DSN - 0220 by ensembleiq

FEBRUARY 2020

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FEBRUARY 2020

Generics companies expand their scope P. 54

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NEW WORLDS How retailers are leveraging their store footprints to fuel omnichannel efforts

It’s not just the depth of our pipeline, It’s the quality and value it delivers

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Vol. 42 No. 2 DrugStoreNews.com

FEATURES 10 Industry News 22 Industry Issues Summit Executive panelists discussed how to support and grow pharmacy services

34 CBD News 38 Focus On: Nordic Naturals 40 Products to Watch 42 What’s New: Greeting Cards Leading companies bring the human touch to keep an analog category hot in a digital age

46 Cover Story: Brave New Worlds How retailers are leveraging their store footprints to fuel their omnichannel efforts

68 Selfcare Roadmap Insights Insights into how sleep consumers shop, powered by GMDC | Retail Tomorrow’s and HRG’s Selfcare Roadmap tool

76 Retail Excellence Awards 2020: Private Label Showcasing standouts among private-label product makers

46 COLUMNS 8 Editor’s Note 28 Counter Talk with Daymon’s Nicole Peranick

30 Counter Talk with industry consultant Bruce Kneeland

32 Counter Talk with Updox’s Cathy Kuhn

82 Last Word with David Orgel Consulting’s David Orgel

PHARMACY 54 Getting Creative in Generics Generics manufacturers look to diversify their offerings beyond pills to drive innovation and improve margins

62 News

HEALTH 64 Expanding Feminine Hygiene Suppliers bring new, naturalfocused offerings to the space

70 News

SOCIAL Facebook.com/ DrugStoreNews

INSIDE BEAUTY 72 Under the Influence

Can influencer marketing’s value proposition endure?

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DSN (ISSN 0191-7587) is published monthly 12 times a year by EnsembleIQ, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription rates: Manufacturers, schools, libraries and all others allied to the field $119. Canadian subscribers $129. Foreign subscribers $225. Periodicals postage paid at Chicago, IL, and additional mailing offices. POSTMASTER: Please send address changes to DSN, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Canada Post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. For change of address, six weeks notice to Drug Store News, P.O. Box 3200, Northbrook, IL 60065-3200 is requested. Give old and new address and zip code. If possible, enclose address portion from cover on previous issue. Subscription changes also may be emailed to drugstorenews@omeda.com, or call 847-564-1468. Vol. 42, No. 2, February 2020. Copyright © 2020 by EnsembleIQ. All rights reserved.

February 2020 DRUGSTORENEWS.COM

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EDITOR’S NOTE

Ignoring the Signs Pier 1 Imports’ latest problems stand as a warning to retailers that can’t keep pace with retail’s changing face By Seth Mendelson

oy, haven’t we heard this story before — and perhaps way too much? Pier 1 Imports, the home goods chain, announced in early January that it was closing more than half of its estimated 950 stores across the country. A new approach — the chain’s leadership said it was a realignment within the current operating environment — was needed. Gee, what took these guys so long to figure that out? Like a number of other retailers that are struggling — Seth Mendelson Editor in Chief/ Bed, Bath & Beyond and Macy’s are two of my favorites Associate Publisher — Pier 1 executives seemed to have ignored many of the glaring warning signs that have been around for much of the last decade. Now, suddenly, these guys think they can play catch up by closing half of their existing storefronts and hope that consumers quickly will take their sales to the company’s online site. I say not a chance. These execs should visit the Amazon, Walmart and Target sites and see what they are missing, and realize just how far behind they are. Unfortunately, I could probably write this story every month in this space. All l would have to do is fill in the blank for the retailer of the month that is announcing, despite warnings from virtually every angle, that they failed to get ahead of the curve. Perhaps as never before, retailers need to understand that staying ahead of consumer shopping trends — whether traditional or digital — is the secret to surviving in this age of hyper-intense competition. Pier 1 executives had to see the signs as far back as 2015 when its high-flying stock price was around $300 per share. Today, the price of a single share of Pier 1 Imports stock resides around $4, and that might be too high for the value of this company. In fact, some industry gurus said the chain may file for Chapter 11 bankruptcy protection in the coming days. Time actually is the enemy of these struggling chains. The bottom line is that it is running out on them, and without dramatic changes to the entire merchandising strategy, it is doubtful that many of these operations will be able to stick around very long. As many a consultant has said, “Retail is not dead, bad retail is dead.” The key is to make sure that your chain is not one of the bad retailers on the block, and is one of those merchants who understands that winning at retail takes a lot more than putting products on store shelves at reasonable price points and opening the doors at 10 a.m. dsn

Perhaps as never before, retailers need to understand that staying ahead of consumer shopping trends is the secret to surviving in this age of hyperintense competition.

February 2020 DRUGSTORENEWS.COM

An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Senior Vice President, Publisher John Kenlon (516) 650-2064, jkenlon@ensembleiq.com Editor in Chief /Associate Publisher Seth Mendelson (212) 756-5160, smendelson@ensembleiq.com EDITORIAL Managing Editor David Salazar (212) 756-5114, dsalazar@ensembleiq.com Senior Editor Sandra Levy (845) 893-9573, slevy@ensembleiq.com Desk Editor Maria Manliclic (212) 756-5093, mmanliclic@ensembleiq.com Online Editor Gisselle Gaitan (212) 756-5138, ggaitan@ensembleiq.com SALES & BUSINESS Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Production Manager Jackie Batson (224) 632-8183, jbatson@ensembleiq.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production Derek Estey (877) 687-7321 x 1004, destey@ensembleiq.com Creative Director Colette Magliaro cmagliaro@ensembleiq.com CUSTOMER SERVICE Having a problem with your subscription? Send us full details with the mailing label of the last copy you received, along with your telephone number. Write to: Circulation Fulfillment Director, Drug Store News, P.O. Box 3200 Northbrook, IL 60065-3200; email drugstorenews@omeda.com; or call (847) 564-1468 CIRCULATION LIST MANAGER Elizabeth Jackson MeritDirect (847) 492-1350 x 318. REPRINTS PARS International, LF-Reprints@parsintl.com, (212) 221-9595 x435, tinyurl.com/LF-reprints. Single copy price is $20 for a regular issue and $100 for a statistical issue. PERMISSIONS For permission to reuse material from Drug Store News/DSN (ISSN 0191-7587) please access www.copyright.com or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, (978) 646-2600, (855) 239-3415. CCC is a not-for-profit organization that provides licenses and registration for a variety of uses.

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INDUSTRY NEWS

Vizuri Unveils New Item

Sunstar Debuts GUM Hydral Dry Mouth Relief Oral care company Sunstar America is launching a line of dry mouth-focused products under its GUM brand. The Chicago-based company is set to debut the GUM Hydral Dry Mouth Relief line, which features advanced moisturizing and hydrating ingredients meant to work like natural saliva. The GUM Hydral line contains hyaluronic acid, betaine and taurine to help maintain hydration and electrolyte balance, as well as polyvinylpyrrolidone, a lubricant that forms a protective film over the mouth’s mucosa. The line includes an oral rinse, oral spray, oral gel for nighttime relief, and anticavity toothpaste, with each product designed with a low-irritation formula and without sodium lauryl sulfate, alcohol, or milk or egg derivatives. “We know that xerostomia, or dry mouth, affects as much as 30% of the population and can be extremely painful and often debilitating, yet a high percentage of patients are either not receiving help or are dissatisfied with their current treatment,” said Angel Gonzalez, Sunstar America’s vice president of research and development. “GUM Hydral advances OTC dry mouth care with innovation that mimics the multifaceted, biological role of the body’s natural saliva, providing a new level of deep moisturizing that starts fast to relieve a range of dry mouth symptoms. Given the high degree of satisfaction we saw after actual use by dry mouth sufferers, we are confident that GUM Hydral can make a real difference in the quality of life for many patients.” The company said the GUM Hydral line will be available through retailers in early March.

February 2020 DRUGSTORENEWS.COM

Bonita Springs, Fla.-based Vizuri is introducing Pain Bloc flexi-stretch pain tape, a product that company officials said features a fabric that moves and flexes with the body and contains 4% lidocaine. The product, which is designed to provide numbing pain relief and can be used for up to 12 hours, will start shipping in June and has a su ggested retail price of $14.99. The item will join two other products in the Pain Bloc line: a roll-on arthritis pain relief item and an arthritis-relief pain pen, each with suggested retail price points of $10.99. “Our products are designed to provide serious pain relief for the chronic pain sufferer,” said Elise Donahue, CEO of Vizuri. “These items are convenient for travel, they never leak and fill a space for consumers since there is nothing else out there like them. They give 24-hour pain relief and are so efficacious that if used for a week, they provide relief that can last up to a month.”

Revlon Focuses on Clean, Vegan Color Revlon is getting into the clean and vegan hair color game. The beauty brand has unveiled its Total Color collection, which is infused with nourishing oils and botanicals, and is free of such traditional hair color ingredients as ammonia, parabens, sulfates, silicones, mineral oil, phthalates and gluten. Total Color delivers full coverage, healthy shine and up to six weeks of color vibrancy with a formula that is gentle on hair, the company said. “Revlon Total Color represents a significant milestone in clean beauty with real innovation in the hair color category,” Silvia Galfo, Revlon global brand president, said. “Clean beauty has primarily been about makeup and skin care, but now consumers have a choice in at-home color without having to compromise product performance.” Each box of color contains a cream colorant and developer formula, as well as a post-color, multiuse botanical enriched conditioning gloss infused with camellia oil and botanical extracts that have been selected by shade family — chamomile for blondes, cranberry for reds, sesame for brunettes and black tea for dark brown/black. Revlon Total Color is available in 16 shades for the suggested retail price of $7.99 at drug and mass retailers nationwide.

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INDUSTRY NEWS

P&G Brings Waterl<ss Brand to U.S. Consumers Procter & Gamble is introducing a South African hair care brand to the United States. The brand, Waterl<ss, was created to cater to the different hair care needs of women on their non-wash days. Developed and launched in Cape Town, South Africa, Waterl<ss was created in response to the local water crisis. The World Wildlife Fund notes that only 3% of the world’s water is freshwater, and by 2025, two-thirds of the world may face water shortages. “At P&G Beauty, our goal is to be both a force for good and a force for growth. We wanted to put this product up to the ultimate torture test to ensure the broadest range of needs were being met on non-wash days,” Ilaria Resta, vice president of North America

Hair Care, said. “This is the intent behind the Waterl<ss brand: Whether she has to or wants to use less water, or is just on the go and needs a quick refresh, we are committed to providing every woman with products that work for her unique hair care needs.” Waterl<ss offers products that span four benefit spaces that impact a non-wash day, including clean, condition, style and fragrance. Offerings include dry shampoo, dry shampoo foam, weightless dry conditioner, instant moisture dry conditioner, hair balm, curl milk, heat shield and a hair refresher. Waterl<ss products are available in store and online from Target, Walmart, Sally Beauty and Amazon, as well as other food and drug stores.

Magnum Adds Ruby Chocolate Bars Magnum is bringing the newest variety of chocolate to its ice cream bar lineup. The Englewood Cliffs, N.J.-based Unilever brand has launched Magnum Ruby Minis, featuring ruby chocolate, which contains ruby cacao with ice cream. “As the chocolatiers of ice cream, we’re uniquely positioned to launch the first ice cream featuring this new chocolate variant, ruby,” Leslie Miller, director of marketing of ice cream North America, said. “We’re excited to give Magnum ice cream fans another decadent ice cream and cacao pairing, creating the ultimate indulgence moment.” Ruby cacao, which features a berry fruitiness and distinct pink color, is sourced and grown in such countries as Brazil, Ecuador and the Ivory Coast. Initially available in packs of six bars at select retailers, Magnum Ruby Minis hit grocery stores nationwide at the suggested retail price of $4.99 in February.

February 2020 DRUGSTORENEWS.COM

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INDUSTRY NEWS

SlimFast Expands Keto-Focused Line

Rae Wellness Makes Brick-and-Mortar Debut Women-focused supplement brand Rae Wellness is making its first foray into the brick-and-mortar space. The New York-based company, previously a direct-to-consumer brand, is making its physical retail debut exclusively at Target through a partnership with the retailer. “We’re thrilled with the exciting response Rae Wellness has received from our direct-to-consumer channels, and we fundamentally believe in providing high-quality products without the high price tag,” said CEO and co-founder Angie Tebbe. “As a next step for our business, we are proud to be launching Rae Wellness at Target, a retailer that’s established itself for identifying the most innovative direct-to-consumer brands and bringing them to the masses.” Rae, which is focused on reducing the impact of daily stress and enhancing women’s personal wellness journeys, is bringing the following 11 SKUs to Target’s beauty aisle: l Beauty capsules; l Complexion capsules; l Daily Cleanse capsules; l DeStress capsules; l Hydration Drops; l Metabolism drops; l Pre + Probiotic capsules; l Sleep capsules; l Vegan Collagen Capsules; l Vegan Collagen Powder, honey citrus; and l Vegan Collagen Powder, unflavored. Core ingredients in Rae’s products include ingestible hyaluronic acid, biotin to promote healthy skin and hair growth, vitamins C and E, licorice root and aloe vera to promote collagen production.

February 2020 DRUGSTORENEWS.COM

SlimFast Keto is getting a big brand extension. Palm Beach Gardens, Fla.-based SlimFast launched the line in October 2018 and now is expanding the lineup to include 21 products that span meal replacement shakes, meal replacement bars, snacks and shake mixes designed for consumers following a keto diet. Since its launch, the line has become the best-selling line of keto products in the country, SlimFast said. New products include: l Meal Shakes To-Go, ready-to-drink meal replacement shakes with macros optimized for ketogenic nutrition, which will be available in milk chocolate, vanilla cream and mocha latte flavors; ● Five new keto snacks join the previously launched peanut butter cup and include caramel nut clusters, caramel cup and mint cup, as well as Fat Bomb Shots in two flavors — salted caramel crème and tangy orange crème; ● Three new meal replacement bar flavors — chocolate chip cookie dough, salted caramel macadamia nut and nutty caramel nougat; ● A new creamy coffee cappuccino flavor of meal replacement shake mix, which contains as much caffeine as a cup of coffee; and ● Ultra Hydration powder, a unique electrolyte blend that contains B-complex vitamins. All of the products are formulated to conform with principles of ketogenic nutrition, the company said, with a focus on being high in fat, low in carbs and moderate in protein, which shifts the body’s primary fuel source from carbs to fat. SlimFast Keto products now are available at Walmart, Publix, Kroger, Ahold Delhaize, Wakefern Food, Hy-Vee and Meijer stores, as well as online at Amazon.com.

