Cultivating the C-store HBC Habit

The convenience channel can build on recent momentum with a heightened focus

By Renée M. Covino

HEALTH AND BEAUTY CARE (HBC) has newfound respect in the convenience channel. Once overlooked, the category has garnered more attention since the onset of the COVID-19 pandemic, which has led consumers to look at c-stores differently.

“When c-stores were deemed as essential businesses during the pandemic, they were often some of the only places for consumers to turn to meet their everyday needs,” said Michelle Ridder, director of category management for Lil’ Drug Store Products Inc., based in Cedar Rapids, Iowa. “Now that consumers know [health and beauty care] can be found in c-stores, we believe some will keep this habit.”

The initial hook was need-based products, according to Katherine Policelli, business analyst with Cadent Consulting Group, based in Wilton, Conn. Consumers who have a need and require an immediate solution, such as an OTC medication, skin care product or shampoo, are the logical target for c-store HBC, she told Convenience Store News. “These products offer the best opportunity to increase category margin for c-stores.”

Last year, average sales per store of HBC were up 4.2 percent, compared to 1.3 percent category growth in 2019, according to the latest Convenience Store News Industry Report. The HBC segments with the largest sales growth included grooming aids, vitamins/supplements, and cough/cold remedies.

But that only tells part of the story, especially now that convenience retailers have embraced more widespread HBC category trends. And industry experts have ideas for how they can build on the recent momentum and keep the sales growth going.

Performers With Staying Power

HBC items with staying power include both core and non-traditional segments.

First off, there’s been an “increased reliance on the basic, core HBC items,” according to Policelli. Cadent Consulting gives high marks to key areas

such as analgesics, lip balm, antacids, cough/cold medications, and family planning, she noted.

“Some of these are just an impulse purchase/basket builder, such as lip balm, and some can be very price-competitive, such as family planning items, but still offer a significant margin trade-up,” the analyst explained.

Throughout much of last year, personal protective equipment (PPE) products, such as masks and hand sanitizer, accounted for approximately 30 percent of HBC dollar sales “and kept HBC dollar and unit trends in the black,” according to Ridder.

“As we anniversary PPE sales in 2021, masks and sanitizers have created a major headwind for HBC. Premium placement on an endcap or front counter, specialty displays, promotions, signage and media attention helped to make c-store consumers aware these types of products were initially available,” she said. “Awareness of these items should continue through signage, promotions, loyalty and placement.”

Ridder also noted that allergy-related sales continue to see double-digit growth as consumers “are more proactively treating allergy symptoms to avoid the stigma of coughing or sneezing in public during the pandemic.”

In the vitamins and supplements segment, Mason Vitamins has benefitted from a “great convenience-store relationship in Hawaii,” according to Chuck Tacl, senior vice president of sales for the Miami Lakes, Fla.-based company. The desire for more SKUs in that partnership evolved into the company’s Wellness to Go supplement program.

Tacl pointed to several segments that are evolving post-COVID: Immunity, Calm (Relax/Sleep), Digestive Support, and Hair & Nails.

“Hair supplements are usually associated with female consumers; however, there are huge opportunities now with men’s grooming/beard grooming, too,” he said.

For product placement, he says “counter and pegging next to the energy products can be sufficient,” but creating a wellness destination center is most effective. At the very least, “the word ‘wellness’ needs to be relevant in planogramming,” he stressed.

Multipacks and larger volume products recently became a go-to in HBC and across the center store. “The consumer’s heightened awareness of value points to this trend continuing,” notes Jim Beghtol, senior category manager for Lil’ Drug Store Products.

As far as in-store placement goes, Beghtol believes HBC belongs in a centralized location, but also in secondary locations that feature consumer values and new-item launches. “This will continue to drive category awareness and profits,” he said. Tacl echoes the trend of larger pack sizes and advises that in the vitamins segment, larger-count packages of 18 to 30 capsules should be available to transition the packet consumer into a permanent supplement consumer.

Don Stuart, managing director at Cadent Consulting, also views CBD as an important HBC category trend that c-stores should pay attention to, particularly in the areas of infused drinks, food and balms.

