Retailer Features / Trend Features

A consumer gut check

March 29, 2012
Consumers are becoming more educated about solutions for gastrointestinal discomfort. Retailers are on the trend, contracting with private label manufacturers of constipation, diarrhea and fiber aids to increase their offerings of PL digestive aids.

Stress and fast-paced living are taking their tolls on American stomachs, and PL digestive aids are more in demand than ever because of it

Consumers are becoming more educated about solutions for gastrointestinal discomfort. Retailers are on the trend, contracting with private label manufacturers of constipation, diarrhea and fiber aids to increase their offerings of PL digestive aids.
“The digestive category has seen a tremendous growth in the last 12 months. We attribute it to a variety of reasons,” says Marty Friedman, national sales executive at Gericare Pharmaceuticals, Brooklyn, N.Y. Among the causes are fresh food price increases, longer life spans, new foods that have uncovered new gastrointestinal sensitivities, and changed eating habits that have reduced mealtimes from 15 to 30 minutes to 10 to 20 minutes.
“More retailers are adding selections of digestive aids to their private label solutions. This is driven by consumer demand,” confirms Sarav Patel, president of Marlex Pharmaceuticals Inc., New Castle, Del.
Private label accounts for nearly a third-31.8 percent-- of gastrointestinal tablet dollar share, and in the 52 weeks ending July 10, 2011, private label dollar sales were up 9 percent and unit sales up nearly percent compared with the same period a year ago.
Liquids and powders in the category did even better over the same time period, according to SymphonyIRI Group data. Commanding 28 percent of dollar sales, private label antacids, laxatives, anti-diarrheal and stomach remedies’ sales grew nearly 25 percent. Several branded products-diarrhea tablets, liquid antacids and all forms of stomach aids-dropped in sales over this period.
Private label digestive aids have built their reputation from generic with negative quality connotations to an alternative backed by the same focus on effective relief as the name brands, says Richard Mihalik, director of innovation and product development at National Enzyme Co., Forsyth, Mo. “People are becoming more and more accepting of private label, and the perception of quality has improved over the past 10 years,” he says. “Private label used to be associated with generics, but today, it’s just as good quality, if not better, than national brands.”
 “Americans are trying to eat healthier, but American diets suffer from lack of fresh foods,” says Marlex’s Patel. “Our culture of fast foods is absolutely a reason” that digestive aids is a growing category for private label.
“The standard American diet is much more processed than what our ancestors ate. We used to have stronger digestion when we ate things like fermented foods (raw sauerkraut, yogurt, kimchi) that were rich in probiotics,” says Christy Goldfeder, nutrition and wellness coach at Delicious Life Health Coaching, New York. “Fiber is also important, and we're not getting enough of it in the form of vegetables, fruits and whole cooked grains like brown rice, millet, quinoa, nuts and seeds.” 
As a compromise, Americans are using fiber supplements and laxatives rather than committing to a consistent inclusion of fresh foods in their diets, Patel says. Doctors recommend digestive aids to patients, “but the Internet is a wonderful resource” and can be given credit for much of the category’s growth.
In addition, prominent prescription-to-OTC switches “absolutely are making consumers more aware of products to help with their digestive discomfort. Brands switching to over-the-counter is a major catalyst for private label development,” says Patel.
As patents expire on prescription drugs, private label manufacturers are quick to develop OTC products.
“As a result of consumers’ increased awareness of the quality and comparability of private label products, we have looked to add line extensions,” says Don Mesite, vice president of sales and business development for Tower Laboratories Ltd., Centerbrook, Conn. “Our private label production has grown at a higher rate than the category, which of course means that we are gaining share vs. the national brands.”
Nature-based digestive aids including prebiotics, probiotics and enzymes are growing as well. In 2010, the U.S. market for these products was valued at $265.9 million. It is expected to grow to $495.3 million by 2015, according to MarketsandMarkets, a Dallas-based research firm, at a compound annual growth rate of 13.2 percent.
Prebiotics and probiotics are growing at double-digit rates with digestive enzymes experiencing slower growth. Branded and private label prebiotics and probiotics sales grew 35.6 percent in the 52 weeks ending Aug. 6, 2011, according to SPINSscan Conventional data from SPINS natural and specialty products consultancy, Schaumburg, Ill.
Marlex sees a growing trend in biotherapies for small and large intestine health. “There are also a lot of new prescription research and clinical trials coming out that help in the small intestine/large intestine/pancreas area,” says Patel. Marlex is considering moving into probiotic and prebiotic supplements.
Market recognition for probiotics has benefitted from Dannon’s marketing for its Activia yogurt, says Mihalik from National Enzyme. His company is trying to similarly raise consumer awareness for enzymes. It private labels its BioCore AR as an antacid and general digestive support.
“We’re seeing growth, but we’re not to the point where priobiotics are,” he says. “You can’t go into Walgreens and find a private label enzyme.” Wal-Mart, however, has its own probiotic-enzyme combination product.
National Enzyme’s private label business is growing among regional retail chains and multi-level marketing companies that have brick-and-mortar stores as well as e-commerce sales channels. It also has contracts with some chiropractors and doctors for their own private label brands.
Even with the anticipated growth of nature-based digestive remedies, there will always be a market for both natural and pharmaceutical products, Mihalik says. “I don’t think they’re necessarily competitive.”
People with severe digestive diseases will rely on traditional prescription solutions; others will use a combination of natural and pharmaceutical aids; and some will commit exclusively to enzymes and the like.
“Your basic consumer will stay with what worked for them in the past,” says Gericare’s Friedman. Gericare purchased a former Philips Milk Of Magnesia plant and produces private label liquid antacids there now in addition to caplet, softgel and tablet antacids, anti-flatulents, laxatives and anti-diarrheals. Clients include major chains CVS and Walmart.
“Our private label Metamucil will still be there. Our private label Colase products will be staples. Our glycerin suppositories will still be there,” Marlex’s Patel says, agreeing that traditional digestive aids have staying power.
Long-term, probioitics, prebiotics and enzymes can replace these staples in consumers who use them regularly.
“Once the digestive system can compensate and adjust itself, there will be a lesser need for constipation or anti-diarrheal products,” he says. “But they are the first line of defense.”

Eye on the national brands

In March, the U.S. Food and Drug Administration filed a permanent injunction against McNeil-PPC for failing to comply with required manufacturing practices. McNeil, a subsidiary of Johnson & Johnson, cannot manufacture or distribute drugs from its Fort Washington, Pa., facility until the FDA determines that its operations are compliant with the law. The FDA also gave McNeil a strict timetable for bringing facilities in Las Piedras, Puerto Rico, and Lancaster, Pa., into compliance.
The injunction followed nearly a year of approximately 30 product recalls, including Rolaids antacids. McNeil’s woes are helping private label sales.
“We have seen a double-digit growth in these categories,” says Marty Friedman, national sales executive at Gericare Pharmaceuticals, Brooklyn, N.Y. “After the McNeil problems, PL manufacturers have gained respect at the expense of the brand.”

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