STIMULATING ALTERNATIVES

The integration of natural or alternative remedies into supermarkets' traditional cough/cold sections makes perfect sense to many retailers, especially from a whole-health solution selling perspective.Consumers are reading about these products and are actively seeking them out. "This is more than a trend, it's a lifestyle," said Karen Lewis, national natural-living purchasing director for Wild Oats

The integration of natural or alternative remedies into supermarkets' traditional cough/cold sections makes perfect sense to many retailers, especially from a whole-health solution selling perspective.

Consumers are reading about these products and are actively seeking them out. "This is more than a trend, it's a lifestyle," said Karen Lewis, national natural-living purchasing director for Wild Oats Community Markets, Boulder, Colo. "It's driven by dissatisfaction with health care. I've been in this for 18 years and we're seeing more crossover than ever. Herbal remedies are where health care began and it makes sense to come back."

Rich Savner, a spokesman for Pathmark Stores, Woodbridge, N.J., agreed it is a consumer-driven market.

"Customers are more in tune to natural remedies and we see an increased desire to self-medicate. We have increased our vitamin footage, but we are looking carefully at the background of the manufacturers in the [natural] category. There is a lack of regulation, so we want to make sure the products are efficacious," he said.

Retailers large and small, and in all classes of trade, are rethinking how they merchandise these in-demand alternative remedies relative to traditional over-the-counter medications.

The almost faddish demand for zinc lozenges, thought to ward off symptoms of the common cold, was perhaps the beginning of alternatives' breakthrough to the OTC aisle. However, some industry sources say this was an anomaly rather than the start of any new merchandising trend in cough/cold. Just what kind of inroads alternative therapies, such as echinacea, green tea, goldenseal and Chinese herbal formulations, will be making into supermarkets' cough/ cold departments, or other OTC categories, remains to be seen.

"Herbals are generally purchased by the vitamin buyer and marketed there," said Dennis J. Purtell, vice president of national accounts for IVC Industries, Freehold, N.J. "With few exceptions, you won't find them in the cough/cold category."

In the case of zinc lozenges, "they made a major impact two years ago and were marketed in the cough/cold department because stores had such a runaway hit on their hands," Purtell said.

"Because of the Cleveland Clinic Foundation Study [a much-publicized report that many thought validated zinc's effectiveness], they were allowed to print bold statements like 'lessens the duration of the common cold,' which you can't say on a bottle of echinacea."

Purtell also stressed that a savvy manufacturer like Warner-Lambert Co., Morris Plains, N.J., which manufactures Halls, did an outstanding job with its Halls zinc rollout. "They had all the ancillary displays and outposting, which could be used in high season and cut back to one or two facings for the rest of the year."

The downside of this explosion, some have said, is that stores got stuck with too much of it. Two winters ago, it was almost impossible to buy zinc lozenges. Last year retailers stocked up, then were hit with a particularly mild, snowless winter that killed the market.

Other alternative products, although they have been around for many years, are just hitting the mainstream and are still in a state of flux for retailers.

Several major supermarket chains contacted by SN declined to comment on this subject, while others said the effect of alternatives on traditional categories like cough/cold was still "too new," or it was "too early" to make a constructive assessment.

Of course, there has been a proliferation of alternative products as well as standard OTC remedies. "We're definitely seeing an increase in stockkeeping units, and supermarkets are having a hard time finding space," said Mike Internicola, general manager of general sales for Celestial Seasonings, Boulder, Colo. "By some accounts, there are 21 different echinaceas alone out there."

"We look at these products [both alternatives and standard OTCs] like any other," said Savner of Pathmark Stores. "It's all based on the merit of the item and how it fits into the category. Nonproductive SKUs are discontinued and we add new ones. It's pretty straightforward category management."

Supermarket retailers also have been reluctant to use mainstream merchandising strategies to sell alternative products because of the less stringent standards governing them, in comparison with OTCs, which require Food and Drug Administration approval. Some retailers said they were downright uneasy about them. At the same time, they added, the category is just too explosive and profitable to ignore.

Sales figures, while impressive, are extremely sensitive to media exposure. As an example, Brian Pansari, senior product manager at Whitehall-Robins, Madison, N.J., said, "In 1996, St. John's Wort sold about $100,000 in mass-market channels. After the big '20/20' ABC-TV story last summer, and then the Newsweek cover, the product exploded and it's now selling over $100 million."

"The supplement category is at about $640 million and projected to be $1 billion by next year. We've found that 50% to 60% of supplement buyers also drink herbal teas, which is why we've made the tie-in," said Celestial Seasonings' Internicola.