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INDUSTRY NEWS

Degree Rolls Out New Advanced Protection Dry Sprays

Eosera Gains Wholesale Partners Ear care brand Eosera is set to reach a lot more consumers via some new wholesale partners. An Eosera spokesperson told Drug Store News that the Fort Worth, Texas-based company now is a vendor for both Cardinal Health and McKesson. “This will allow us to expand our products into their vast networks of independent pharmacies,” the spokesperson said. The expanded distribution follows a big year for Eosera. In 2019, the company developed three new products, and executives said that in the past year it has doubled its sales from the year before, and that they are aiming to double sales again in 2020. The company also has plans to expand its distribution from the current 13,000 drug retailers through which its products currently are available. CEO Elyse Dickerson said the company’s focus on innovation has helped set it apart and breathe new life into the ear care category. “It’s understanding what the consumer needs are and figuring out how to address them in a way that’s different from what the competitors are doing,” Dickerson said. Among the products in Eosera’s lineup is its flagship Earwax MD offerings, Ear Clean MD, Ear Pain MD, Ear Pain MD for Kids, and a daytime and nighttime Ear Itch MD product.

February 2020 DRUGSTORENEWS.COM

Degree is looking to help both men and women get the sweat protection they need by unveiling its new Advanced Protection Dry Sprays, which deliver 72-hour protection and go on dry for a cleaner feel, the company said. Featured antiperspirants for men in the collection include: ● Victory with notes of juniper and vanilla; ● Power with hints of cedarwood and bergamot; and ● Hero with a blend of citrus and spice. Scents available for women include: ● Passion with notes of vanilla and pear; ● Confidence with a blend of jasmine and apple; and ● Power with hints of freesia and water lily. Degree’s Advanced Protection Dry Sprays will launch at food, drug and mass retailers for the suggested retail price of $5.99 in February.

Micro Labs, Saptalis Ink Generics Deal, Launch First Product

A new generics partnership is bringing oral liquid and topical products to the market. Micro Labs USA and Saptalis Pharmaceuticals have formed a strategic collaboration to launch single-source and multisource generics in the United States, as well as launch the first product of their partnership, a generic of Clobex topical solution (clobetasol 0.05%). “Micro Labs is excited to collaborate with Saptalis as we look to expand our product line across multiple dosage forms,” said Ashok Jain, director of Micro Labs USA. “Our first launch with Saptalis, clobetasol topical solution, is widely used for the treatment of psoriasis and dermatitis. It is our aim to make this product available at affordable pricing to patients in need of the same. This medication reinforces our ultimate goal to bring high quality, affordable drugs that are needed in the U.S. market.” The companies said the generic would address inconsistent availability of the product, and that they planned to launch additional products with a total market size of $200 million, per IQVIA data, in the second and third quarters of 2020. “Saptalis and Micro Labs have been working together on multiple product development and commercialization projects,” said Saptalis president and CEO Polireddy Dondeti. “We are proud to be associated with Micro Labs, and we truly value the rich experience and understanding of the U.S. healthcare sector they bring to the partnership.”

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INDUSTRY NEWS

Unilever, Sundial Brands Launch Emerge for Natural Hair Unilever and Sundial Brands are looking to cater to the hair care needs of Gen Z’s multicultural women with their latest line. The companies have debuted Emerge, a six-piece line of textured hair care products that are available exclusively at Target. Emerge’s moisture-rich products are designed to help add curl definition and reduce frizz for 48 hours, using such ingredients as pequi oil and almond milk. The line also is free of sulfates, parabens, phthalates, silicones, mineral oil, petrolatum and dyes, the company said. “Gen Z women want to style their hair boldly and change up their look often without worrying about frizz or flyaways. Our formulas allow them to style their hair as creatively as they would like without the added stress, whether they are hitting the stage or the classroom,” said Nicola Chung, Sundial Brands’ senior director of innovation and Emerge lead. “Powered by nature and inspired by our consumers, Emerge has found an amazing partner in Target, especially with its growing wellness and multicultural verticals.” To spread awareness of its product range and purpose, Sundial Brands assembled the Emerge Creative Collective, or ECC, which

is comprised of influential young women of color with diverse hair types, styles and creative passions. The ECC roster currently includes professional ballet dancer Erica Lall; LGBTQIA activist Jessica Zyrie; singer, songwriter and bassist Tonina Saputo; professional photographer Nesrin Danan; nail artist and natural hair vlogger Blake Ja’el; vintage fashion entrepreneur Veronica Bonilla; and celebrity hairstylist Nai’vasha. Each product in the line carries a suggested retail price of $6.99.

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February 2020 DRUGSTORENEWS.COM

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INDUSTRY NEWS

Australian Gold Revamps its Look, Product Formulations

Newell’s Sunbeam Offers Heated Relief Newell Brands is introducing the Sunbeam ConformHeat heating pad, a device that company officials said is designed to contour to any pain point to provide even, high level heat for effective pain relief. They note that the design will eliminate stiffness, thus improving the contact between body and pad. The features of the product, which has a suggested retail price of $44.99, include a lightly weighted layer to blanket curved body parts with therapeutic heat and to keep the pad in place as well as three heat settings, a two-hour auto-off feature and technology that allows the user to feel the heat within 30 seconds. The pad also features a small, compact controller design, a 9-ft. long cord and the pad is machine-washable for easy care.

February 2020 DRUGSTORENEWS.COM

Australian Gold has a new look, but that is not the only change the sun care brand is making. The Indianapolis, Ind.-based company is filling its new packaging with new formulations for its Classic line, as well as some additions to other collections. Part of the brand’s reformulation and new products is the elimination of oxybenzone and octinoxate, which research said have had a negative impact on coral reefs and are becoming banned in many coastal cities and states. Australian Gold also is launching a Sport Collection with ingredients that cater to all active lifestyles and extensions, as well as Botanical Tinted Face Mineral Lotions that match a variety of skin tones and undertones, which are hypoallergenic and contain dermatologist-tested formulations, the company said. “With the increase of scientific studies and the rise of social and environmental awareness, we saw an opportunity a few years ago to take action and began the process of reformulating our Classic line,” Kristen Steinbrook, associate director of research and development at Australian Gold, said. “Since the conception of our new reformulation and the priority of minimizing the chemical activities utilized, Australian Gold has made huge steps forward towards expanding existing products and launching innovative collections, such as the Sport Ultra Chill and the new Botanical Tinted Face Mineral Lotions shades.” As part of its packaging revamp, Australian Gold has maintained its koala logo, the dark brown label and use of gold accents, while also adopting a sleeker look, the company said. “The skin and sun care categories are rapidly changing and our team proactively develops products that provide a superior experience and benefit to our consumers, all while keeping the planet and our ecosystem in mind,” Matt Cotton, CEO of Australian Gold said.

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DSN INDUSTRY ISSUES SUMMIT

New Horizons for Pharmacy Services Panelists emphasize the need to find gaps and opportunities By David Orgel

harmacy, like any other business, cannot rest on its laurels. Despite the enormous value it provides, pharmacy increasingly needs to underscore that value and find new healthcare opportunities. That was the perspective of industry leaders who spoke during an executive panel, called Pharmacy Services, at the Drug Store News Industry Issues Summit in New York City in December. Executives pointed to the importance of underscoring the value of pharmacy services, supporting the business model, raising the profile of solutions, customizing for different generations, identifying gaps in services, and collaborating with other stakeholders on new opportunities.

February 2020 DRUGSTORENEWS.COM

“We need to talk about how we in pharmacy and retail support the total healthcare journey and help patients through that navigation,” said panel moderator Jocelyn Konrad, chief pharmacy officer at Rite Aid. “We need to let consumers know we can actually do this.” Panelist Craig Norman, senior vice president of pharmacy at H-E-B, said the way to underscore pharmacy’s value is through developing patient relationships. He pointed to his company’s free health screenings program as a catalyst for building relationships. “Since 2008, we have provided over two and a half million screenings for patients in our stores every second Saturday of every month in every pharmacy,” he said. “This has been one of the key ways we’ve developed that relationship with the consumer that we

didn’t have previously. Maybe they were not our pharmacy customer, but now they’re coming in to take advantage of a free screening. I think that’s the kind of thing we have to continue to do as an industry to break down the barriers and let the value of the services we offer be known to everyone.”

Importance of Retailer-Supplier Collaboration

Retailers and suppliers need to work together to build and underscore the value of pharmacy, according to speakers. Part of the objective is working on initiatives that can be monetized, they said. “Flu shots have been a success story, and instantly pharmacies were able to monetize it,” said panelist Jeff Mondelli, vice president

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DSN INDUSTRY ISSUES SUMMIT of pharmacy, health and beauty at Wakefern Food. “However, a lot of what pharmacy does today, from a service perspective, is cost avoidance for the system. But how do you as a business monetize cost avoidance for someone else? So as we have conversations with our supplier partners, it’s important to get them to see this from our perspective.” Panelist Adam Keeth, director of pharmacy merchandising at Sam’s Club, said collaboration with suppliers needs to focus on activities that are beneficial for pharmacies and consumers. “There has to be a benefit for the consumer that they can see,” he said. “And if they can’t see it, they’re not going to follow through, and we’re not getting paid. It’s about how are we upfront working with the supplier and saying, ‘Okay, this is what works all the way through.’”

Identifying Healthcare Gaps

Panel participants said the industry needs to examine the healthcare landscape to find the most important gaps for pharmacies to fill. “It’s important to take a broader look at health care in general,” said panelist Tom O’Neill, president and CEO of cognitive testing device maker Cognivue. “That means finding where the gaps are in primary care. I believe there’s opportunity there. We know primary care is challenged meeting all the demands of their patients and their health

Jocelyn Konrad, chief pharmcy officer of Rite Aid, moderated the panel, which included executives from H-E-B, Sam’s Club, Wakefern Food, Cognivue, Inmar and Tabula Rasa HealthCare.

A View of Health Care 15 Years Out It’s hard enough to make forecasts a year ahead of time, but 15 years? Long-term predictions were one of the most engaging elements of the Pharmacy Services panel discussion at the Drug Store News Industry Issues Summit in New York City in December. Panel moderator Jocelyn Konrad, who is chief pharmacy officer at Rite Aid, asked panelists how they see health care shaping up 15 years down the line. She noted it will be a period when millennials will turn from young consumers into older ones likely needing more care. “I don’t think it looks anything like it does today,” said panelist Tom O’Neill, president and CEO of Cognivue. “I think pharmacy will become more and more part of the primary care offering to the consumer.” Panelist Kevin Barton, area vice president of business development at Tabula Rasa HealthCare, the parent company of PrescribeWellness, said he predicts a more personalized approach to pharmacy. “I think in 15 years, it’s going to be precision-based medicine with every individual patient,” he said. “And the pharmacist is going to be at the core to really manage what works best for that patient from a medication

February 2020 DRUGSTORENEWS.COM

perspective, as well as the rest of the patient’s healthcare journey.” Panelist Jeff Mondelli, vice president of pharmacy, health and beauty at Wakefern Food, said he agrees with Barton’s outlook, but added that the future “is up to us.” He said, “We’ve got to continue to provide that value because that’s where it needs to go. The generation that is going to age into needing chronic care in 15 to 20 years will expect that; we just have to recognize the white space and fill it.” Panelist Craig Norman, senior vice president of pharmacy at H-E-B, predicted pharmacists will still be integral to patients, but they will need to reach patients in a wider range of ways. “Pharmacy will always remain the face of neighborhood health care, regardless,” he said. “It’s just that we will be reaching those faces in a lot different ways than we are today. It could be through telehealth, it could be through chat connections, it could be through a myriad of different avenues that we’re not really capitalizing on currently. —David Orgel

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DSN INDUSTRY ISSUES SUMMIT systems. They see upwards of 40 to 60 patients a day, and many times, they just don’t have the time to focus on things like cognitive health. So where the pharmacy can add services, take the burden off the doctor, and possibly partner with these doctors and health systems to bring added clinical value to these patients while adding a new service/revenue stream, everyone benefits.” One way to increase opportunities for pharmacy is to expand the customer base being served, said panelist Kevin Barton, area vice president of business development at Tabula Rasa HealthCare, the parent company of PrescribeWellness. “The financial situation that pharmacy is in has caused us to focus predominantly on Medicare,” he said. “But there’s so much opportunity outside of Medicare. And when you look at average adherence rates, you’re seeing significantly higher adherence rates in Medicare versus other markets because that’s what we’ve focused on for the past 10 years. And so taking a step back and really focusing on the broader population is really an opportunity.”

Raising the Profile of Services

Also arising from the panel discussion were strategies on how to best communicate pharmacy’s value to consumers, including younger consumers who don’t yet have a deep connection to pharmacy. “We’re all on a healthcare journey and it changes throughout our lifetime,” said Lari Harding, vice president of product strategy and marketing at Inmar. “You have to meet the consumers where they are, and they’re on social. There are many good stories about how pharmacy is delivering good care and providing a good cost benefit to our patients. And you can tell those stories on social, and come together and use influencer marketing and other things to really make health care one of the pillars of your overall marketing strategy.” Choosing the right marketing platforms for different patients is an important objective, said H-E-B’s Norman. “We need to find the right marketing and advertising channels so that we can reach our customers in the way that they want to be reached with that important message,” he said. “That could be through a digital app or through social media. It could be through commercials and print advertising. We’ve

February 2020 DRUGSTORENEWS.COM

The Pharmacy Services panel was focused on the value of pharmacy services, as well as how retailers and suppliers can support the business model, raise the profile of pharmacy services, collaborate on new opportunities and reach out to specific generations of patients.

got to get the message of the value of pharmacy and the value of the pharmacist out there to the community.”

