important thing: partnering with quality companies is one of the most important aspects in building sales in this category. Unsuspecting retailers already have learned this the hard way and lost sales because of teaming up with companies offering cheaper counterparts. Yet, how do retailers determine which As Seen On TV companies and products are best for their product mix? Experts said the most successful items share four distinct qualities: they engage, innovate and solve a common problem — all while appealing to the mass market. Jeta Kaziu, director of marketing at Norwell, Mass.-based Harvest Direct, pointed out that her company is known for



DiamoTech non-stick pan

bringing original, innovative and quality products to the market, and it is these three qualities that help the company stand apart from many of the As Seen On TV companies. Some of the company’s latest hits include the Pressure Pro Pressure Cookers, DiamoTech pots and pans, Tornado F4 Can Opener and the Armor Garden Hose. Harvest Direct is a key vendor at such major retailers as CVS Pharmacy, Walgreens, Rite Aid, Walmart, Target and Bed Bath and Beyond. “We are always looking for the next ‘big hit,’ and work with a wide range of inventors that bring innovative ideas to many categories, from housewares to fitness to kids and pets, but we also have an R&D division in house,” Kaziu said.

Housewares, garden and pet are three areas she predicts will continue to drive sales in the category this year. Product innovation is the hallmark of this category and, according to Chris Ferguson, CEO of Edison Nation, based in Charlotte, N.C., innovation is happening faster than ever before. Edison Nation is best known for such products as Mister Steamy, Emery Cat, Gyro Bowl, Eggies, Hot Huez, Perfect Bacon Bowl and Party in the Tub. Ferguson said watching the trends on crowdfunding sites illustrates just how quickly the early adopters will commit money for innovation that has yet to even make it to production. At the same time, the definition of “TV” has expanded,

increasing the opportunities for exposure prior to retail. When it pitched Happy Feet Massage Slippers and Ambervision sunglasses to the masses back in the ’80s, officials at Fairfield, N.J.-based Bulbhead, formerly Telebrands, knew from the consumer response that it was going to be the start of something big. Since then, the company has successfully marketed a number of other devices and gadgets that have gone on to become household staples. Among its most successful products are Star Shower Holiday Lighting, Ped Egg, Colorama coloring book therapy for adults, My Pillow, Red Copper Cookware, Pocket Hose, Atomic Beam and Hurricane Spin Mop.

According to company CEO and founder AJ Khubani, Bulbhead’s strategy follows a three-legged approach — find low-tech product ideas with mass appeal that can be produced inexpensively and whose value easily can be demonstrated. “This is an exciting business and that drives our company to always be on the lookout for the next big hit,” Khubani said. For years, the company regularly held an Inventors Days at its corporate offices where everyday inventors were given the opportunity to pitch their ideas. For ideas that are given the green light, Bulbhead steps in and handles the rest, including product development, market research, manufacturing and merchandising. Moving fast is key, and once the product is advertised on TV, it typically appears on retail shelves in under two months. In return for turning over their ideas, inventors receive a negotiated share of sales through royalties, with higher amounts being paid for items that have gone through development, have a patent or are being manufactured already. Another company that has been around for nearly 20 years is Wayne, N.J.-based Ideavillage Products. Finishing Touch personal hair remover for women, the Micro Touch men’s personal groomer, Copper Fit Compression Sleeves and Snackeez 2-in-1 Snack and Drink Cup are just some of the products the company is most known for. Its success centers around providing affordable, quality products that offer solutions to life’s everyday problems. Staying true to this strategy while employing aggressive national marketing and merchandising strategies has catapulted many of Ideavillage’s products to the top-performing position in their class, company officials said. Support from such mass retailers also has helped drive interest.

