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PL analgesics grow by double digits as national brands struggle through recalls, lost consumer trust
“Innovation on the branded side drives growth and catching up by private label,” explains Cadey O’Leary, vice president of market and business development at Concept Laboratories Inc., Chicago.
Perrigo introduced naproxen softgels in the past 12 months, a follow-up to Aleve liquid gels, introduced in 2007., for example. But this isn’t to say that private label pain relievers aren’t competitive or successful.
Total private label internal (vs. external, topical) pain remedies were up 18.5 percent in sales in the 52 weeks ending Aug. 7, according to Chicago-based SymphonyIRI data. Over the same time period, branded internal analgesics dropped in sales – nearly 7 percent in liquids alone. The uptick in sales for private label liquids was an incredible 56.6 percent.
“The absence of brand products in the market is certainly a major factor, as is the tough economy,” says Lisa C. Buono, director of OTC for Actavis Inc., Morristown, N.J., referring to several recalls of Johnson & Johnson’s Tylenol products between 2008 and summer 2011.
Store brand internal analgesics sales are up more than 14 percent this year for Perrigo, Allegan, Mich. “The store brand sales increases are not just due to Tylenol as nearly every [internal analgesic] segment is growing sales for store brands,” says Art Shannon, vice president of investor relations and communications. “This is a continuation of consumers growing acceptance of store brands.”
Private label manufacturers and industry consultants expect Tylenol products’ full return to the market and an end to bothersome recalls for the foreseeable future. But even when they do, most consumers will stick with store brands, experts predict.
“Having now had the opportunity to use our products and found them to be as safe and effective as the brands, but at a significantly lower price, I believe many will continue to purchase them,” says Buono. “Why spend more for the identical product if you don’t have to?”
“Our OTC ibuprofen production has increased tremendously since the middle of 2010, and we’re very encouraged for the long-term prospects now that parents have had the opportunity to use the high-quality, high-value products that we offer,” she says.
Not only is Actavis optimistic that consumer conversion to private label is lasting, retailers are clamoring to build product lines and loyalty.
“The brand OTC analgesic recalls opened up a lot of shelf space for those products and increased the visibility of their private labels,” says Buono. “It makes sense to me, from a strategic standpoint, to want to capitalize on that by adding to the product mix.”
Private label and direct response contracts continue to grow for Concept Labs, too. Its external analgesics answer niche needs – for foot or nerve pain relief associated with fungal infections or poison ivy or rosacea respectively.
Concept Labs is particularly interested in topical pain remedies that blend traditional and natural bases, says O’Leary.
“Those with a dermatitis condition or who suffer from pain are going to use something that rids them of pain,” she says. “Consumers are not primarily shopping the natural channel for pain relief. When you’re in pain, you’re going to turn to proven products that work.”
But in trying to differentiate its products, Concept Labs has listened to consumers who are sensitive to synthetic emulsifiers, for instance. The company is working with gentler and natural emulsifiers – or formulas with no emulsifiers at all – to eliminate pain and the side effects that have come with that relief when delivered through traditional ointments, salves, powders and creams.
“The natural products channel is impacting and influencing mass markets in that more natural brands are making the leap to mass market, and you’re going to see traditional market manufacturers spending more attention on natural ingredients,” O’Leary predicts.
Perrigo has seized upon consumers’ (especially parents’) disenchantment with high fructose corn syrup and chemical dyes. It promotes gluten-free, high-fructose corn syrup-free, dye-free children’s liquid analgesics.
And most private label manufacturers are working hard to bring new liquid dose delivery to market to help parents ensure they give children only the recommended amount of medicine.
New dosage recommendations and delivery systems – bottles with dose dispensers built in -- mean only one formula needs to be marketed for infants and older children. The packaging also prevents accidental overdoses.
“Actavis is fast at work to launch new children’s and infants’ acetaminophen liquids with flow-restrictor bottles in sync with the move of the entire industry to this packaging format,” says Buono.
Concept Labs has developed new packages-cum-delivery system s as well, in brush and twist pens. “We are constantly looking for unique ways to deliver,” O’Leary says of innovation that is internally driven, not driven by national brands.
Eye on the national brands
As recently as August 2011, products were pulled from wholesalers upon McNeil’s orders. More damning to the brand, however, were recalls of products already in consumers’ homes.
“National brand recalls have kicked the door down for private brands,” says Christopher Durham, a private brand professional and blogger at MYP Brand.com, based in Charlotte, N.C., and a member of PLBuyer’s editorial board. “I don't see moms going back anytime soon.”
Gone still from store shelves in late October are the company’s over-the-counter medicines for infants and children, including liquid Tylenol and Motrin.
“Private brands [have] capitalized on this brand misstep by being at shelf when the trusted national brand was absent,” says Durham. “Many moms have now learned that the private brand products meet their needs and solve their family medical problems. Ultimately private brands now have an opportunity to become a part of her and her family’s daily lives.”