JACKSONVILLE, Fla. -- Winn-Dixie here has gained profitability by co-branding its store brand Medic name on diabetes management tools, produced by Home Diagnostics, Fort Lauderdale, Fla.
Other supermarkets involved in the co-branding deal include Albertson's, Boise, Idaho; Meijer, Grand Rapids, Mich.; and Weis Pharmacy, part of Weis Markets, Sunbury, Pa.
The tools can come packaged in a starter kit value pack consisting of a blood glucose meter, 100 test strips, a miniature lancing device with various comfort settings, and lancets created for gentle skin penetration with a retail price of $47.99. Other retailers who signed with Home Diagnostics were unavailable for comment. But, according to Winn-Dixie, the program gives retailers increased gross profit, and highly visible brand awareness.
Wally Hays, pharmacy category operations manager for Winn-Dixie, said the "profits on the product are better than nationally branded products, at almost half the price." He said 50 Prestige Smart System test strips are priced at $24.95, compared to $39 for other brands.
"As people have to test more often, the cost of these strips are a lot less," said Hays.
He said the product has been successful in the short time it has been merchandised in the stores.
"We've only had one promotion, but so far it seems very good, and I'm sure it will continue to grow," he said. The weekly promotion in mid-January gave customers a free blood glucose meter valued at $9.99 with the purchase of 100 test strips that retailed for $39.95. Hays said the retailer will have a similar promotion for the product in the near future.
HDI's vice president of consumer healthcare, Gregg Johnson, said the diabetes co-branding tools build brand equity and high profitability for retailers, as well as price savings to consumers.
"Wouldn't it be nice if every time a consumer pulls out their monitor they see the Winn-Dixie name on it?" Johnson asked. He said the store brand receives high visibility when the consumer uses the product an average of three or four times a day.
According to Johnson, the diabetes category is an increasingly profitable one. It has been growing 17% annually, and diabetics spend approximately $4,000 on prescription drugs a year.
He said Winn-Dixie's 4-foot or 8-foot diabetes planograms are displayed in the pharmacy sections, while the Prestige Smart System is integrated with other brands.
Johnson confirmed feedback from other retailers has been positive. "Retailers are very pleased with it," he said. According to Johnson, many retailers said profitability in the category has doubled from a year ago, and "sales are doing very well."
Other drug chains who merchandise the Prestige Smart System include CVS, Woonsocket, R.I.; Eckerd, Largo, Fla., and Deerfield, Ill.-based Walgreens, the first retailer to co-brand the products last April.