The winter forecast calls for colds. Lots of them.
Retailers are preparing for what is expected to be a busy cough-and-cold season, and their shelves are fully stocked with reformulated products after last year's recall of medicines containing phenylpropanolamine (PPA).
"All the manufacturers that were reformulating products have done so," said Karen Ramos, spokeswoman, Albertson's, Boise, Idaho. "There were a very small number of products that were not reformulated, but all the over-the-counter products have been reformulated."
Last fall, the Food and Drug Administration recommended that manufacturers stop marketing products with PPA because of a possible link to hemorrhagic strokes. Products included weight-loss drugs, such as Acutrim, and several cold remedies, including Contact, Alka-Seltzer Plus and Dimetapp.
"Everybody was waiting for Alka-Seltzer Plus, so that's back out there," said Susan Spring, health and beauty care buyer, W. Lee Flowers, a Lake City, S.C., retailer and distributor. "They've reformulated it and got it back out on the shelves."
She said her stores put out their cough-and-cold displays in the first week of October, using special racks about two feet wide with seven shelves, holding a total of 44 stockkeeping units. The racks, which are placed at the front end of the HBC aisle, are left out through the entire cough-and-cold season.
Spring works with her suppliers to determine what goes on the racks, based on sales performance, and then the stores support them with advertising. Some new products generally get mixed in with the top sellers on the displays, but this year Spring said the selection of new products was pretty thin.
"There's just not a lot of new items this year," she said, echoing the opinions of other industry observers.
In addition to the special display racks, Spring said W. Lee Flowers also maintains a cough-and-cold section about eight feet long in its main sets.
Other retailers also said their primary concern this year has been stocking displays with reformulated products.
"We're mainly getting everything back from the PPA scare that happened last year," said Dave Shepherd, general merchandise and health and beauty care merchandiser, Scott's Food Stores, Fort Wayne, Ind. "All those items have been reinstated."
He said he hasn't seen a whole lot this year in terms of new product innovations or marketing promotions backed by manufacturers.
Manufacturers "are doing everything they can just to get [the products] reinstated and get them back on everyone's shelves," Scott said.
He said suppliers have assured him that there are no changes in the effectiveness of the medications.
Shepherd said the 18-unit Scott's chain generally puts its cough-and-cold displays out by early November. The chain uses a four-sided rack that is placed in front of the pharmacy.
According to predictions from Surveillance Data, Plymouth Meeting, Pa., this year's cough-and-cold season will be significantly stronger than last year's.
"We anticipate that the September-to-December cough-cold category is going to be up significantly," said Gerald Kress, president, Surveillance Data. "We think the number of people affected -- the number of colds -- will be up 18% to 22% over the four-month period vs. the same time period last year."
Sales of cough-and-cold products generally increase at about one-third the rate that illnesses rise, according to Kress, because families tend to buy a single remedy to treat multiple individuals. An increase of 18% in the number of colds this year will result in about a 6% gain in product sales, he said.
During the first two weeks of tracking the number of colds in the United States, Kress said it appears the rate of illness is up 17.4% through Oct. 5, compared with a similar period a year ago.
Surveillance Data generates its forecasts from surveys conducted among physicians in 72 U.S. markets. The FAN index (Flu/Cold/Respiratory Illness Activity Notification Program) is supplied to retail pharmacies and drug makers around the country.
This year, the company also launched a new data program, called FANDemand, which is predicting sales of individual products for the coming four weeks using historical sales data and other information.
"We'll be able to tell retailers exactly how much product they are going to sell, by SKU and by distribution center," Kress said.
He said the FANDemand program, which kicked off on Oct. 15, was designed to help eliminate the problems some retailers have had with certain products being out of stock. It is being tested with the 26 largest drug store retailers and is being funded by drug makers, led by the Whitehall-Robins Healthcare division of American Home Products, Madison, N.J., McNeil Consumer Products, Fort Washington, Pa., and Novartis, Basel, Switzerland.
As of mid-October, retailers said they hadn't started to see an impact on this year's sales, although they said they were expecting a busy season.
"It hasn't really hit yet, so we haven't seen any increases in the sales of those products," said Ramos of Albertson's. "But we expect to if this season is like the previous one."
Drug stores are the No. 1 channel for all the major cold remedies, according to data from Information Resources Inc., Chicago. Supermarkets are the No. 2 channel, ahead of mass merchandisers.
In the cold/allergy/sinus tablets/packets category, drug stores tallied $603.2 million in sales during the 52-week period ended Aug. 12, vs. supermarkets' total of $571.1 million. Mass merchandisers trailed with $429 million in sales.
In the category of liquid and powder remedies, drug stores had sales of $266.9 million, vs. $259.7 million in supermarkets and $173.8 million in mass merchandisers. Drug stores sold $173 million in the category of throat drops, vs. $157 million in sales in supermarkets and $89 million in mass merchandisers.
The Quigley Corp., Doylestown, Pa., is one cold-remedy manufacturer that could be benefiting from last year's PPA warning. Quigley makes Cold-Eeze lozenges and gum, which are zinc-based products touted for their use of natural ingredients.
"Our sales have begun to make an improvement, and we believe it has something to do with the PPA [warning]," said Albert Piechotta, director of advertising and communications, Quigley Corp. "We believe that, quite frankly, a lot of consumers are looking for an all-natural product, and not just all-natural, but something that has clinical support and efficacy."
The company has taken steps to improve its position in the market this year, including introducing some new products, establishing a relationship with a new broker and launching some new marketing initiatives.
The company, which distributes its products primarily through the drug store channel, kicked off the season with a buy-one, get-one-free campaign. It also recently named Acosta Sales and Marketing, Jacksonville, Fla., as its new broker sales representative.