Celestial Seasonings recently introduced a line of 17 supplements in pill form, with names like "Echinacea Cold Season" and "Mood Mender," which contains standardized St. John's Wort.

With such explosive growth, mainstream pharmaceuticals companies that once may have shrugged off these products are jumping on the bandwagon. Whitehall-Robins has announced its intention to purchase Solgar Vitamin & Herb Co., Leonia, N.J., and is coming out with herbal products under its Centrum brand.

Warner-Lambert, which introduced Halls drops with zinc, also has a licensing arrangement with Celestial Seasonings to manufacture "Soothers" herbal throat drops.

Pansari said, "Many supermarkets have limited space, and while they do carry the various OTC cold-and-cough products, multivitamins and zinc, some just don't want to compete with drug stores. Some would rather focus on their gourmet departments or delis."

But that's changing too. According to Jason Ford, a spokesman for Warner-Lambert, "We know that last year more than a third of all families used what are considered alternative remedies, so it's a market with tremendous potential. We have also learned that four out of 10 doctors said they'd be inclined to recommend such remedies if they were supported by clinical studies."

Similar thoughts were voiced by Jim Kindel, category director of nutritionals for Bayer Corp.'s consumer care division, Morristown, N.J. "Our research indicates it's time for the category to go mainstream. One out of every three non-users claims it's because they find the category confusing.

"Yet four out of 10 non-users indicated they were intrigued by these products but are still a little skeptical. Out of those four, three indicated they'd buy into a category if it were provided by a nationally known and trusted name. That's where One-A-Day comes to the party."

Bayer has introduced a line of One-A-Day specialized supplements that addresses eight major benefits by category, including one called "Cold Season." Each product contains a combination of vitamins, minerals and herbs.

"Consumers will no longer have to sort through a mind-boggling array of herbs and vitamins to figure out which ingredients to use to maintain their good health," Kindel said. "We're making it more convenient. We've done the homework and even the legwork, so they don't have to."

It will be interesting to see how these products are handled at the retail level, since they are a prepackaged example of solution selling. This has already been a popular strategy for supermarkets to make shopping more efficient. Theoretically, category managers could eliminate some SKUs and group both OTC and natural products together by function in sections flagged "throat health" or "flu relief."

In actuality, however, that rarely happens -- at least not with many big chains like Pathmark, where, Savner said, "We have our herbal supplements and vitamins categorized by type. We keep the echinaceas together and the St. John's Worts together and, on occasion, we'll group by brand if we have enough to merchandise that way. But at this point in time, we don't mingle our OTC and natural remedies."

But according to Bob Garrison, that may be changing. Garrison wears two hats, as chairman of the board of Next Pharmaceuticals, Newport Beach, Calif., and a member of the advisory board of the Dietary Supplement Institute, Pasadena, Calif.

"I think within the next 18 months, you'll see some mixing of OTCs and natural remedies, because of the packaging, positioning and promotion by the pharmaceutical companies. That will dictate where it is sold."

He pointed to upcoming natural cold products that will be sold alongside Contact and Sudafed, and natural sleep remedies that will be stocked with Nytol and Sominex.

This approach has long been taken by natural-foods operators. "Wild Oats has always divided our categories this way," Lewis said. "We do 'cough/cold/flu/allergies,' 'eye health,' 'women's health,' 'insomnia,' etc.

"We also provide in-house literature as well as approved manufacturers' brochures. We try for 100% consumer service."

Conventional supermarkets are less likely to take this approach, although they may have to rethink categories as products like One-A-Day's new specialized formulations, which defy easy categorization, hit the market.

Garrison claimed many grocery stores are already making a concerted effort to train clerks about natural products. "And Pathmark is taking a lead from Rite-Aid in educating pharmacists about them."

Indeed, pharmacists may be the real key to sales. But until fairly recently, many of them were uncomfortable with anything that lacked FDA approval. "Pharmacists by nature are skeptics," said John Beckner, pharmacy director at Ukrop's Super Markets, Richmond, Va.

"It's important for pharmacists to be comfortable with these natural remedies. That's why Ukrop's is using our corporate nutritionist to bring them up to speed," he said.

That was echoed by Bob Teas, pharmacist at Pratt Discount Foods, Shawnee, Okla. "I'm not an herbalist, but I've had to educate myself so I can help customers. I've taken continuing-education courses and done a lot of reading myself. I've had to -- we get so many questions."