Enhancing Business Models

Panelists pointed to the importance of helping to enhance the business model of pharmacy services. Cognivue’s O’Neill broached the idea of an “annual health or screening club” that would provide a suite of annual services for a set price. “That way you’re not selling everything à la carte, which can be difficult to manage,” he said. “You bring clinical value at a value price, and create stickiness. You would include everything in one reasonable price that still makes the retailer profitable.” Keeth of Sam’s Club cited a recently launched program at the company focused on providing bundles of healthcare services. The program, called Sam’s Club Care Accelerator Together With Humana, was launched in October with pilots in some markets. The initiative is geared to members, including small business owners. “We focus on how do we go out and use our economies of scale and relationships to bring in disparate companies and say,

‘Look, for $50 to $240 a year, depending on level chosen, you can save on our optical, you can save on prescriptions,’” Keeth said. “But we’re also going to give you discounts on other things, such as chiropractic and dentistry. And all that for one lump sum.” Panelists also underscored the importance of relaying to patients the long-term benefits of pharmacy services expenditures. This is especially important at a time when many consumers are paying for all of their prescription costs and increasingly scrutinizing their healthcare spending, said Inmar’s Harding. “The way a consumer thinks about how they make purchasing decisions in every other aspect of their lives has now entered health care,” she said. “So they’re interested in understanding, ‘How can I prevent cost? How can I lower my cost?’ And I think we need to get creative as an industry and be willing to say, ‘Hey, consumer, I’m going to provide you these services and here’s my fee for services.’ That might be a better deal for them than the $6,000 or $14,000 that they have to pay out of their own pocket when they don’t take good care of themselves.” dsn

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COUNTER TALK

Pioneering Private Brands Private brands are driving demand and establishing dedicated followings By Nicole Peranick

W Nicole Peranick, senior director of retail transformation, Daymon

hen we think of the history of private brands, for a long time it was largely associated with copycat generics with good margins. Then over the years, the sector gained a reputation as a national brand equivalent. Today, private brands set the pace for the rest of the industry. They have gone from being a mere financial tactic to a key point of difference for retailers, and a driving force behind store choice. In fact, Daymon’s research shows that more than 5-in-10 shoppers said they shop at a store specifically for its private brands. What’s more, Daymon finds that the more private brands customers buy, the more committed they are to that retailer. Said differently, private brands drive demand and establish a dedicated following not easily replicated by national brands. Growing acknowledgement of the power of private brands has sparked a renewed focus on the industry, with an increasing number of retailers doubling down on their private brand businesses. As a result, one of the biggest trends we are seeing in private brands today is the shift from imitation to bold innovation. Thanks to mounting consumer interest and affinity towards private brands, the time is ripe for retailers to pioneer. In fact, 85% said they trust private brands just as much, and 81% said they buy private brands on every shopping trip. In short, we are seeing the balance of power shift to private brands. With renewed industry focus and permission to pioneer from consumers, drug retailers have the opportunity to take a more progressive stance on their private brand programs and leverage growing desire to be proactive in managing personal wellness to spark innovation. Today’s shoppers are more engaged than ever in taking control of their health, which has evolved from condition-based treatment to a more holistic, hyper-personalized approach that balances physical and mental agility. Retailers can seize this opportunity through their private brands to

February 2020 DRUGSTORENEWS.COM

deliver new and unique solutions that plus up performance, personalization and functionality, particularly in the face of rising healthcare costs. Consumers are now much more educated on ingredients and so feel confident in purchasing private brand products to solve for their healthand-wellness needs. What’s more, private brands have started to respond to consumer demands for cleaner labels where such unnecessary ingredients as dyes and preservatives have been removed, thereby further building credibility and confidence with the consumer as preferred options to meet their wellness goals. Even in beauty and personal care, private brands are beginning to rise to the occasion. Shoppers are seeking products that not only are effective, but also align with their personal values regarding natural ingredients, label transparency and social responsibility. In turn, they are embracing solutions that are as close to nature as possible, giving them access to cleaner and healthier products, while reducing their impact on the planet. Progressive retailers are responding with private brand innovation that harnesses the power of plant-based ingredients, such as adaptogens and superfoods, as well as eco-friendly formulations — think upcycled ingredients and sustainable packaging. Expect to see more follow suit to capitalize on this intersection between beauty, wellness and social consciousness. In doing so, retailers will deliver on the needs and results shoppers seek, while making them feel good about their purchase to build connectivity and loyalty. Private brands will continue to be the key to success in 2020 and beyond, as long as retailers use them to innovate and lead. In today’s highly dynamic and competitive retail environment, a strong private brand program provides the strategic lever needed to drive traffic and store choice. Adopting a culture of approaching private brands in this way opens the door to new opportunities for evolving well beyond the norms of the industry. dsn

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COUNTER TALK

Don’t Just Change – Improve How pharmacy operators can stay ahead of the curve By Bruce Kneeland

L Bruce Kneeland, community pharmacy specialist and industry consultant

ike it or not, change is inevitable — and, not all change is good. This fact makes it all the more important that industry leaders, chain managers, pharmacy owners and other pharmacy personnel find ways for pharmacy to not just change, but improve. Improvement takes careful planning and an astute sense of what can be done to meet the ever-changing demands of consumers, providers and payers. So, how does a pharmacy owner, manager or staff member help a pharmacy improve? Here are four suggestions: 1. Despite all the technology and overwhelming need for accuracy in the pharmacy, you should remember pharmacy is — at its core — a people business. Pharmacy personnel would be well advised to emulate the philosophy that drives Disney; that being, everyone who works for the pharmacy should think of themselves as an actor in a play, and their role is to help patients get and feel better. This is a tough job, but finding ways to make this happen is a mile marker on the road to improvement.

Not all change needs to be expensive or complicated. Motivated pharmacy personnel can find simple things they can do to improve their area of responsibility. Chain managers and pharmacy owners would be well advised to tap into the skills of the entire staff. 2. Realize the template for retail pharmacy success no longer primarily is how many prescriptions you fill. Margins are eroding and the cost of doing business continues to rise. This means retail pharmacies must find other services to offer or products to sell that generate revenue. The front end, whether it be clinically oriented or if it features a wide variety of non-healthcare items, is a critical factor in your success. Your plans to improve sales will need to include improved merchandising, better pointof-purchase signage, clinically appropriate and socially acceptable recommendation, enhanced

February 2020 DRUGSTORENEWS.COM

procurement procedures and dramatically improved marketing. Yes, this takes time, effort and money, but if you want to improve, you will need to invest in these areas. 3. Recognize that everyone on the pharmacy team, no matter their position or tenure, should be encouraged to look for ways to improve. The best ideas rarely come from the top, and even small improvements in attitude, customer service, cleanliness or professional recommendation can make a big difference. A regular item on your staff meeting agenda should be asking for suggestions on what can be done to help the pharmacy attract new and better serve existing patients. This means keeping track of how many new people come to the pharmacy and how many people you serve each day, not just how many prescriptions you fill. Then, soliciting ideas and implementing ways to increase those numbers. 4. Get out of the pharmacy and look around at other retailers in your area, and see what they are doing that is working. Legend has it that one of the early secrets to the success of Southwest Airlines came from an executive watching a NASCAR race who noticed how the pit crew worked so well together to get the car back on the race track — fast. The practice was modified and then implemented by the airline, allowing Southwest to get their planes back in the air more quickly. This meant the same plane and crew could make one or two more trips per day, which drastically improved profits. Learning from others is another mile marker on the road to improvement. Not all change needs to be expensive or complicated. Motivated pharmacy personnel can find simple things they can do to improve their area of responsibility. Chain managers and pharmacy owners would be well advised to nurture and tap into the customer service skills of the entire pharmacy staff. The point being, everyone working in the pharmacy can do something that will improve customer service, employee morale and pharmacy profits. Remember, change is inevitable, improvement is up to you. dsn

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COUNTER TALK

Resolutions for Growth Goals pharmacies can set to improve in 2020 By Cathy Kuhn

G Cathy Kuhn, director of strategy consulting, Updox

etting healthier, losing weight or saving money are among the top New Year’s resolutions we’re likely to make in our personal lives. Community pharmacists, too, often set goals at the start of a new year, hoping to build their business, stare down fierce competition, improve customer service or grow revenue. But, we all well know, achieving success can be tough. While the general results rate on resolutions may not sound favorable — consider that 80% of individuals actually give up on their resolutions by early February — the odds are not insurmountable. With a strong focus on their resolutions, community pharmacists can drive success in their practice and enhance the lives of those who rely on their services. To thrive in this new environment and set themselves apart from the competition, community pharmacists should consider adopting three core resolutions as we move forward in 2020. 1. Collaborate More Closely with Physicians Pharmacists and physicians have a lot in common. Both are trusted in their communities and are an important healthcare resource for those they serve. Plus, they share a desire to ensure patients receive the right prescription, adhere to their medication regimen and achieve a positive clinical outcome. And, in most cases, they rely on similar technologies and strategies to engage patients and coordinate care. Current research from Atlas of Science noted that collaboration between pharmacists and physicians in primary care may have a positive impact on patients with various chronic diseases, including hypertension, Type 2 diabetes and asthma. In addition, this interdisciplinary approach can minimize prescription confusion, help contain rising healthcare costs and improve the patient experience. 2. Adopt Technology to Increase Access to Care Community pharmacists serve a wide range of patients and geographies, and often these factors can impact access to care. Older individuals may have difficulty coming to the pharmacy to ask

February 2020 DRUGSTORENEWS.COM

questions in person, or distance may prevent frequent visits in rural areas. Secure text, mobile messaging and video chat can dramatically increase patients’ access to care. More than half of consumers feel that technology is improving their relationship with their healthcare providers, according to an Oct. 21, 2019 survey, “Patients want technology, remain frustrated with healthcare system by ResMed. About 47% of those responding to the survey said they would like to communicate through text. Secure two-way texting enables community pharmacists to engage patients, help them manage medication and provide customized tips to improve their health. Another 38% of respondents said they wanted to leverage video chat, which would help them speed access to care and conveniently address routine issues, even when pharmacists are miles away. 3. Use Digital Marketing to Connect to Consumers Whether it is social media ads, online reviews or a robust website, digital marketing offers community pharmacists cost-effective tools to reach potential customers and advertise clinical services. Research published in the Journal of the American Pharmacists Association noted that pharmacy as a profession has been slower to adopt the use of social media than other professions, despite the opportunity to utilize platforms like Facebook to better connect with key audiences and advertise pharmacy services. The study, titled “Why and how community pharmacies should better use Facebook,” noted that when pharmacies use digital advertising to connect with patients, it has resulted in a positive return on investment and improvements in public health. These are not unattainable goals. They are proven strategies that have been applied, with great success, by community pharmacists across the nation. By putting a laser-like focus on these activities, pharmacists will better be able to acquire new patients, engage existing ones, collaborate effectively with prescribing physicians and improve overall health in their communities. dsn

CBD NEWS

IPA Member Pharmacies Will Get Access to Green Roads’ CBD Products

Kadenwood Debuts Level Select CBD Drops CBD company Kadenwood is rolling out a new offering. The Newport Beach, Calif.-based company is introducing Level Select CBD Oil Drops, which feature broad-spectrum CBD in three levels of intensity. The mint-flavored product joins the company’s line of CBD products that includes roll-ons and sports creams that contain CBD without any THC. Kadenwood said it focuses on a vertically integrated seed-to-shelf business model. “In developing new Level Select CBD Oil Drops, we were committed to creating products for the everyday user, while maintaining the highest standards across quality and potency components,” said Traci Mason, vice president and general manager at Kadenwood. “Just as with our established lines of sports creams and roll-ons, our new CBD Oil Drops offer some of the highest levels of CBD on the market at an affordable price point.”

Level 1 drops contain 1,200 mg of broad-spectrum CBD per bottle, which works out to 20 mg per serving, an amount ideal for those new to CBD oils. The Level 2 formulation contains 2,400 mg of broad-spectrum CBD per bottle, which is 40 mg per serving, and Level 3 drops contain 5,000 mg of broad-spectrum CBD in a bottle, delivering 80 mg per serving. “We’re excited to once again raise the bar for quality CBD products available to consumers with the launch of new Level Select CBD Oil Drops,” said Erick Dickens, CEO and co-founder of Kadenwood. “This new offering expands the variety of products in which users can experience the benefits of Kadenwood’s pure hemp-derived CBD oil, which has been perfected through our proprietary farming operations to create the highest-quality CBD.” The Level Select CBD Oil Drops currently retail on the company’s website at $69.99.

February 2020 DRUGSTORENEWS.COM

More independent pharmacies are about to gain access to Green Roads’ CBD products. The Independent Pharmacy Alliance, one of the largest pharmacy group purchasing organizations and trade organizations, is launching a new program with Green Roads to enable access to the company’s full line of tinctures, topicals, gummies and capsules for IPA’s more than 3,150 member pharmacies. Green Roads is an award-winning CBD company dedicated to improving the physical and mental wellbeing of its customers. The company said it uses pure, potent ingredients, proprietary formulations, multistage independent lab testing, and QR codes linked to lab results on every package, which sets the gold standard for transparency and quality. Green Roads leads the industry in product transparency and is sold in more than 10,000 locations, the company said. “Consumers are looking to CBD therapies as a natural and effective way to improve their health, and it is the responsibility of the pharmacy industry to ensure we are transparent and provide consumers with the tools to make informed decisions,” said John Giampolo, IPA’s executive vice president. “Through our partnership with Green Roads, we are providing our member pharmacies and their customers with an unprecedented level of product transparency not seen anywhere else. This level of transparency ensures that our member pharmacies have access to safe, reliable, high-quality products, for which pharmacists can confidently provide their recommendation.”

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CBD NEWS

Irwin Naturals Adds Skin Care Products Irwin Naturals is capitalizing on consumer interest in skin care with CBD. The Los Angeles-based company has unveiled the HydroCanna line of face, hair and body products the it said will be priced accesibly. HydroCanna products feature full-spectrum hemp extract that includes naturally occurring CBD, as well as C60 fullerene, a carbon molecule with antioxidant properties, Irwin Naturals said. HydroCanna’s CBD face products include daytime and nighttime facial moisturizers, facial and eye serums, a facial peel, pore refining cream and a moisturizing face mask, all priced between $29.99 and $39.99. The CBD body collection includes body includes body creams, body lotion and a CBD balm, all priced between $37.99 and $44.99. The HydroCanna hair line includes a CBD Scalp Serum priced at $39.99. All products come in recyclable plastic packaging and are free

of artificial colors, dyes and synthetic fragrances. They currently have launched on the HydroCanna website and at select retailers carrying drug store skin care and cosmetic lines. Irwin Naturals executives said Brightfield Group research estimates the overall CBD market will surpass $22 billion by 2025.

Green Gorilla Rolls Out Higher-Concentration CBD Balm Green Gorilla is adding to its lineup of organic CBD products. The Malibu, Calif.-based company has launched its organic botanical CBD balm in a 750-mg concentration. It joins Green Gorilla’s original botanical CBD balm, which is sold in a 400-mg concentration. The balm contains arnica, eucalyptus and lavender oil to provide a cooling feeling, as well as various phytonutrients and essential fatty acids, the company said. It can be applied to sore or achy muscles and joints, as well as the chest, neck and back. Green Gorilla said the product also contains sunflower seed oil, olive fruit oil, beeswax, cypress oil, black cumin seed extract, rosemary leaf oil, lecithin, turmeric root extract and Calendula officinalis flower extract in addition to 95% USDA-certified organic CBD. Green Gorilla’s 750-mg balm sells for $99.99 and has launched at select retailers nationwide, as well as on the company’s website. The 300mg balm sells for $49.99. The balm joins Green Gorilla’s growing line of CBD products, which includes Gorilla Gummies, launched last year.

