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Wellness on a Budget

Despite the recession, consumer demand for health and wellness products remains high, although many are looking for value-priced alternatives. Private-label over-the-counter remedies, more selective purchasing of supplements and increased use of pharmacy discount generics programs are all part of the 2009 wellness picture, according to retailers and other experts contacted by SN. While people in dire

Despite the recession, consumer demand for health and wellness products remains high, although many are looking for value-priced alternatives.

Private-label over-the-counter remedies, more selective purchasing of supplements and increased use of pharmacy discount generics programs are all part of the 2009 wellness picture, according to retailers and other experts contacted by SN.

While people in dire financial straits may take draconian measures, even they are making choices recognizing the value of health. Many of the recently unemployed are filling their time exercising, choosing fitness centers with less expensive fees. For those who may be short on cash or just concerned about the economy, health and wellness items remain high on their shopping list, although they may seek a savings, like that of a private label.

“The customers are looking for ways to make their money go further,” said John Fegan, vice president, pharmacy, Winn-Dixie Stores, Jacksonville, Fla. “They know that they still have to be well and they are looking at the costs of prescriptions, they are looking at the costs of food, and they are trying to get the best deal that they can.”

Talk of the “new frugality” has been overstated, according to Laurie Demeritt, president and chief operating officer, the Hartman Group, Bellevue, Wash. When it comes to day-to-day consumables, such as food, cleaning items and personal care products, “those are not places where consumers are making as many changes in their lives. Consumers are not leaving the health and wellness category because of what is going on with the economy.”

People are holding back on big purchases like automobiles, clothing and vacations, and may not eat out as much, but they are finding ways to stretch their health and wellness dollars, she said. “Maybe they buy some of their organic products at Wal-Mart instead of a natural food store. Maybe when they buy organics, they will buy the organic milk for sure, but decide that the organic snack food isn't quite as important,” she said.

“There's so much wrapped up in health and wellness that consumers don't want to have to pull back from it. We find it's very rare that consumers leave the health and wellness category after they've entered. We hear things like, ‘There's no way I'm going to give my kid non-organic milk because I'd be giving them growth hormones, and if that means I'm not going to buy myself a new dress this year for the holidays, so be it. While consumers are willing to pull back in other areas, health and wellness is the very last thing they want to pull back on and they are really trying to avoid it at all costs,” Demeritt said.

“Although recessions put stress on budgets and minds, smart people are using health, specifically preventative health, as a criterion for where they put their hard-earned dollars,” said Joe Friedman, a supermarket pharmacy consultant based in Lincolnshire, Ill., who is a former pharmacy executive with Nash Finch Co., Edina, Minn., and Topco Associates, Skokie, Ill. These people see health as an investment in their careers, their happiness and a good lifestyle, Friedman noted.

“Many health care products — from natural personal care items to tasty but healthy desserts — strike a chord with consumers looking for a guilt-free way to reward themselves and put a soothing balm on their stress-filled days,” he said.

In-store clinics and pharmacist consultations are other ways consumers are finding to save on health spending. “The underlying interest in health and wellness is still strong,” noted Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill.

For example, a customer might ask a pharmacist about what alternatives they might have to an expensive medication, leading to a discussion of store-brand OTC products. “People get very smart because they are forced to learn about ways to economize — ‘Is this product as good as that one? It costs less.’ People start experimenting and looking for solutions and when the economy turns around, they tend to not go back,” Wisner said.

“Health and wellness is going to continue to be a significant underlying theme. At least from a ‘noise’ standpoint, it's going to be drowned out by economic concerns, but it will continue to bubble under the surface and on the surface. It's something on an upward trend and the spike is going to be tamped down a little bit over the next year. But the underlying interest and underlying strength and underlying involvement on the part of the consumer isn't going to decline. It's just the rate of growth and the interest is just going to simply slow down a little bit while we're dealing with other issues,” he said.

“We are seeing retail clinics experience an uptick in business not only because of convenience, but from an out-of-pocket point of view. It's becoming the budgetary option of choice for customers,” said Bill Bishop, president of Willard Bishop, Barrington, Ill. Additionally, pharmacist consultations will become “the first line of health and wellness. That will be more affordable from the customer's standpoint, and move the pharmacist and the retail store into a more prominent position in individuals' overall health care,” he said.

“This is an opportunity for the supermarket business in general, and the general merchandise/HBC/pharmacy portion in particular. It is our opportunity to lose. It's staring us right in the face, so I challenge them on it,” he said.


