HEALTHY OUTLOOK

The growing trend toward self-care bodes favorably for the continued effect of private label on health and beauty care categories.Over the last five years, the dollar share of private-label HBC in the grocery channel has grown from 7.2% in 1994 to 9.5% in 1998. Unit share rose from 11% in 1995 to 12.3% last year, according to figures compiled by Information Resources Inc., Chicago.The largest private-label

The growing trend toward self-care bodes favorably for the continued effect of private label on health and beauty care categories.

Over the last five years, the dollar share of private-label HBC in the grocery channel has grown from 7.2% in 1994 to 9.5% in 1998. Unit share rose from 11% in 1995 to 12.3% last year, according to figures compiled by Information Resources Inc., Chicago.

The largest private-label sales gains in categories that generate $10 million or more in revenues, for the 52 weeks ended Jan. 3, 1999, were: adult incontinence, up 26.4%; weight control products, up 22.9%; feminine hygiene, up 20.4%; and antacids, up 18.1%. In an era of self-medication and wellness, more consumers than ever are using nonprescription, over-the-counter medicines to treat minor illness and chronic complaints. They are using these medications with great confidence due to trust in the government's review and approval process for OTC medicines, which have switched in record numbers over the last few years.

Said one category manager from a large New England chain, "Ibuprofen is ibuprofen and there really can't be anything different about it in the name brand [from that of the private label]."

Of the 15 OTC approvals last year, many of them line extensions and labeling changes, manufacturers were hot on the heels of branded drug companies to launch private-label versions pending the end of the drug's market exclusivity. These products included cimetidine (comparable to Tagamet HB), nicotine gum (comparable to Nicorette), and OTC ranitidine (comparable to Zantac 75).

Perrigo, Allegan, Mich., also began shipping ibuprofen oral suspension, an analgesic comparable to the Children's Motrin Oral Suspension. The private-label company, in an alliance with Elan Corp., which received approval for the nicotine transdermal-system patch, will market the generic patch to mass-market retailers in the fourth quarter of Perrigo's fiscal year.

"The number of OTC switches and national-brand knockoffs entering the market over the past several years has sure helped instill a higher level of confidence in private-label HBC," said John Bovender, HBC buyer at Merchants Distributors, Hickory, N.C. Pharmacia Upjohn's Rogaine, which lost its market exclusivity soon after being launched in 1996, best demonstrates the effect private label can have on emerging OTC categories. Last year private label represented 36% of the hair-growth category. Rogaine held a 59% share.

"Private label is gaining more importance everyday in HBC," said Jorge Dalmau, vice president of sales and marketing at USA Labs, Coral Gables, Fla., which supplies private label in sun, skin and hair care as well as bath and body. Consumers have become wise to the fact that private-label products have the same quality, and much better pricing, than their branded equivalents, he said.

The dietary-supplement category also is on a meteoric rise as more than 25% of consumers or 60 million Americans are currently purchasing and using one or more herbal or miscellaneous supplements, according to a report by Hartman & New Hope, Bellevue, Wash., a research company that tracks purchases of nutritional supplements.

Historically, private label has been a key factor in the dietary-supplement category. In the food channel, private label represents 28.2% of the $733 million vitamin category. Speaking at a Center for Business Intelligence workshop in Washington, Harvey Hartman, president of Hartman Group, said, "We've done over a thousand hours of interviews across the U.S. We hear it over and over again. There really is no brand recognition."

What consumers do recognize is the place where they buy these products, said Hartman, which gives added incentive for retailers to build their store-brand image through the in-demand vitamin category.