February 2020 DRUGSTORENEWS.COM

FOCUS ON: NORDIC NATURALS

Emphasis on Quality Nordic Naturals’ supplements aim for high performance as the company branches out into food, drug and mass BY SETH MENDELSON

fficials at Nordic Naturals have a pretty simple goal: to make the world’s safest, most effective nutrients essential to health. Easy words, but a tall task for any manufacturer looking to gain a niche with a fickle and demanding consumer base, which increasingly is eager to call any company on the carpet if their products do not measure up. That is especially true in the nutrients segment, where shoppers look long and hard at products before deciding which items to purchase. Officials at the Watsonville, Calif.-based company said that they are meeting their goal, as well as high consumer expectations, offering the trade a wide range of nutrients across a number of key segments and at a variety of price points. Plus, they said, Nordic Naturals is staying true to its core beliefs. “We do whatever it takes to make sure that we offer consumers the best ingredients and products,” said Brian Terry, national sales manager of food/drug/mass and specialty at the company. “We offer the industry a premium product that is unique, and we will do whatever we have to do to offer high-quality nutrients that bring health benefits to as many consumers as possible.” Nordic Naturals was founded in 1995 by Joar Opheim, who is still the company’s CEO. He saw an opportunity to market quality fish oil products in the United States after discovering on his trips from his native Norway that few options for fish oil products existed here. According to the company website, Opheim found that low-concentration fish oil was the only product available at that point. “With each trip home, he would fill an extra suitcase with bottles of his favorite fish oil to share with friends in the U.S.,”

February 2020 DRUGSTORENEWS.COM

the website said. “This deep desire to share the power of pure, fresh omega-3 nutrients inspired Joar to found Nordic Naturals. It still drives the company today.” A quarter-century later, Nordic Naturals has made a name for itself across various retail outlets, not to mention the professional segment. The company now offers roughly 150 different items, ranging from fish oil products to other nutrient products, including children’s multivitamins, vitamin B and D, LDL, probiotics and joint relief. Products are manufactured at its plants in Norway and California. The company has about 250 employees. “We first went after the professional market and then tackled the natural market with chains like Whole Foods, Vitamin Shoppe and Sprouts. We have about a 50% market share in the fish oil segment in natural stores,” Terry said. “Over the last two to three years, after the success we proved in natural stores, we have expanded to food/drug/ mass. We want to offer essential nutrients to everyone and not just through the natural outlets.” He also said that some retailers, including Wegmans and Publix, carry as many as 25 to 30 SKUs of Nordic Naturals products. “We have a truly innovative assortment of products to offer our retail partners,” Terry said, noting that the company tries to keep price points for merchandise sold at mass under $30, with some priced as low as $12.99. The future is all about finding more nutrients that can benefit from the “Nordic Naturals legacy,” Terry said. “We see the opportunity to add even more innovation to this category. Our goal is to take a product and put our unique spin on it. The result will be a better product for the consumer and more sales for our retail partners.” dsn

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PRODUCTS TO WATCH

New Year, New Products HRG’s five picks from January

he year started with no shortage of new products. Manufacturers leapt into a new decade with their latest products, releasing 394 new products in January. Of those new products, 57% were in the beauty category, 36% were wellness focused and 7% were OTC offerings. Rising to the challenge of evaluating all of these products, Hamacher Resource Group’s new product team pored over each item in order to highlight five that managed to stand apart from the crowded pack. They were:

Dentek Cross Flosser Floss Picks

Dentek continues to release products meant to make oral care easier. The Prestige Consumer Healthcare brand introduced Dentek Cross Flosser, X-shaped floss picks that are designed to tightly hug teeth in an effort to remove more food and plaque by maximizing surface area contact. Dentek said it guarantees the fluoride-coated floss will not break.

Old Spice Ultra Smooth Deodorant, Fresh Start

February 2020 DRUGSTORENEWS.COM

One of the most iconic men’s deodorant brands continues to innovate while responding to trends. The Procter & Gamble brand’s Ultra Smooth deodorant is an aluminum-free product that also launches the Smooth collection. The dye-free product, which is available in a 3-oz. stick, has been tested by dermatologists.

AllerLife Daily Wellness Support Sleep Capsules

Non-Drowsy Claritin Chewables Tablets, Cool Mint

Earwax MD Drops

Sanofi’s AllerLife brand debuted a supplement tailored to help allergy sufferers and provide sleep support. The drug-free daily supplement contains melatonin to help fight the inability to fall asleep and pairs it with turmeric, astragalus root, and a blend of vitamins C and D and zinc. The AllerLife Daily Wellness Support Sleep Capsules are sold in 20-count bottles. Chewables continue to be a popular formulation, and Bayer’s Claritin allergy relief brand has brought to market a chewable for adults that has the same benefits as a 24-hour Claritin tablet. The chewable, available in cool mint, is formulated to provide an immediate and lingering cooling sensation to help with such allergy symptoms as an itchy throat. The product is sold in 24-count boxes.

Ear care brand Eosera continues to build out its offerings with Earwax MD Drops. The drop version of its popular Earwax MD product uses dual-action technology that is meant to help clean and clear the outer ear canal. Earwax MD drops are designed to work in 15 to 30 minutes, and the company highlights its formula, which it said is different than other ear care products on the market. The drops are sold in 15-ml dropper bottles. dsn

GREETING CARD INNOVATION

Card Sharks New collections, designs and treatments are playing a big role in the success of the greeting card category By Seth Mendelson

o paraphrase Mark Twain, the rumors of the death of the greeting cards category at retail have been greatly exaggerated. To the contrary, greeting cards and the overall social expression segment continues to thrive at mass retail, helped by the desire of many consumers to, at least temporarily, push digital technology aside in favor of some old-fashioned written communication. In fact, industry sources said that more than six billion greeting cards are sold annually in the United States. The result is a continued effort by retailers and suppliers to offer their customers a wide range of products, both seasonally and throughout the year. By doing so, the industry hopes that consumers will continue to flock to retail stores for their social expression needs, helping retailers make more money from the category and giving merchants the opportunity to use the category as a magnet to attract these shoppers. New products, many said, are the lifeblood of the category, and several leading suppliers continue to place a huge emphasis on product introductions to entice consumers to buy more merchandise. “It is absolutely shocking the amount of money these companies spend to get new products on the shelf in a consistent manner,” said one greeting card buyer for a major East Coast supermarket chain. “They realize that innovation is the secret sauce to their short- and longterm success, and they must keep the lights going in research and development.” Here is a look at what some of the leading greeting card publishers are offering to kick off the new decade.

American Greetings

The Cleveland-based social expressions company is offering an Easter collection

February 2020 DRUGSTORENEWS.COM

that will feature new ways to celebrate at price points customers will appreciate, company officials said. “We’re offering value-priced cards that will encourage shoppers to celebrate and recognize more recipients,” a company spokesperson said. “Our Easter and spring collections offer a balance of both traditional and modern interpretation, ensuring there is something for everyone. Additionally, we are offering boutique-style displays that will encourage shoppers to fill their kids’ Easter baskets with cute cards and stickers.” The company’s value-priced cards will include Wonder Woman. “We are confident shoppers will be thrilled with this popular icon and emboldened even further by Papyrus’ stunning treatments and eye for detail,” the spokesman said, noting that other innovation is coming

to stores soon. “The horizontal birthday card goes a step beyond with a large removable patch that adheres to everything from laptops to journals.” According to Tom Kilcourse, senior vice president of North American sales for the company, “Cards Matter and remain a powerful tool to help people connect with each other. It takes time for a person to write a card, but it is the heartfelt feeling you get when you receive one. We are finding that in addition to sending cards in the mail, consumers are increasingly handdelivering cards too. “As shopper behavior evolves, its influence on retail categories like the greeting cards industry continues to change. As a result, American Greetings and its retail partners work together to build productivity and consumer engagement for the way consumers are shopping today — in-store, online and with click-and-collect,” Kilcourse said. “Additionally, greeting card shoppers still search for the opportunity to celebrate and acknowledge diversity.” He said that connecting with consumers along their pre-shopper journey is another critical component to greeting card marketing. “While shoppers are making their lists, American Greetings is helping retailers leverage a wide range of vehicles and technologies to capture their attention and remind them that they need to add cards to the list,” he said. “Loyalty program emails, in-home mail, digital ads with load-to-card coupons, advertising within shopping list apps, social media, and targeted digital advertising are just a few of the options that we integrate into our marketing strategies.” “At American Greetings, our purpose is to help people build and maintain meaningful connections … we just happen to make greeting cards.”

C ODE: C S -FEB20

GREETING CARD INNOVATION

Hallmark

The Kansas City, Mo.-based company is offering Signature Paper Wonder — premium 3-D pop-up greeting cards. For many years, Hallmark Signature, the fastest growing premium greeting card brand, has created beautiful and sophisticated cards, featuring intricate and dimensional details for the most special occasions, company officials said. During the 2019 holiday season, Hallmark took it one step further with Signature Paper Wonder. When opened, the cards reveal a show-stopping laser-cut design that can be viewed from any angle. The cards lay flat, making them displayable and the perfect keepsake to preserve a special memory. In 2020, consumers will be able to find Signature Paper Wonder cards for more holidays, such as Valentine’s Day and Mother’s Day, as well as such everyday occasions as birthdays and weddings. “Wellness is a key trend that our consumers, especially those in emerging generations, tell us is important to them,” said Amy McAnarney, Hallmark’s vice president and general manager of national accounts and business development. “As our increasingly digital world encourages more political, social and emotional awareness, young people are looking for ways to improve their relationships, emotional well-being, and surround themselves with positivity and good. It’s no surprise that they are turning to greeting cards as a way to create genuine, authentic connections and put more good into the world. Hallmark Good Mail is a curated assortment of cards that feature diverse artists, trend-forward designs and an authentic voice that focus on unique, modern, real takes on life that reflect today’s relationships. With a focus on emotional well-being, Good Mail offers more captions for mental wellness and millennial life events, as well as more LGBTQ captions. The cards appeal to consumers who are optimistic, have an eye for design, and are looking for unexpected ways to connect and make the world a kinder place, one card at a time, McAnarney said. Innovating the shopping experience

February 2020 DRUGSTORENEWS.COM

remains a primary focus, McAnarney added. She said that consumers want and expect a seamless retail experience — whenever they shop and wherever they shop. “This is why Hallmark brings the same rigor and capabilities to category management online and in store,” she said. “We have a dedicated e-commerce team focused on developing innovative strategies, solutions and tools for our retail partners to seamlessly bring their greeting card aisles to their online markets. Flexibility is key in our operational approach and we can easily adapt to fit within a retailer’s existing capabilities and iterate alongside them as they grow. Hallmark also is investing in capabilities that go beyond just creating a digital shopping experience to help change how consumers connect. “We’re making it so she never forgets another birthday; and we’re making the perfect card easy to find, every time. And best of all, we’re making sure finding and sending a card fits right into her already busy life,” McAnarney said. “We use what we know about her when she shops online, which is almost always more than we know about her when she shops in store, to create more personalized and relevant experiences.”

Designer Greetings

The Edison, N.J.-based company has been aggressive making a statement with retailers

and consumers that it can offer a difference in their greeting cards section. CFO Dawn Garvey said that Designer Greetings is constantly looking to add to its collection. “Designer Greetings is refreshing many of our existing card lines with new eye-catching designs,” she said. “Popular card lines that have received an update include JG Studio, a boutique card line; A Little Salty, Designer Greetings’ newest humor line; Oh Snap, a photographic humor line; Premier Boutique, a high-end line, featuring many embellishments; and Intricate Die-Cut, a line that many consider to be a visual masterpiece. In addition, this year, Designer Greetings will introduce a line of journals, notebooks and planners. Garvey said that the current trends in the greeting card industry indicate that younger shoppers — both millennials and Gen Z — are purchasing higher-value cards with a handmade, boutique style. “These cards bear higher price per unit, helping the retailer build on the average revenue per order, a key driver for a healthy retail business,” she said. “In addition, consumers have a thirst for humorous greetings that will provide a positive, light approach to many topical events. Designer Greetings has hit the mark on both of these current industry trends by developing a line of trendy, high-end, handmade looking cards and their humor lines.” dsn

Give shoppers more reasons to celebrate the season! Our American Greetings spring collection offers fresh, new wishes for Easter and spring. From holidays, birthdays to special occasions, shoppers can share fun and always heartfelt sentiments with everyone they know. Itâ&#x20AC;&#x2122;s one more way American Greetings helps consumers create meaningful connections while driving your sales.

COVER STORY COVER STORY

BRAVE

NEW WORLDS How retailers are leveraging their store footprints to fuel omnichannel efforts BY MARK HAMSTRA

he winning food and drug retailers of the future will not think of their brick-and-mortar stores in terms of competing against online sales, but instead integrating the stores into the online sales experience. “The retailers we see being most successful right now are actually the ones that I would say are least likely to be fighting the shift from in store to online,” said Tory Gundelach, senior vice president at Kantar Consulting. “They are really thinking about it from a shoppercentric view, letting the shoppers fulfill

February 2020 DRUGSTORENEWS.COM

their needs in whatever way is most convenient for them at that moment.” Shoppers tend not to adhere exclusively to any one channel for buying consumables, she said. Instead, they use a combination of home delivery, traditional in-store shopping and, increasingly, shopping online, and picking up their products at the store as that service becomes more widely available. “We shouldn’t think about it as the channels competing,” Gundelach said, citing the potential to use physical stores as fulfillment centers for online orders. “We should think about it as the channels augmenting each other.”

Food and drug retailers increasingly need to think about their stores as serving multiple purposes for consumers, she said. Their networks of brick-and-mortar boxes must provide more engaging experiences that make consumers want to spend time shopping there. At the same time, they must provide efficient shopping trips to meet increasing demands for convenience, as well as serve as warehouses for digital order fulfillment. Gundelach said she sees retailers rethinking their layout and design going forward, making more use of back rooms to stage orders for delivery and click-and-collect shoppers.