Focus on Quality and Speed

The category has done well due to the stringent vetting process companies apply to ensure only the best ideas develop into As Seen On TV products. At Edison Nation, for instance, every product idea goes through a rigorous eight-step evaluation process, including web testing, in which a website is created to present the product to consumers. The data generated from there is used to understand the level of purchase intent for the product. If the product successfully passes its web test, the product development team refines and finalizes the design and engineering of the item through prototypes until everything is working perfectly. “We have invested a significant [amount] of money in state-of-the art equipment, including 3-D printers, laser cutters and water jets to move this process along quickly,” Ferguson said. And considering the average category product lifecycle is under a year in the drug channel and sales velocity is strongest out of the gate, getting items onto the shelf quickly is key. Given the margins and prices ranging from $10 to $60, featuring this highimpulse category in such strategic places as power wings endcaps, or even its own section, has proven to be highly effective in capturing interest, especially for retailers in which space is tight. Given the number of companies producing products for the As Seen On TV category, Kaziu’s advice is to work with companies offering the original invention. She said focusing on higher quality products will pay off in the long run in terms of repeat customers, low return rates and customer loyalty. Lastly, she said, follow the marketing plans in all platforms. “While TV is still king, don’t forget to use social media connections to market these products,” Kaziu said. dsn




‘Self-Disruption’ Gains Force at Retail Committing to massive change to head off emerging competitors By David Orgel

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


ndustries have lined up like bowling pins. Taxis. Media. Entertainment. Hotels. Being disrupted is such a common occurrence in today’s business world that for any particular industry, it’s not a question of if, but when. That’s a fact retailers know well, having been on the receiving end of disruption. Increasingly for some, there’s more talk about responding with efforts to disrupt themselves. These companies are reexamining their own businesses before they are blindsided by outsiders. Self-disruption isn’t a brand new concept — Apple and Amazon often have been cited for their ongoing self-disruption efforts to drive innovation. There are consultants who instruct leaders in how to reimagine their industries and organizations. Self-disruption has a masochistic sound to it, but it’s more about absorbing some pain today to head off potential demise tomorrow. Speakers discussed the importance of selfdisruption in late November at the annual DSN Industry Issues Summit in New York, where executives cited examples in health care, retail and other segments, and expressed the urgency to move quickly. (See page 34.) There is a common refrain from emerging technology companies that would disrupt an industry such as health care, said panel moderator Chris Dimos, who is president of retail solutions at McKesson. “I am the Uber for health care, I am the Lyft for health care. I’m going to revolutionize health care.” These challenges need to be taken seriously, and more retailers are aiming to act earlier rather than later. Ryan Rumbarger, vice president of pharmacy operations at CVS Health, said the challenges go beyond just health care to impact a range of new consumer demands from retail. “Consumers are demanding more convenience, so we think about how do we disrupt ourselves before we get disrupted,” he said. “When we decided to go nationwide with delivery, it was because we said, ‘We’ve got to get ahead of things,


and meet our patients when and where they need and want us.’” The challenges inherent in self-disruption can be daunting. The fact is, emerging companies aiming to disrupt don’t have all the constraints of more established entities, including the extensive infrastructures. That’s a big advantage that makes newer players nimbler. So how can established, traditional companies effectively disrupt themselves? A single formula doesn’t exist, but there were some compelling ideas cited by panelists. One is the need to commit to massive change that may be painful in the short-term, but hopefully beneficial down the road. Another strategy is to borrow from successful retailer efforts elsewhere in the United States and in other countries. Some traditional retailers are moving beyond their comfort zones in this way, finding innovative examples to emulate. It’s even better if those examples already exist in-house. Walgreens’ Rina Shah, vice president of pharmacy operations and specialty, said her company can benefit by leveraging some best practices from United Kingdom-based sister company Boots that continues to innovate in wellness and beauty. It’s also essential for retailers to think more like the start-ups they aim to head off. What do these start-ups do really well? “They are absolutely obsessed with the customer and what that customer experience needs to look like,” said Clay Courville, vice president and general manager at McKesson Pharmacy Technology and Services. Finally, it’s not enough to aim for self-disruption; you have to execute on it well. This requires a regular recommitment to the mission, doing whatever it takes to move it ahead. You can’t do this without having people on board who embrace a disruptive mind-set. Once a retailer is well on the path to selfdisruption, there’s an opportunity to reintroduce its organization to customers in compelling ways, with new kinds of stories. That’s the point at which you know pain is turning into gain. dsn

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