Non Food Reviews
Category Review: Cough and Cold

Private Label Productive in Cough-Cold Category

December 7, 2012
Trans

Private label brands continue to hold a healthy share of the cough-cold category, ranging between 11 percent and 36 percent in various subcategories, although the fortunes of both private label and the category are a mixed picture.

“The category will continue to see private label growth,” declares Susana Breese, marketing manager for HealthSource Marketing, Buffalo, which handles sales for Reese Pharmaceuticals. “Consumers continue to look for ways to save money, and buying private label brands is one way they are doing this. Retailers are seeing this trend and expanding their private label programs.”

Mintel Group Ltd. of Chicago measured overall sales of its Cough and Throat Remedies category at $1.2 billion in 2011, up 4 percent since 2006 and up 3.5 percent just since 2010, according to a report released in May. The forecaster believes sales will increase 1.3 percent in 2012 and predicts another 7 percent increase, adjusted for inflation, by 2016.

“Forecasting cough and cold sales has been a continued challenge with the fluctuating market,” Breese says. “Last year, sales were down in the cough and cold category, and this year our sales are up 30 percent. In this ever-changing market, you need to make sure that your forecasts are as accurate as possible in order to keep your product flowing on the shelves.”

SUBCATEGORIES

The subcategory where private label holds its highest share of volume, according to data from Chicago-based SymphonyIRI Group, also is the one that experienced the highest percentage of growth for the year that ended Oct. 7: Cold, allergy and sinus tablets and packets saw overall sales rise 11.2 percent to $1.4 billion. Tablets and packets comprise 36.1 percent of the subcategory’s overall sales, up 2.2 percent from a year earlier.

Private label cold, allergy and sinus liquids and powders still held a healthy 30.3 percent share, although that’s down 2.3 percent from the year previous, with dollar sales flatlining at about $286 million, basically flat from a year earlier, SymphonyIRI reported. Mintel also measures liquid sore throat remedies, which accounted for $50 million in sales overall, and found they declined 24 percent since 2011.

Private label held 25.7 percent of the cough syrup subcategory (including sore throat liquids), up 0.4 percent, while dollar sales hit $121 million, up 3.2 percent, according to SymphonyIRI. Mintel found that cough syrup sales overall increased 6 percent to $495 million from 2010 to 2011, and up 16 percent since 2006. Syrups are the “go-to [over-the-counter] remedy” during more severe flu seasons, such as during the 2009 onset of the H1N1 virus, Mintel says. One-fifth of consumers (20 percent) use private label cough syrup, Mintel found, following Robitussin (57 percent) and Vicks (41 percent).

Reese Pharmaceuticals recently introduced TabTussin Cough Syrup Alternative, a Tussin formula in a tablet format, to compete against cough syrups, Breese says.

“Looking into the future, we are researching a number of natural and homeopathic products, to keep up with the growing trends,” she says.

Private label cough and sore throat drops were 14.7 percent of cough syrup sales, down 1.3 percent, while private label sales tumbled to $89 million, off 8.2 percent from the previous year, according to SymphonyIRI’s year-over-year figures. Mintel measured that subcategory at $654 million in sales overall in 2011, a figure driven by “convenience, palatability and affordability” as well as the ability of makers and marketers to “leverag[e] other usage opportunities” such as a complement to allergy medication.

About 15 percent of consumers prefer private label sore throat remedies, behind market leader Halls (58 percent), Mintel says.

Mintel stresses that the relative severity of flu season plays a major factor in the category’s overall fortunes, with sales up 3.6 percent in 2008 and 3.9 in 2009, both winters that showed high incidences of the flu, as measured by Google searches on the topic, Mintel says. Conversely, sales of cough and throat remedies dropped 4.8 in 2010, and Google searches fell from 139,394 to 73,160.

DEMOGRAPHICS

Given that children, women and seniors are more likely to contract flu and other illness, Mintel finds it relevant to track these populations. From 2011 to 2016, the overall population of children will grow 4.3 percent, slightly higher (4.5 percent) among those younger than 6 and (4.4 percent) those age 6 to 11. Targeting parents, particularly moms, will be key, and combination products with homeopathic or herbal ingredients will be especially well suited.

As for seniors, Mintel forecasts that the number of adults age 65 to 74 will grow 26.4 percent between 2011 and 2016, which will mean market growth for cough and cold remedies, except “growth will be mitigated by the fact that despite being more susceptible to coughs and sore throats, older consumers are less likely to use [over-the-counter] cough and sore threat remedies for treatment.”

Mintel believes the growing interest in home treatments such as eating soup, drinking tea, resting and taking vitamins should be considered as competition for
OTC products when not used in combination with them. Such brands should work to incorporate natural ingredients into their products to “counter potential market share erosion by alternative remedies,” Mintel says.

Reese Pharmaceuticals has tracked a significant increase in consumer demand for natural products, and major chains “are reacting to these demands with broader natural and homeopathic product offerings, especially in the pediatric cough and cold category,” Breese says. “Over the past few years, allopathic children’s medicines have come under close scrutiny from the FDA for some of the ingredients used. Some products even had to be pulled off the shelves for long periods of time. This gave an opportunity for natural and homeopathic products to be presented as safe alternatives and to gain recognition in the mainstream.”

CHANNELS

Drug stores account for 37.8 percent of market sales in the cough/throat category, according to Mintel, up 4.8 percent to $454 million in sales from 2010 to 2011, and up 13 percent since 2006. Mintel partly credits “the trend toward in-store clinics and the role of pharmacies in providing flu vaccines drive foot traffic in the drug store OTC remedy aisle, which in turn boosts cough and throat remedy sales.”

Sales in supermarkets only increased by 0.8 percent to $256 million from 2010 to 2011 and have fallen 4 percent since 2006, with no particular uptick during peak flu seasons, “which suggests supermarkets are not a top-of-mind OTC remedy destination,” Mintel says. And total sales in the mass, warehouse club and dollar categories – lumped together as “other” retailers by Mintel – grew 3.6 percent to $490 million from 2010 to 2011, up only 2 percent total since 2006.

The number of new product launches in the category fell from 270 to 101, down 63 percent, from 2006 to 2011, but Mintel’s figures show that 41 percent of consumers say they’re “overwhelmed” by the number of products available, so fewer new launches might be a positive. The drop off is mostly because of far fewer brand extensions and new formulations; the number of completely brand new products more or less remained steady during the five-year period.  

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