COVER STORY

CONVENIENCE GAINS IMPORTANCE THE DEFINITION OF CONVENIENCE IS EVOLVING With online ordering available without leaving the comfort of the living room couch, the type of convenience afforded by a seamless in-store shopping experience is increasingly important, according to a recent research report from the National Retail Federation. The Consumer View Winter 2020 report found that 97% of consumers said they had backed out of a purchase because it was inconvenient for them. “Time is a precious commodity for today’s consumers,” said Mark Mathews, NRF vice president for research development and industry analysis. “Shoppers are busier with commuting to work, dealing with family obligations or catching up on schoolwork, among other things. Naturally, convenience factors are playing a larger role in their shopping experience.” According to the report, 83% of consumers said convenience while shopping is more important to them now compared with five years ago, and the popularity of such delivery services as Amazon Prime, Shipt and Instacart illustrate that consumers are willing to pay a premium for that convenience. The report noted that 66% of shoppers pay for at least one type of delivery service, and about a quarter said they pay for multiple delivery services. The report also found that consumer expectations around convenience differ by shopping channel and the products being purchased. Thirty-eight percent of consumers surveyed said that when shopping online, convenience matters most during the beginning of the shopping experience when they are researching products. That compares with 40% of in-store shoppers who said convenience is most important at checkout. Consumers also said convenience is more important when shopping for everyday items, such as groceries, personal care items and pet supplies. —Mark Hamstra 48

February 2020 DRUGSTORENEWS.COM

Brick-and-mortar boxes must provide more engaging experiences that make consumers want to spend time shopping there. At the same time, they must provide efficient shopping trips to meet increasing demands for convenience, as well as serve as warehouses for digital order fulfillment. “People ask me a lot of times, ‘We’ve got these retail footprints that are, in some cases, 150,000-plus square feet. What’s going to happen to that?’,” Gundelach said. “Over time, I think, particularly in the grocery space, we’ll see some of that get remodeled and become backroom space. For example, why would you pick milk and eggs off the selling floor [for online orders] when you can have your highest-selling items already pre-staged in the back room?” Meanwhile, on the front end, retailers are experimenting with more checkout options, from traditional cashier-assisted checkout and self-checkout terminals to scan-and-go options using a retailer’s app — and, in some cases, creating special areas for in-store pickup. “At the end of the day, it makes the store a really viable part of the retailer’s overall logistics and ecosystem,” Gundelach said. “For most retailers, brick-and-mortar assets are the biggest assets on their balance sheet, so being able to support new fulfillment methods and new selling methods with that large asset is actually really important.” Bill Duffy, research director at consulting firm Gartner for Marketers, formerly called L2, said Walmart is setting the standard for optimizing its massive store base to provide online purchasing, pickup in-store shopping and fulfillment. The service has been rolled out to about 3,000 locations. “It’s been a major driver of their digital growth year over year,” he said, noting that Walmart also continues to expand home delivery from its store locations. “While this is not driving customers into the stores, they’re leveraging their store footprint as a way to directly compete against Amazon, saving on the fulfillment costs associated with same-day and next-day delivery.”

Rethinking Convenience and the Store Experience

Part of the challenge retailers face is that “running a quick errand at the store” to pick up some forgotten item may no longer be the most convenient way to obtain that item. Instead, an Amazon Prime membership or an Instacart delivery might have that item delivered to a consumer’s door within hours. “What we have found is that it’s not that shoppers don’t want to go into the store,” Gundelach said. “It’s just that a lot of times it’s more convenient to do something through online, and they don’t necessarily have a reason to give up that convenience.”

COVER STORY Transforming stores into frictionless environments that make shopping a more enjoyable experience is one way retailers are seeking to drive more customers to shop inside their stores. Gundelach described enhancing the in-store experience for consumers as “minimizing the bad time and maximizing the good time.” In such categories as home goods, apparel or electronics, Gundelach said providing a “good time” for shoppers translates into offering a “truly immersive” experience, where consumers can interact with the products in ways they will never be able to do online, and where store workers have in-depth product knowledge. In the grocery and drug store environment, that type of experience could be driven through such features as wine bars, expanded gourmet cheese assortments, or expanded health care or beauty care services. Woonsocket, R.I.-based CVS Pharmacy embraced this idea when it began rolling out a revamped store design in 2017 under the leadership of then-president Helena

Transforming stores into frictionless environments that make shopping a more enjoyable experience is one way retailers are seeking to drive more customers to shop inside their stores. Foulkes, who has since left to become CEO of Hudson’s Bay. The revamp included a healthier food assortment and new standards for vitamins, supplements and beauty products, as well as design changes that included a “trend wall,” showcasing new beauty products and niche brands, as well as a “beauty discover zone,” highlighting on-the-go options at checkout. The physical store and merchandise changes coincided with a digital revamp that included enhancements to the retailer’s mobile app and its ExtraCare Rewards program. CVS Pharmacy’s approach raised the

bar on creating a compelling in-store experience for drug store operators, said Burt P. Flickinger III, managing director at New York-based consulting firm Strategic Resource Group. “Their model is having the best loyalty program in the business and turning the drug store into a local neighborhood supermarket, rather than let the extreme value retailers like Aldi, Lidl, Grocery Outlet and Trader Joe’s, and the dollar stores, pick up a lot of the convenience food retailing,” he said. CVS Pharmacy makes its offering compelling as a fill-in grocery shop with a combination of sharp pricing on popular

INVESTING IN THE STORE EXPERIENCE At a time when retailers are facing increasing pressure from online channels and investing in their own online shopping and fulfillment offerings, it may be especially difficult for retailers to justify allocating resources to enhancing the in-store shopping experience.

A food retailer might, for example, begin offering a wide selection of specialty cheeses, with a cheese monger and all the costs that go with it in order to enhance the store’s positioning and drive customer visits.

When making investments to enhance the in-store experience, retailers need to consider multiple factors, including their own brand positioning in the market, said Tory Gundelach, senior vice president at Kantar Consulting.

“That, in and of itself, might lead to higher shrink in that category, but if it’s able to actually get shoppers to come into the store and grow their baskets when they pick up a click-and-collect order, that overall still might be the right investment for the retailer,” Gundelach said.

“As a retailer, it is important to pick your spot in terms of what are the investments that align with what you’re trying to accomplish with your shoppers, versus spreading investments thinly and then not really having shoppers even notice that you’ve done anything different,” Gundelach said.

She said the industry tends to fall short when trying to measure things that don’t happen in isolation, such as a tracking shopper’s behavior across multiple steps to assess if certain investments are driving increased sales or measuring the benefits of having knowledgeable sales staff.

Another aspect of weighing investments in the in-store experience involves rethinking how the returns on such investments are measured. The goal is to take a more holistic view of such investments instead of seeking to find a direct correlation between specific shopping enhancements and any business improvements that might follow.

“I think there’s a lot that we need to do as an industry not just in terms of the way we think about measurement, but in becoming sophisticated enough to truly measure those things in the right way,” Gundelach said.

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—Mark Hamstra

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COVER STORY

Another important functionality of mobile apps is their potential to incorporate loyalty programs that allow retailers to generate data, which can be used not only to provide rewards but also to aid in the suggestion of products for shopping lists or targeted digital coupons based on past purchasing histories. national-brand items and a strong privatelabel assortment, Flickinger said. The chain merchandises about 80% of the key categories and brands that consumers buy most frequently at supermarkets very close to the cash registers at the front end to facilitate these convenience-shopping trips, he said. Walmart, while not historically known for offering a compelling in-store experience, has focused sharply on that area of its operations recently, at the same time, it has been ramping up its digital shopping capabilities. The results have been evident in the retailer’s strong store sales performance during the past year. “We spend a lot of time on the customers and the customer experience,” said Steve Bratspies, the retailer’s then-chief merchandising officer at Walmart U.S., at the Barclays Global Consumer Staples Conference last year. “We track customer data very closely. We get customer experience data weekly real time, and it’s actually the first thing that we talk about every single week at our U.S. officers meeting.” Flickinger suggested that one way traditional food-and-drug combo stores could emulate Walmart is by moving their pharmacies closer to the front end, in proximity to the most popular food and beverage categories, in order to provide a more convenient in-and-out experience. “This allows the shopper to do a quick convenience shop in 15 minutes, the same way one could use a CVS as a substitute supermarket,” he said.

February 2020 DRUGSTORENEWS.COM

Leveraging Apps in Store

Retailers also are using technology in multiple ways to enhance the in-store experience. Mobile apps, for example, are becoming more refined in terms of their ability to create lists, apply coupons, provide self-checkout capabilities and other functions. “There are challenges with apps — essentially getting customers to use them — but we do see a couple of pretty compelling use cases,” Duffy said, citing Goodlettsville, Tenn.-based Dollar General’s DG GO! app as an example. The DG GO! app, which is being consolidated into the main Dollar General app, includes a tool that allows customers to add up the total of their items while they’re shopping, so they can ensure that they don’t exceed their budgets when they reach checkout, Duffy said. In a recent earnings conference call with analysts and investors, Todd Vasos, CEO, said the budgeting tool had gained widespread use among customers and had been expanded to 15,000 locations as of the third quarter of last year. Vasos said part of the chain’s digital strategy includes “innovating to meet [consumers’] increasing desire for convenience.” Dollar General has expanded self-scanning and expedited checkout using the app at more than 700 of its stores, for example. It also recently began testing self-checkout in some stores, and has been pleased with the early results, Vasos said.

In addition, Dollar General was preparing to begin testing DG Pickup, its buyonline, pickup-in-store offering, during the fourth quarter. “Our digital efforts are focused on making things easier for our customers by providing an even more convenient, frictionless and personalized shopping experience,” Vasos said. “Importantly, these efforts will continue to be tailored specifically to the Dollar General customer.” In-app digital shopping lists are another functionality that retailers can leverage to improve both the in-store and online experience, if the list allows customers to add products easily and pair them with coupons, Duffy said. The leading retailers excel at creating logical adjacencies so that shoppers’ building lists in the app can easily add products that go together. Adding peanut butter to the list might prompt suggestions for jelly and bread, for example. Another important functionality of mobile apps is their potential to incorporate loyalty programs that allow retailers to generate data, which can be used not only to provide rewards, such as discounts at checkout, but also to aid in the suggestion of products for shopping lists or targeted digital coupons based on past purchasing histories. At Whole Foods Market, for example, customers can use the Amazon Prime app as a loyalty program at checkout. “In the long term, we expect Amazon to use that data to start sending more product suggestions to the customer when they’re online,” Duffy said, to help drive impulse sales over and above the planned purchases that may have appeared on a written list. Because retail apps tend to be downloaded by only a store’s most loyal customers, Duffy suggested that retailers need to duplicate some of the key functionality of the app onto the mobile website, so that any consumer with a smartphone can leverage these tools in store. “An app is very useful for geolocationbased tools and for certain types of expedited payments, but eventually retailers need to make sure to move those key features onto the mobile site, so that they’re accessible by everyone,” he said. dsn

PHARMACY | GENERICS

Finding a Work-around Generics companies fight headwinds by expanding their scope and capabilities By Sandra Levy

t a time when people expect negative news in the generics industry — whether it is unabating competition, price deflation, product quality and recall issues, or product supply shortages — many generics firms are managing to thrive. Amidst this disruption, many players in the generics sector are counterpunching with innovative strategies, accelerating their efforts to pursue a diversified business model and focusing on significantly increasing their pipeline of products to include new therapeutic areas and new dosage forms. They also are developing and

February 2020 DRUGSTORENEWS.COM

commercializing complex medicines and delivery systems that position their business for continued long-term growth. The experience of Bridgewater, N.J.based Alembic is a case in point. Prior to 2019, most of Alembic’s products were solid oral dose tablets and capsules. In 2019, the company launched its first dermatological and ophthalmic products, including generic Bromday and generic Lumigan. This year, the company is expanding into injectables, oncology and oncology injectables. Armando Kellum, Alembic’s vice president of sales and marketing, said the

company’s foray into new therapeutic categories was driven by the fact of decreased competition in these areas. “We felt they were good spaces for us to get into, and that we could provide additional value in terms of bringing consistent supply at a reasonable price to patients and our customers,” Kellum said. East Windsor, N.J.-based Aurobindo is another prominent player in oral solid products that has expanded its pipeline to include ophthalmics, dermatology and oncology. “Oncology is the new frontier for us. We’ve already started launching the first products into the oncology market. We also have

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CEO, said that after several years of intense downward pricing pressure, generic price deflation has begun to stabilize in low singledigit annual declines. Yet, while the outlook is more positive relative to previous years, competition remains intense. To that end, Upsher-Smith’s pipeline, which includes complex generics, liquids and ophthalmics, is more diversified than ever before. In the last two years, UpsherSmith launched generic versions of Cardura, Lomotil, Targretin, Prozac, and Onfi tablets and oral suspension.

No Easy Answers

hormones, peptides, metered dose inhalers, ophthalmics, and other alternate delivery form products. We are covering a lot of different bases in terms of diversifying the product line and have really branched out,” said Aurobindo’s vice president of commercial operations Paul McMahon. “That’s important because it’s a very competitive market and we’ve seen competition accelerate in the last couple of years. The more diversification we can have, and the more hedging of our portfolio and broadening the ways we create value for our customers, the better positioned we are for growth and long-term stability.” Many of the areas in which companies are branching out into new territory are happening organically as they seek out therapeutic areas and delivery methods that offer the most sizable opportunity. At Ascend Labs, for instance, the company — which executive vice president John Dillaway described as category agnostic — has instead focused on delivering products for underserved markets. This has led the company to search for molecules that are coming off patent, which also might be a little more difficult to develop, and thus attract fewer players. This strategy has ushered the Piscataway, N.J.-based company into nasal sprays and transdermal patches. Unlike branded product counterparts, which typically have little or no branded competition on exact molecules, it’s not unusual for a generic molecule to have 10 to 15

February 2020 DRUGSTORENEWS.COM

competitors, Dillaway said. “Given the consolidation among chains and group purchasing organizations, it’s possible to have more competitors than customers on some molecules, which is not the best strategy for success,” he said. “Any way that we can gain distinction is good. Ascend has spent the last year enhancing its production capability in an effort to stand out as a strong supplier.” Another generics company that has expanded into new therapeutic categories and formulations as a competitive strategy is Bridgewater, N.J.- based Amneal. Chirag Patel, Amneal’s co-CEO and president, said that increased competition on easier to formulate generic products like oral solids has led Amneal to focus on more complex products, such as inhalation products, transdermal systems, oncology injectables and ophthalmics. “We will make larger investments into these areas where we can leverage our deep scientific and manufacturing capabilities to bring these products to market,” Patel said. “They are still commercially attractive compared to the highly competitive products in oral solids, so we’ve been focusing on these products for the last few years.” Maple Grove, Minn.-based Upsher-Smith also has significantly increased its pipeline of products to include new dosage forms, as well as more traditional and specialty products. Rusty Field, Upsher-Smith’s president and

While expanding into new therapeutic areas and formulations may seem like a panacea, it is no easy feat. It does not come cheaply. It involves major investments in operations and scientific capabilities, and it is a timeconsuming endeavor. In fact, some of the products currently being launched have been years in the making and have much to do with the complexity of the products. “It takes years to build the infrastructure, such as the manufacturing facilities, and to complete the R&D of these complex dosage forms, and to file with the FDA, especially for the inhalation products, the longacting injectable products, and some of the more sophisticated ophthalmic products,” Amneal’s Patel said. Amneal’s recently launched first-to-market generic version of the branded birth control NuvaRing was the culmination of about 10 years of work, and injectables provide several formulation and manufacturing challenges. “Certain injectables are long-acting technologies, which eliminate the need for daily injections and can be effective for 30 days or more. They are difficult to formulate and involve complex manufacturing,” Patel said. “In many cases, they require specific manufacturing capabilities per product and higher capital expenses than easier to formulate generic products. This is why the barriers to entry are higher in these products.” Alembic’s Kellum concurred, saying that it is costly to expand into new areas. “It’s a new investment versus the prior facilities that were for solid oral dose,” he said, noting that Alembic has built a separate oncology

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IQVIA’s Long Sizes Up Generics Market

injectable and oncology solid oral dose facility, and it is constructing an ophthalmic facility. Aside from the expense and time needed to build new facilities, FDA inspections of these sites are required. “Our oncology solid oral dose facility has been inspected and approved by the FDA,” Kellum said. “All of that takes time and that’s a big component of it, and you are spending a fair amount of money to do that.” Dillaway echoed Kellum’s sentiments. “The biggest challenge is acquiring the manufacturing equipment and receiving FDA site clearance on any new equipment, products and dosage formats,” he said. “These require big investments of both time and money well in advance of any ROI.” Facilities aren’t the only difficulty — creating these generics also require serious scientific capabilities, Aurobindo’s McMahon said. “These types of products are specialized for a reason, and since they involve more specialized science, there are additional challenges and higher barriers to entry. Hormones require a dedicated facility, and injectables, ophthalmics and inhalation products require a sterile facility, which not all suppliers may choose to invest in or have the quality and regulatory skill set to operate,” he said. “Beyond that, some of the device-based products, like metered-dose inhalers, have a

February 2020 DRUGSTORENEWS.COM

whole different set of requirements, separate and apart from typical generics. You have the look, the feel and the tactile experience of the product, which is quite different than a simple white pill generic drug.”