The entire CBD category faced unexpected challenges in the convenience channel in 2020 thanks to pandemic

The Best Care for the HBC Category

Industry experts offer their top ideas for c-stores to garner more HBC sales

• Increase awareness. Let consumers know HBC is “in the house” through signage, promotions, loyalty and placement. Understand and convey a heightened interest in health, driven by the pandemic.

• Be well-rounded. Carry the best-selling HBC SKUs in immediate consumption sizes, and allow customers to trade up to larger-size SKUs to increase market basket.

Offer private label SKUs where it makes sense.

• Manage the category. Assign an HBC category manager at the retail level to work with supplier category managers to ensure the best products are included in sets. Utilize vendors for category insights.

• Sprinkle in relevant terminology. Create a wellness destination section, planogram or endcap in the store.

Use loyalty programs to bolster “Wellness” and

“Better-for-You” offers.

• Manage the message. Category messaging in-store, on social media, at the pump, etc., should be simple and educational without making any health claims.

• Embrace the new normal. Yes, there’s been increased reliance on basic, core HBC items, such as analgesics, antacids, cough/cold, and lip balm. But there’s also a greater understanding now that some HBC “fads” are proving to be modern solutions to classic problems.

Offer both sides of the spectrum.

The Latest Buzz Around HBC

A rundown of today’s most influential trends in health and beauty care

Category experts say these trends and product attributes should be on the radar of convenience store retailers if they’re serious about boosting HBC sales:

• Personal protective equipment (PPE) • Immune health • Long-term wellness • Self-care & home self-care • Relaxation aids • Digestive support • Family planning • At-home test kits • Localized beauty care • CBD-infused tinctures & balms • Essential oils • OTC basics • Sun care as skin care • Better-for-you • Educational content/tutorials/demonstrations

disruptions, but that is predicted to change soon. One industry expert recently pegged 2022 as “the year of growth for the CBD category.”

The way Stuart sees it, CBD category growth will “ultimately be heavily dependent on FDA approval of the supplement and perceived efficacy.” are learning to portray a more reputable image in OTC medications and other health-related items.

This can be helped along by stocking both a leading brand in each segment and a private label offering, according to Cadent Consulting’s Policelli. This approach offers a range of quality and value, covering the spectrum for most health-oriented categories, she said, adding that this “one plus one” strategy is especially important in more rural environments where c-stores often become the local one-stop shop.

Lil’ Drug Store Products’ Ridder agrees that c-stores should offer the best-selling HBC items in a variety of sizes and prices, as well as private label where it makes sense.

She also pointed out that with COVID-19 variants very much a concern these days, maintaining in-store pandemic safety precautions and touting them to customers is another way c-stores can better compete with the drugstore channel.

In terms of marketing, social media is proving to be a growing part of the evolving HBC equation. “The pandemic made retailers find new ways to connect with consumers to inform, educate and award shoppers,” said Ridder. Some of these new connection points include mobile apps, curbside options, delivery capabilities, and loyalty programs — all enhanced through the use of social media.

“Recommendations and word of mouth are still the most effective way to encourage trial, but we also believe bolstering loyalty programs and leveraging apps and messaging can accelerate the health positioning and private label HBC presence in c-stores,” said Stuart.

Convenience stores have the opportunity to make brand impressions to local audiences through personalized promotions and materials that are hyper-relevant to each community, offered Eli Chapman, chief marketing officer for creative automation technology company Celtra. He explained to CSNews that this might take shape as social media postings that reference the county fair and are tied to selling more sunscreen.

Recent Celtra data found that localization is key to sustaining loyalty with beauty care shoppers. More specifically, roughly half of beauty care shoppers (51 percent) indicated that they have a stronger sense of loyalty to beauty brands/retailers that localize creative content to a region, community, and/or current events.

Moving forward, Beghtol of Lil’ Drug Store Products encourages c-stores to embrace “the new normal” and expect many of the new habits created during the pandemic to stay post-crisis. He offered some examples of HBC items that are already demonstrating staying power: Orajel, pregnancy test kits, and personal care items.

“Despite experiencing pandemic-related growth in 2020, these items have continued to show dollar and unit growth in 2021,” he said.

The key point to remember is that c-store consumers have become a captive HBC audience — and they’re not likely to retreat if retailers keep up the momentum. CSN

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