Vitamins and supplements are seen as a readily identified and verifiable example of the current health and wellness trend. There have been assumptions that consumers are cutting back on vitamins and supplements, reevaluating products they've been taking for years, and shifting to private label, but the most recent numbers from the Nielsen Co., Schaumburg, Ill., do not bear this out. On the one hand, Nielsen finds private-label vitamins and supplements giving up a small amount of market share to branded products through the third quarter of last year. Meanwhile, the overall category is showing good growth numbers, according to Nielsen's Strategic Planner. Even though the growth is in single digits, this is remarkable because it is a mature category, and many other sectors are declining.

Year-end numbers — for the 52 weeks ending Dec. 27, 2008 — show the vitamin category up 5.3% to $1.5 billion in food stores. Drug stores rose 6.7% to $1.9 billion, while the combined food, drug and mass merchandiser stores (excluding Wal-Mart) went up 5.9% to $3.8 billion. In all three reports, the increases are the strongest for the category in three years.

Private-label vitamins are strongest in the drug channel, where they had 23% of the category vs. brands for the 52 weeks that ended Sept. 27, 2008, slipping 0.1% from the previous year; in the food channel private label was 15.9%, dropping 0.4%; and in food, drug and mass the store-branded vitamins and supplements were 20.2%, declining 0.3%.

Some of this may be attributed to the frequent buy-one, get-one-free promotions being run in all classes of trade. These are mostly on branded products, but also on private label, observers noted.

This is in the face of a continuing barrage of media stories on research showing the ineffectiveness and possible harm from various supplements and vitamins. So far, shoppers have continued to buy, but will this continue?

“We're at the point of a knowledge and trust issue,” said Chris Depetris, director of wellness programs, Global Market Development Center, Colorado Springs. “There is a lot of confusing information out there in the media, and I'm not so sure that the consumer is trusting.”

GMDC is undertaking a wellness and sustainability study with the Hartman Group that is designed, in part, to cut through this uncertainty. “There is a great deal of confusion. The consumer is confused in understanding from their knowledge standpoint. And obviously when the consumer is confused, the retailer doesn't know which path to take,” Depetris said.

“People latch onto health as something they can control,” Friedman said. “Market research has shown that sales of organic, natural or ‘whole food’ items were not declining, despite the economic downturn. This is because consumers did not perceive organic foods as luxury items, but instead as essentials. Purchasing healthy foods was a way of maintaining some feeling of control in their lives when everything else seemed out of control.”


This continuing interest, economic stress, and confusion creates an opportunity for the pharmacist to interact with the customers.

“We see people going back and checking to make sure they are taking the right supplements, but only the right supplements,” said Bishop. They want to review their regimen to determine which products to add, and which to add to round out their health. “So the role of the pharmacist is enhanced substantially in terms of building the right collection of supplements, and doing it in an affordable way,” he said.

“Health and wellness is not taking a backseat [during the recession], but retailers need to look at it through a different lens: the lens of affordability. There is an opportunity for the pharmacist to put the value angle into their consultations,” Bishop said.

With prescription sales down, it's important for pharmacists and their customers to know that there are alternatives available, Fegan pointed out. The discount generics programs are highly touted, but there are less publicized state-funded assistance programs available. “The states recognize that if they don't get involved in helping patients continue their treatments and their meds, they are going to have a big expense on their hands down the road when conditions that could be controlled today flare up,” he said.

“Pharmacists in a supermarket setting who will take time to counsel their consumers about living healthier lives through proper diet, exercise and medication compliance, and can offer healthy dietary products, are in a unique position to gain market share from their practice setting,” said Curtis Hartin, senior director of pharmacy, Bi-Lo, Greenville, S.C. “Working with grocery manufacturers and producers to promote healthy products is a great way to start the conversation toward building a loyal, rewarding pharmacy clientele.”

Health and wellness still seems to be top of mind to many Bi-Lo consumers “while value appears more important than ever,” he said.


Vitamins and supplements as a category are seen as an indicator of the strength of the health and wellness trend in the face of the recession. The following chart is from the “Total Vitamins” section, which includes supplements, of the Strategic Planner of the Nielsen Co., Schaumburg, Ill. It covers food stores $2 million and over.

52 WEEKS ENDING 12/29/06 52 WEEKS ENDING 12/29/07 52 WEEKS ENDING 12/27/08
Dollars $1.369 BILLION $1.413 BILLION $1.488 BILLION
% Change 2.2 3.2 5.3
SOURCE: Strategic Planner, the Nielsen Co.