Other Ways to Grow

With the abundant challenges involved in delving into new therapeutic areas and formulations, generic companies are shoring up their chances for success by forming partnerships with established companies, making acquisitions or launching new companies. For instance, Aurobindo is in the process of acquiring the Sandoz U.S. generic oral solids and dermatological business. “This is going to greatly expand our core oral solids business and springboard us forward in the dermatology space. We’ll be the second largest oral solids and dermatology supplier in the United States once that transaction is complete,” McMahon said. Alembic also is gaining a stronger foothold in dermatological generics via Aleor Dermaceuticals, which is a 60/40 joint venture between Alembic and Orbicular Pharmaceuticals Technologies. In October 2019, the joint venture received the FDA’s approval for generic Clobex and generic Desonide ointment. Upsher-Smith entered into an exclusive

There has been an explosion of new generics players entering the U.S. market. The Food and Drug Administration is approving a record number of ANDAs. Three purchasers control more than 90% of the retail market. These three trends in the generics market are the most significant, according to Doug Long, IQVIA’s vice president of industry relations. “The generic market is much more crowded today, and there has been persistent generic price deflation over the past three-plus years. The oral solid market is the most crowded and suffers the most price deflation. You could say oral solids or pills is in many ways a commodity market,” Long said. What factors are driving generic companies’ expansion into new therapeutic categories and formulations? Long pointed out that many of the approved ANDAs are never marketed because there are too many players already marketing a particular molecule. “Many generic companies are moving up the value chain where the products are more difficult to make and there is less competition, for example injectables and transdermals,” he said. With the increasing complexity and difficulty of making these new generic products, Long said that companies will need new expertise. As he surveyed the future, Long said that with specialty drugs accounting for almost 50% of U.S. market dollar sales and the vast majority of new product approvals, there will be a tremendous need for specialty generics and biosimilars. “The industry is maximizing out on the traditional generic penetration,” he said. —Sandra Levy

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PHARMACY | GENERICS

agreement with an undisclosed pharmaceutical partner to market and distribute some select ophthalmic and otic abbreviated new drug application products. In 2019, UpsherSmith also added two newly acquired, FDAapproved sumatriptan products to its branded central nervous system. “The products are an excellent fit with our current [central nervous system] portfolio, and bring new dosage forms with their intranasal and injectable delivery, while also diversifying our portfolio beyond ANDA products,” Field said. “Upsher-Smith plans to strategically pursue acquisitions of generic and targeted brand opportunities that leverage our team’s commercial capabilities in both segments of the prescription drug market.” As more generics companies diversify their portfolios going forward, several executives said that by doing so they are ensuring that their customers have a steady

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February 2020 DRUGSTORENEWS.COM

supply of high-quality products. “With the organic growth that we’ve experienced, along with this transformational acquisition of the Sandoz business, we’ve become critically relevant to our customers,” McMahon said. “You can say that generics is a commodity business, but there’s many shades of gray along the way in terms of a company’s product offering, regulatory expertise, responsiveness and overall competitiveness. With this groundbreaking acquisition, Aurobindo sets itself apart from its competitors and becomes an even stronger partner for our customers.”

Helping the System

Generic companies that are focusing on new categories and formulations also are doing their part to avert the supply shortage problems that recently plagued the industry. Field said that while the FDA has been accelerating ANDA approvals, it also has seen

a record spike in ANDA withdrawals, and rapid competitive expansion has decreased price to a point where there are market shortages due to companies pulling unprofitable products off the market. These trends may create some new opportunities for nimble companies to enter new markets, expand market share of existing products and launch new competitive products, he said. “At a time when only 36% of FDA-approved ANDA products launched, we brought 75% of our approved ANDAs to market,” Field said. Customers have taken notice of generic companies’ efforts to mitigate supply issues, Alembic’s Kellum said. “Because of the high number of quality issues and strong oversight by the FDA, suppliers and customers have begun to appreciate that aspect of supply much more. It is a very competitive market, but there’s a newfound appreciation for consistency of supply and quality of supply.

It’s attractive for customers,” he said. What bold steps generics companies will take as we go forward is anybody’s guess, but one thing is certain, competition likely will not fade any time soon. Perhaps Field summed up what generics firms need to do best with this advice: “Companies that plan to thrive will focus on their strengths, seize opportunities that leverage these strengths, and be prepared to respond quickly to shifts in the market,” he said. “Success in the current environment requires discipline, focus and an eye for responsibly commercializing promising new product opportunities. And since no company has all of the answers or expertise in this dynamic market, the ability to form partnerships that capitalize on a company’s own strengths, while leveraging the expertise, capabilities and capacities of other organizations with different strengths is also key to sustaining growth.” dsn

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PHARMACY | NEWS

Pfizer To Launch Three Biosimilars Pfizer is set to introduce three new biosimilars this year. The company said it plans to launch Avastin biosimilar Zirabev (bevacizumab-bvzr), Rituxan biosimilar Ruxience (rituximab-pvvr), and Herceptin biosimilar Trazimera (trastuzumab-qyyp). The medicines are expected to launch at the lowest wholesale acquisition cost among all other bevacizumab, rituximab or trastuzumab products currently on the market, becoming available at a substantially discounted price to the originator product, the company said. Zirabev is indicated for the treatment of five types of cancer: metastatic colorectal cancer; unresectable, locally advanced, recurrent or metastatic non-squamous, non-small cell lung cancer; recurrent glioblastoma; metastatic renal cell carcinoma; and persistent, recurrent or metastatic cervical cancer. Ruxience is available for the treatment of adult patients with non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, and granulomatosis with polyangiitis and microscopic polyangiitis. Trazimera is indicated for the treatment of human epidermal growth factor receptor 2 overexpressing breast cancer and HER2 overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. “We’re proud to expand our leading biosimilars portfolio by launching these three treatments, which can potentially create significant savings for the U.S. healthcare system, while increasing access to critical therapies,” said Angela Lukin, Pfizer regional president of North America oncology. “We look forward to working with payers and providers to deliver these important medicines to patients that are living with certain cancers and autoimmune conditions.”

Alembic Gets Two Approvals The Food and Drug Administration has approved two Alembic generics, one tentatively. The company has received full approval for its generic of Allergan’s Viibryd (vilazodone hydrochloride tablets). The generic, which was approved in dosage strengths of 10 mg, 20 mg and 40 mg, is indicated for the treatment of major depressive disorder. Vilazodone hydrochloride tablets had a market value of $469 million for the 12 months ended September 2019, according to IQVIA. The FDA gave tentative approval to Alembic’s generic of Boehringer Ingelheim’s Jardiance (empagliflozin tablets). The drug, which is indicated for glycemic control in patients with Type 2 diabetes, along with diet and exercise, was approved in dosage strengths of 10 mg and 25 mg. The product had a market value of roughly $3.4 billion for the 12 months ended September 2019, according to IQVIA.

February 2020 DRUGSTORENEWS.COM

FDA Clears Valtoco Nasal Spray for Seizures Neurelis has received the Food and Drug Administration’s green light for Valtoco (diazepam nasal spray). The nasal spray offers a new on-hand rescue treatment option for patients outside of the medical setting, Neurelis said. Valtoco — indicated as an acute treatment of intermittent, stereotypic episodes of frequent seizure activity that are distinct from a patient’s usual seizure pattern in people with epilepsy age 6 years old and older — features a proprietary formulation of diazepam, using Neurelis’ transmucosal absorption enhancer Intravail. Previously, diazepam was only approved by the FDA in a rectal gel formulation. “Cluster or acute repetitive seizures are challenging to treat and highly disruptive in the lives of people with epilepsy,” said Neurelis president and CEO Craig Chambliss. “Valtoco was developed to provide an effective combination of reliability, safety and tolerability in a ready-to-use nasal spray. This is a defining moment for Neurelis as Valtoco is our first FDAapproved product. We are excited that we can now offer this treatment option to patients and provide additional support to the epilepsy community.” The approval was welcomed by physicians who treat patients with epilepsy. “This is an important development in the epilepsy community,” said R. Edward Hogan, director of the Washington University and Barnes-Jewish Epilepsy Center in St. Louis. “Most seizures that require intervention are treated in an inconvenient manner. To be able to reliably treat seizure activity when and where it happens with a caregiver-administered option like Valtoco is a significant step forward.”

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HEALTH | FEMININE HYGIENE

An Expanding Category Women are shopping for items beyond period products By Nora Caley

ho knew that feminine hygiene could be cool or edgy? Apparently, a lot of retailers and consumers. The result is that more merchants — from the likes of such trendy retailers as Urban Outfitters and Anthropologie to traditional mass retailers — are carrying feminine hygiene products to both satisfy consumer demand and build stronger ties with female consumers. The results have been a steady increase in product innovation, price points and, fortunately, profits for all involved. While being able to buy feminine care products online is nothing new, food, drug and mass retailers are realizing that women would rather buy certain products online or at the same stores where they can also purchase hoodies, beaded clutch purses and silk sleep masks. Even in today’s oversharing, taboofree environment, women might find the feminine hygiene section of their brick-and-mortar stores a bit uninviting. “The aisle is still the awkward aisle,” said Chia Chia Sun, founder and CEO of Torontobased Damiva. “The transformation of the feminine care aisle is definitely starting, which is super exciting, but it may not be fast enough for consumers.” The challenge to retailers, Sun said, is whether to think of feminine care as a necessity or as something that follows more of a beauty model. Tampons, pads and liners are commodities that consumers replenish regularly. Items such as wipes, sprays and bath bombs are not purchased as often. Retailers have to figure out how to choose new items, how to move legacy items and how to balance both. According to IRI, a Chicago-based market research firm, for the 52 weeks ended Dec. 1, sales of feminine needs products in U.S. multi-outlet stores — grocery, drug, mass

February 2020 DRUGSTORENEWS.COM

market, military and select club and dollar stores — totaled roughly $649.2 million, an increase of 2.3% compared with the same period the previous year. Sales of sanitary napkins and tampons totaled roughly $2.82 billion, up 1.3%, and sales of all other feminine hygiene/medical treatments totaled roughly $322.7 billion, up 5.7%. One way to grow the category is to focus on innovative products, including those that appeal to millennials. “Retailers are capturing more sales and profits by expanding shelf space for high growth segments, such as wash, wipes, spray and creams at the expense of slow growth/declining commodity segments,” said Keech Combe Shetty, CEO of Combe, which makes Vagisil. “Some of these commodity segments have very low in-store engagement, making them ripe for conversion to online subscriptions.” Combe has expanded the Vagisil Odor Block Intimate Wash line, and all the intimate washes, which are pH-balanced, hypoallergenic, dermatologist- and gynecologist-tested,

and free of parabens and methylisothiazolinone preservative, are now dye-free for 2020. “One notable trend is that the intimate health consumer is becoming more educated about her sexual and feminine health,” Combe Shetty said. “This has translated in the market as a demand for greater transparency in ingredients and proven track record of safety and efficacy.”

Natural Focus

Feminine care consumers are looking for safer products. “Women are more concerned than ever about not only the safety of the products they are using and putting into their bodies, but also the long-term effects of these products,” said Deeannah Seymour, CEO and founder of pH-D Feminine Health in Nashville, Tenn. Retailers have responded by adding alternatives. “You walk down the feminine care aisle of most retailers and see options that didn’t exist two or three years ago,” Seymour said. “Providing safer options is great for everyone.” The company makes boric acid suppositories

HEALTH | FEMININE HYGIENE

to help promote normal vaginal balance, and plans to launch a holistic feminine deodorant spray and an instant feminine odor vaginal rinse. “We are also launching a holistic alternative to NSAIDs for menstrual discomfort,” Seymour said. “Being a kidney donor, I can no longer take NSAIDs because of the renal side effects. I wanted to develop a product that is safe for everyone, including me.” Consumers are looking for natural options because they are concerned about chemicals in sanitary pads and other products. Holistic well-being is one filter in their purchase decisions, said Chit Itchon, head of marketing for the feminine care business unit at Shelton, Conn.-based Edgewell Personal Care. “They are looking for products that are safer for them and the environment, heightening concern on ingredient sourcing and processing.” Retailers have embraced the trend, Itchon said, by including these items in their assortments. “They also continually encourage manufacturers to be more transparent with product claims and formulations.” Recent legislation is helping to boost transparency in feminine care products. In 2019, New York became the first state to require all ingredients in tampons, pads and other menstrual products to be listed on the packaging. Other states likely will follow, said Helen

February 2020 DRUGSTORENEWS.COM

Robinson, co-founder of Organic Initiative, a New Zealand-based company with U.S. headquarters in Manhattan Beach, Calif. “Tampons and cups are classified as medical devices,” she said. “They’re not like body lotion or food that by law have to list ingredients.” Listing the ingredients will help consumers see, for example, whether sanitary pads are made entirely of organic cotton or if just the pad covers are organic cotton. “You’ve really got to read the fine print,” Robinson said. “Some retailers are really smart and have picked up on this.” Women also are looking for tampons that have applicators made from plant-based materials, and sprays and washes that are cruelty-free and have no dyes, parabens or MIT preservatives. Consumers are looking for products that are not harmful to their own bodies and that do not damage the environment.

Retailers Add Products

Another company with international presence is Genial Day, which launched in Europe in 2009 and has U.S. headquarters in Orland Park, Ill. Founder and designer Vilmante Markeviciene said the U.S. market is more open to new emerging brands of feminine hygiene products, “but competition is quite substantial, too.” Genial Day makes several

products, including pads with an anion strip, which the company said provides benefits through negative ions. In the United States, Markeviciene said, sustainability and health concerns are the most significant issues. “Retailers have to take that into account when choosing new products,” she said. “I believe they should look for more sustainable, healthy, transparent brands, which will help women to take care of their well-being and comfort during menstruation, also providing the best performance.” Retailers can benefit by expanding their sets with new products for not only menstruation but postpartum, soothing and cleansing. Atlanta-based The Honey Pot will launch a boric acid and herb vaginal suppository, as well as other herbal products this year. The company’s goal is to have a product in every subcategory in the feminine care aisle. “It’s about rounding out our collection to be able to serve our guests, our consumers that love our products,” said Beatrice Dixon, founder and CEO. Dixon also said that some retailers are willing to take a chance and add innovative feminine hygiene products to their assortments, while other retailers tend to wait and see how well the products perform at certain chains. “They don’t want to get something that fails,” she said. “They want to focus on the movers.” The retailers that do carry the Honey Pot’s herbal wipes, cleansers, creams, pads and organic tampons, merchandise the natural items in the same feminine care aisle as other products. “Everything is right next to each other, which is also really great,” Dixon said. Other legislation that will affect the feminine care category is the removal of the tampon tax, or the sales tax on feminine hygiene products. In recent years, New York, California, Illinois and other states have exempted menstrual products from sales tax, a change that advocates said can make the products more accessible for low-income consumers. The bigger trend, manufacturers said, is the continuing innovation in the feminine care category. “When I talk to buyers, they believe in five years feminine care will be the next CBD or the next organic, the next trend if you will,” said Damiva’s Sun. “I don’t think we will have to wait long. I’m definitely seeing an acceleration.” dsn

SELFCARE ROADMAP INSIGHTS

MDC | Retail Tomorrow and Hamacher Resource Group recently joined forces to bring to life the Selfcare Roadmap, a tool meant to identify opportunities, reveal how next practices can reshape the brick-and-mortar shopping experience, inspire new merchandising and service models, and provide impact across all aisles. The tool, which only is available to GMDC | Retail Tomorrow members, demonstrates how to optimize shoppers’ health, beauty, personal care and wellness experiences, as well as how to drive new avenues for profitability by offering more than 140 insights and infographics that can be sorted by category of self-care occasion. This month, the companies have shared insights with Drug Store News about the sleep category. dsn

Sleep Disorder

CONDITION INSIGHTS

Dental Night Guards 4%

Sleep Supports <1% Alertness Aids

Internal Analgesic + Sleep Aids 17%

27%

Key insight: While more than half of sales are sleep aids, 27% of sales in this category are for alertness aids.

INDIVIDUALS

18%

OF THE U.S. POPULATION

Key insight: More than half of the individuals with sleep disorders — 31 million Americans — suffer from chronic insomnia.

24% Cold & Allergy 44% Pain Relief TOP 3 COMBINED

81%

February 2020 DRUGSTORENEWS.COM

Nine of the top 10 cold and allergy items were nasal strips/anti-snore devices, contributing

61% of category dollar sales

NUMBER AFFLICTED

60M

TOP HEALTH & WELLNESS CATEGORIES IN BASKET

Sleeping Aid Supports 26%

Sleep Aids 25%

Sleep Disorder

CATEGORIES IN BASKET

13% Oral Care

SLEEP SUBCATEGORY SALES ACROSS ALL OUTLETS Sleep Ear Plugs 1%

Sleep Disorder

Key insight: Patients with sleep issues look to mouth guards and vitamins/supplements support in addition to sleep aids in the pain relief category.

DSN_WomensEdition_Ad_FinalPDF.indd 1

11/4/19 3:46 PM

HEALTH | FEMININE HYGIENE PRODUCTS

Genial Day Adds Products Genial Day now offers Period Panties, organic cotton underwear with doublecrotch functionality. Period Panties are made with Silverplus technology, which bonds with textile without the use of any additional chemicals or bonding materials, and the silver finish stays on after multiple washing cycles. The fabric is environmentally friendly, as well as skin friendly. Also new from Genial Day is size small menstrual cups made of medical-grade TPE hypoallergenic material. It is the brand’s smallest cup, designed for teens or petite women with light periods.

Vagisil Unveils Line of Sprays, Wipes

Carefree Launches Breathe Edgewell Personal Care expands its Carefree brand with Carefree Breathe, a new line of skinfriendly pads and liners. The air-infused cover goes beyond leak protection and keeps skin dry and irritation-free. The pads and liners are clinically tested to meet the ultimate sensitive skin standards, and are free of fragrances, dyes and harsh irritants.

February 2020 DRUGSTORENEWS.COM

Building off the strength of Vagisil Odor Block Intimate Wash, the brand introduced line extensions in sprays and wipes. Vagisil Odor Block Dry Wash spray and Vagisil Odor Block daily freshening wipes bring patented Odor Block technology to these segments, adding to the brand’s Intimate Wash and Deodorant Powder for malodor prevention ability. To continue the momentum and success of the Vagisil Sensitive Scents line, the brand added a new fragrance, Cucumber Magnolia, to the lineup that already includes Peach Blossom, Spring Lilac and White Jasmine. A new sub-brand, OMV! by Vagisil, features a line of intimate products specifically for teens, including a gentle, clear intimate wash in a distinct pump bottle; petite and discreet mini wipettes for on-the-go jaunts, and a bikini anti-itch serum, all with a vanilla clementine scent.

The Honey Pot Extends Line The Honey Pot has added several products to its lineup. Its new menstrual cups are made with medical-grade silicone for a flexible, softer feel that adjusts to the body. They are available in two sizes and are priced affordably for the consumer who prefers a sustainable option. The company also has introduced Organic Tampons with Bioplastic Applicator, which signals a switch from natural tampons to certified organic tampons with a bioplastic applicator derived from sugarcane. The applicator is compostable and will decompose in a landfill within two months. The tampons are available in a regular, super, or duo pack of 18 per pack. The duo pack contains nine regular and nine super tampons. The Honey Pot’s Soothing Lavender Vulva Cream calms irritated itchy skin with natural, healthy hydration, featuring lavender, mint and coconut oil. Its Boric Acid & Herbs Suppositories relieve the discomfort associated with bacterial vaginosis and yeast with a seven-day suppository treatment system. For on-the-go consumers, the company launched a Travel Pack of Pantiliners, a handy resealable travel pack that includes one regular, one super and one overnight herb-infused pad — all of which have wings.

Under the Influence As beauty influencers grow in number and celebrities get in on the game, how can they remain effective marketing tools? By Seth Mendelson

lain and simple, influencers have rewritten the rules of marketing the beauty segment. Brands used to spend millions to create a buzz for a new item. Today, with one post, consumers may flock to a new lipstick or shampoo they see or hear about on Instagram or YouTube. But are the social stars losing their luster — especially as they fight among themselves? Have they sullied their reputations with too many ads? Are celebrities reclaiming territory that was once theirs when they were the ones whose influence used to move the sales needle? Buckle your seat belts, as these are just a few of the questions the industry faces as it gears up for a new year and still more constant change in the way consumers buy merchandise. Many suppliers are putting their faith in the power of influencers. Just last November, for example, Coty got involved with Kylie Jenner, perhaps the most important influencer in the business, by acquiring a majority stake in Kylie Cosmetics in a deal that valued the company at $1.2 billion. Kylie Cosmetics brings about $200 million in annual sales to the Coty financial ledger, up 40% over 2018 levels. Coty CEO Pierre Laubies said the brand delivers younger shoppers obsessed with Kylie Jenner’s every move. Part of the deal is that Jenner, who maintains a 49% share, will stay on as a creative force. She has not eased off posting since the Coty deal was announced.

February 2020 DRUGSTORENEWS.COM

Instead, she is amplifying her voice and launching a collection inspired by her 1-yearold daughter Stormi. Coty CFO Pierre-André Terisse succinctly summed up why Coty was willing to shell out big bucks for the brand, which it has renamed Kylie Beauty. “With a single post, she’s able to reach more than double the number of people who watch the Super Bowl every year,” he said in an analyst call. Coty, which still is digesting the 41 brands it bought from Procter & Gamble, plans to expand the brand internationally and extend into other categories. Coty will act as the licensee for skin care, fragrance and nail polish

— categories where Coty has expertise. Jenner already has a successful skin care collection in her arsenal. “In May, Kylie Skin sold out in 10 hours and is on track to produce $25 million in 2019,” said Terisse, who added that 50% of its sales were repeat purchases. “The brand has moved from cosmetics to skin care with so much success,” he said. “We don’t see signs that this will not be a sustainable brand.” Jenner is not the only powerful name in beauty, though. Numerous other influencers post both organic and paid advertising for beauty brands. Many even collaborate on collections, especially palettes that fly out of the stores. Among the biggest names are James

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Charles, Bretman Rock, Kandee Johnson, Jefree Star, Tati Westbrook, Patrick Starrr and Jaclyn Hill. Some collections are so popular people line up overnight and are even left crying when the item sells out. Influencers, such as Jaclyn Hill, also have their own brands, but they do not always fare well as she found out when social media posts called out production flaws in her namesake brand. She had to pull the line off the market to reboot. The mass market industry benefits from tutorials from popular YouTubers who often devote entire tutorials to a look accomplished entirely “with drug store” makeup. Some of the popular brands used include e.l.f, Nyx and Wet ‘n’ Wild. Not all of the publicity generated by social stars is positive. The influencer community came under the microscope last year as several of the most visible figures had public

Eye on the Future

NPD HIGHLIGHTS POTENTIAL 2020 BEAUTY TRENDS

When it comes to predicting beauty trends, NPD Group has a pretty good track record. The company foresaw the past year’s slowdown in makeup sales, the rise of natural and the bounce in hair care sales. Now NPD vice president and industry adviser for beauty, Larissa Jensen is gazing into her crystal ball to reveal the biggest trends for the next decade. Just as she foresaw a downturn a year ago looming in color makeup, Jensen thinks consumers are ready to cycle back. That’s good news for the mass market, which plays a dominant role in selling makeup. “Makeup is expected to come back in 2021, based on historical cycles between the skin care and makeup categories, which typically last between four and five years,” Jensen said. “If history repeats itself, we are looking at a rebound in the category sometime around 2021, give or take a year.” Retailers also noticed that people are ready to refresh their supplies, as well as an influx of new colors this year — especially blue tones. Skin care, the category that has been propelling overall beauty growth, might hit a bump in the road because the fast-growing natural sector is becoming crowded. Natural has seen serious gains over the past year, with Nielsen data showing sales in mass stores growing at an 8.7% rate versus overall conventional health and beauty gains of 1.2%. Trend watcher Grand View Research estimated last April that clean beauty will generate nearly $25 billion in 2025. Yet, Jensen foretells a slowdown in natural skin care caused by

February 2020 DRUGSTORENEWS.COM

confusion in the market over such key words as natural, organic and clean. There also are so many brands with natural positionings. She also said there is lingering consumer disappointment in the payoff, especially with natural cosmetics brands. That said, however, she is banking on a consumer movement that will demand more sustainability from brands. Sustainability will be discussed at every top-totop beauty meeting this year, experts said. “Sustainability concerns are likely to run the gamut from packaging to ingredients,” Jensen said. “There are many ways to get tied up in it — you could have sustainable packaging, but an ingredient might not be sustainable.” Beauty routines, which have expanded with the growth of multistep regimens and facial masks, are creating more waste, Jensen said. And, experts said, people are good about recycling kitchen products; not so much bathroom empties. The beauty industry is working to change that through educational efforts. Already companies are looking to close the recycling loop, adding more refillable packages and glass containers, and partnering with companies like TerraCycle. Ingredient-wise, waterless formulas are emerging to lessen the use of water. For example, Procter & Gamble is making products intended to help cut out showers — especially since consumers are washing their hair less frequently. Target has its Spring & Vine lineup, which uses 98% less water than traditional shampoos. —Seth Mendelson

INFLUENCER MARKETING

fights. Negative publicity is not always what a brand wants. One high-profile squabble was between Charles and Westbrook. Charles, who skyrocketed to fame after CoverGirl named him the brand’s first male spokesmodel in 2016, and Westbrook had a public feud that started over a gummy vitamin post and quickly escalated, resulting in Charles losing about 3 million subscribers (he has since gained many back) while Westbrook gained nearly 4 million. Two social media watchdog sites, Estee Laundry and Hereforthetea2, are calling out influencers for everything from cultural appropriation to “greenwashing.” When brands launch products claiming to be vegan or clean, users dig into ingredients and call out ones that don’t make the grade. Social

media watchdog sites, whose posts are penned anonymously, have even convinced brands to change what they consider offensive product names and advertising campaigns. Beyond controversy on social sites, influencers have lost some credibility because of sponsorships. Many marketers are shifting to micro influencers (those who have between 1,000 and 10,000 followers), who have higher trust and better engagement with followers. Maesa takes great care to find influencers who are aligned with their product positioning. For example, Maesa and Walmart’s newest exclusive brand, Hairitage, is in partnership with Mindy McKnight, known for her YouTube channel CuteGirlsHairstyles. Scott Oshry, Maesa’s chief marketing officer, said McKnight has shied away from teaming up with a brand in the past. “She was waiting for the right brand, and this was it,” he said of the hair care line, which addresses all hair textures. Influencers have worked well in the past for Maesa — the Kristin Ess line sold at Target is a $100 million-plus franchise. The entire influencer ecosystem also could be rocked with major changes in social media trends. Instagram growth has slowed, and there is a huge buzz around TikTok. A recent report from eMarketer noted that Instagram is losing relevance, which it suggested could be from the bevy of paid posts and drama. Instagram’s U.S. user growth rate fell from 10.1% in 2018 to 6.7% in 2019, the first time that rate reached a single-digit pace, according to eMarketer’s report — “Instagram User

Growth in the US Will Drop to Single Digits For the First Time.” The market research company predicted that Instagram’s growth rate will drop to 4.5% in 2020 and continue to decline throughout the next few years. Before there were social tastemakers, however, there were celebrities who liked to get behind beauty products. They were nudged out by influencers who consumers felt really knew products rather than the stars who they felt just “slapped” their names on fragrances or cosmetics. Now famous faces are borrowing a page from influencers and co-creating beauty brands with leading marketers. Tracee Ellis Ross just launched Pattern, a hair line in conjunction with Beach House, a brandbuilding firm. Taraji P. Henson, who was cooking up her own scalp care in her kitchen, has teamed up with Maesa for a line called TPH. “Stranger Things” star Millie Bobby Brown recently worked with the Beach House Group on a beauty line exclusive to Ulta Beauty called Florence by Mills. Shaun Neff, co-founder of the Beach House Group, sais what’s different about this go around with celebrities is that products are made and then matched with the right star. “We’re not here just to make products for celebrities. We pick celebrities who resonate with the brand,” he said. Neff’s blueprint for brand success is for stars to stick with what they do best. “All of the kids are so smart these days and see through things. They know people are paid to post. Stay in your lane and only sell what makes sense,” he added. “If a celebrity is known for cooking, they shouldn’t start talking about trucks.” Several brands that never had famous faces are giving stars a spin. Clinique, for example, just signed Emilia Clarke as its first global brand ambassador. In the past Clinique relied on models for its campaigns. Whether an influencer or star, Stephanie Wissink, managing director of investment banking firm Jefferies, cautioned that a lot rides on the behavior of the person touting a brand. “Despite the benefits, there are numerous risks with celebrity brands, such as faddish affinity value, unpredictable behavioral risks and lifecycle changes,” she said. “Protecting authenticity and driving repeat purchase can prove a challenge.” dsn

DRUGSTORENEWS.COM February 2020

REX AWARDS 2020: PRIVATE LABEL

What’s in a Name? Without the expertise and experience of suppliers, private label would not be on the elevated path it is today By Carol Radice

rivate-label products are getting so popular with consumers that price seems to be taking a back seat to innovation. The result, some industry officials said, is higher price points for the best merchandise and higher profits for retailers and the supplier. Nielsen recently highlighted this trend, dubbing it the “premiumization of private label,” in a recent report. The Chicago-based market research firm concluded that the introduction of higher-end privatelabel offerings directly is tied to the rising consumer interest to place more store brands in their baskets. Recognizing the value private label offers — not just with price, but with what their brand name stands for — several prominent food and drug retailers have announced plans to expand their private-label offerings even more this year, a move experts agree will help solidify customer loyalty, among other things. While many of the manufacturers behind these products prefer the spotlight to be on retailers, which is understandable, some companies still stand out in a crowd. The following are the winners of DSN’s Retail Excellence Award, or REX, for private-label innovation.

state-of-the-art equipment to ensure immediate turn around, and U.S.based testing of its products. Other ways the company stands apart is producing quality products and abiding by industry standards, regulations and social compliance. It’s clear that Calico products offer value and cost savings, and its knowledge of the category and industry is bar none. “We know the importance of both giving our existing clients a reason to continue to work with us and the need to attract new clients with our offerings,” said a marketing department official at the Ontario, Calif.-based company. “Innovation allows us to stay ahead of the competition and differentiate ourselves, while also showing adaptability to keep up with current trends.” Offering the best lighter products in the industry, the official said, is the company’s inspiration to continue paving the way for new product innovation in the utility lighter and pocket lighter category. “Our product innovations continue to set new category standards of excellence and be a catalyst for our growth and success in the marketplace,” the official said.

Camber Consumer Care

Camber Consumer Care, a division of Camber Pharmaceuticals USA, is owned by Hetero Labs, a Hyderabad, India-based company. In 2018, Hetero gained Food and Drug Administration approval

Calico Brands

To stand out in the lighter category, Calico Brands focuses on innovation and is introducing a steady stream of products each year. As one of the largest manufacturers and distributors of disposable lighters, the company’s full-service business operations include a packaging and warehouse facility, in-house packaging design department,

February 2020 DRUGSTORENEWS.COM

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REX AWARDS 2020: PRIVATE LABEL

for fexofenadine, a 24-hour allergy medicine, which was the first OTC vertically-integrated product launched by Camber Consumer Care. In addition to fexofenadine, Camber Consumer Care’s product line includes cetirizine HCl, cetirizine HCl solution, guaifenesin, ibuprofen soft gel caps, children’s ibuprofen suspension in four flavors, loratadine, and naproxen sodium. “Camber Consumer Care’s goal is to become a strategic supplier to retailers demanding a quality-driven, reliable and responsive OTC store brand source,” said Vic Mazzacone, vice president of sales at the Piscataway, N.J.- based company. Next in line for ANDA approval in 2020 is the first Camber OTC GI product, Omeprazole, which also will be vertically integrated. “Our mission is to provide a focused and reliable supply of over-the-counter drugs to the marketplace, creating value for our partners and savings for the consumer,” Mazzacone said.

Chase Products

Chase Products offers a wide range of domestically made privatelabel aerosol items, including cleaning, craft and paint-based products. The company’s three prong strategy for success focuses on leveraging its experience, integrity and quality. By taking the specific needs of each retailer to heart and offering flexible order minimums and lead times, the Broadview, Ill.-based company’s business has grown substantially over the years. Introducing customer-driven products is an important part of the company’s success formula. Armed with 80 years of knowledge and the data to identify emerging consumer trends, Chase Products structures and prices its product lines to meet ongoing retailer needs. Its Home Value line, for instance, offers a wide range of effective, attractively priced national brand equivalent household and personal care products. One of the company’s more recent introductions is Clean Home, a line of disinfectants designed to tackle cold and flu viruses, as well as most common household and workplace germs. In the private-label arena, aerosol products are solidly positioned in terms of consumer satisfaction and environmental soundness. To ensure repeat sales and create satisfied customers, Chase Products offers its products by creating effective, economical and convenient programs.

February 2020 DRUGSTORENEWS.COM

Edgewell Private Brands Group

Located in Cedar Knolls, N.J., Edgewell Private Brands Group is best known for its portfolio of wet shaving products. Its focus on delivering world-class quality, innovation and product performance that delivers against shoppers’ increased expectations, plays a defining role in helping the company differentiate itself from the competition. With roots dating back to 1875, Edgewell Private Brands Group has a long history as a pioneer in the wet shaving category. As part of the Edgewell Personal Care business, the company’s commitment to quality and innovation has never been stronger as it continues to expand its portfolio of products. Tom Parker, senior channel manager, said being flexible and responsive to retailer and consumer requirements, having access to the quality standards and manufacturing processes of a branded CPG company, investing in technology, and offering custom product portfolios, as well as having their pulse on category insights, have helped the company become the top supplier of private-label shaving products in the United States. “We work closely with our retail partners to bring innovative, high-quality shave assortments that drive shopper loyalty and trust,” Parker said. “Whether helping to create an efficient national brand equivalent portfolio or a more differentiated approach to a winning private brand program, we are able to meet every consumer need.” To help retailers deliver consumer value in the months and years ahead, Parker said the company will continue to expand its private brand razors through quality enhancements and product innovation.

Garcoa

Throughout the last 37 years, Garcoa Laboratories has established itself as the premier liquid personal care product manufacturer. From hair, face, body, skin, foot care and topical analgesics to baby care products, the Calabasas, Calif.-based company maintains a high level of integrity in everything it does. The company’s formula for success combines offering exceptional innovation, quality, performance, design and value in each product that it manufactures. Garcoa’s ability to provide turnkey programs that include concept, formulation, packaging development and procurement has made the company a standout in the private label manufacturing space.

INDUSTRY AWARDS PROGRAM Drug Store News is proud to recognize, celebrate and honor women making outstanding contributions to their companies and the industry. More than 140 women were honored November 2019 at the inaugural Top Women in Health, Wellness and Beauty event and gala. Winners were awarded in the categories of Career Achievement, Business Excellence, Commitment to Care and Rising Stars.

Who will be honored in 2020? Visit www.dsntopwomen for updates on timing for nomination opening in the spring and details on the gala event in the fall of 2020. Follow us on

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REX AWARDS 2020: PRIVATE LABEL

The company said its vertical integration gives it the unique ability to identify and establish trends, incubate programs for retail channels, and manufacture products that feature cuttingedge formulations. As Ritchie Rubin, executive vice president, said to DSN this past year, the company invests a substantial amount of time interpreting consumer needs so that they can better understand where opportunities lie. He said the company always is looking for something new or different that delivers value and enhances or simplifies life. Once that is identified, the company quickly can respond with products that address these needs.

Global Tissue Group

Medford, N.Y.-based Global Tissue is best known for its three-tier private-label household paper products, which include paper towels, facial tissues, napkins and bath tissue. The privately owned family business focuses on being responsive to retailers’ needs and fosters a culture of constant improvement and entrepreneurship. Global Tissue Group’s commitment to innovation has made it one of the top paper companies in the industry. What helps the company stand out is having a total quality policy for all facets of its business from its products and customer service to innovation and product development. Flexibility has been the company’s key to growth since its inception. By working closely with its retail partners, Global Tissue has the ability to offer a wide range of products that effectively compare with national brands. Through its advanced retail visualization and customization capabilities, as well as its creative team that can design eye-catching packaging, Global Tissue has become a preferred household paper supplier to supermarkets, drug chains and mass discounters. A statement from Philip Shaoul, president and COO, posted on Global Tissue’s website, sums up the company’s approach succinctly: “The purpose of our business is to profitably create experiences so compelling to consumers that store brand loyalty becomes assured.”

LNK International

LNK is the largest privately held OTC pharmaceutical product company in the United States. The company is a leading player in the solid dose and liquid dose cough-cold/allergy/sinus, gastrointestinal and analgesic products categories. In total, the company produces more than 150 pharmaceutical

February 2020 DRUGSTORENEWS.COM

formulas, almost all of which are produced in its Hauppauge, N.Y. facilities. To control the quality of its products and keep costs down, LNK has a hand in every step of the manufacturing process from acquisition of raw materials to production and distribution. Speed to market is another quality that helps the company stand out. Its company leaders understand that at the end of the day, its products not only need to work for consumers, but also need to stand out on the shelf. For these reasons, the company heavily invests in product packaging to ensure consumers take notice. Additionally, as part of the company’s commitment to quality, it focuses on offering products that will meet or exceed statutory and regulatory requirements. They achieve this through a culture of continuous improvement and by developing strong relationships with retailers and suppliers.

OraLabs

With a focus on producing quality personal care products, OraLabs is best known for its branded and private-label lip care, breath freshener, sunscreen, hand lotion and hand sanitizer offerings. The company specializes in custom formulations, testing, packaging and fulfillment. Whether retailers want to make an adjustment to one of OraLabs’ current formulas or want a completely customized, proprietary formula, its R&D departments can develop tailored products that match what retailers need to compete. Investing in high-speed automation has enabled the Parker, Colo.-based company to offer quality products at competitive price points. For instance, its lip balms are made with a proprietary, state of the art hot fill process that allows the company to offer them in a variety of forms and sizes.

Profoot

Profoot began operations in 1986, and since then it has grown to become one of the leaders in the foot care business, producing products that address a range of foot concerns. The company is most known for its insoles and inserts, as well as ball of foot and heel pain relief products. Although the Elizabeth, N.J.-based company sells foot care under its own Profoot label brand, over the years it has developed a strong private-label presence, as well. Taking the knowledge of how to create, support and grow products, and marrying that with innovation and creativity, the company successfully has leveraged that expertise with its privatelabel offerings. dsn

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LAST WORD

The New Age of Retail Partnerships From omnichannel to procurement, partnering is now an imperative By David Orgel

P David Orgel is an awardwinning business journalist, industry expert and speaker. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.

artnerships can be fraught with uncertainty for retailers. A lot can go wrong quickly. Nevertheless, in a transforming retail business, there’s more risk in avoiding partnerships than in embracing them. Increasingly, retailers can’t go it alone and still achieve their goals. Retail now relies on an interconnected set of partnerships to move the business forward. Partnering is now an imperative, but it needs to be done well. The retail industry has witnessed a mind-blowing number of partnerships in the last few years, in all shapes and sizes. The arrangements range from relatively informal collaborations to deep relationships (which is why the word partnership itself may be too general). Partnerships target a range of goals, from boosting retailer omnichannel and procurement capabilities to enhancing consumerfacing experiences. They impact the largest and the smallest of retailers and increasingly transcend traditional boundaries of competition.

Retail now relies on an interconnected set of partnerships to move the business forward. Partnering is now an imperative, but it needs to be done well. Let’s face it. Retailers tap into partnerships because they don’t have the capabilities to overcome challenges by themselves. That’s why Albertsons and Takeoff Technologies late last year announced a “strategic partnership focused on the future of grocery e-commerce.” The effort, which broadened an existing arrangement, centers on developing micro-fulfillment centers for order fulfillment. Albertsons’ president and CEO, Vivek Sankaran, explained the value of the partnership in no uncertain terms. “In working with Takeoff, we can evolve how the MFC ties into our store and e-commerce ecosystems and accelerate our path to best serve our customers.” Another partnership brought together two highprofile retailers — Kroger and Walgreens — in

February 2020 DRUGSTORENEWS.COM

a sourcing arrangement that crosses traditional competitive lines. In December, the companies unveiled a venture called Retail Procurement Alliance to achieve “purchasing efficiencies, lower costs and combined resources to help drive further innovation.” The effort builds on a relationship developed in the past couple of years that led to the Kroger Express concept in some Walgreens stores and a curated assortment of Walgreens health and beauty products at some Kroger stores. Meanwhile, retailers are embracing programs with the biggest technology companies when it boosts customer experience and competitive advantage. Walmart has partnered with Apple to make its voice order grocery shopping service available on Siri. As reported in DSN, customers can use a new Siri shortcut for online grocery to start adding items directly to their Walmart online grocery cart, after they’ve paired their accounts. As DSN reported, Walmart is expanding its voice-activated grocery shopping capabilities as the company’s chief rival Amazon makes inroads in both the grocery and voice technology spaces. Partnerships also are useful in making progress with cutting-edge technologies just now taking off — literally. CVS Health and UPS Flight Forward, a unit of UPS, said they have agreed to develop a range of drone delivery use cases, including business-to-consumer operating models. The focus will include delivery of prescriptions and retail products from retail stores to customer homes. These examples help underscore that retailers need to embrace partnerships when they can’t achieve goals on their own. More and more, partnerships aren’t just to achieve a result, but to first identify a road map for success. All the typical rules of collaboration apply, such as to carefully consider partners in advance and to pull out as quickly as possible if things aren’t going well. However, today partnership success is more likely to keep getting redefined in real time. That’s because given the retail industry’s transformation, the goalposts keep moving. dsn

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