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Private Label OTC Healthcare - US - September 2010

While the recession has put a halt to sales growth in many large CPG product categories, overall sales of over-the-counter (OTC) remedies have continued to grow at a slow, steady pace over the last few years. Market share for lower-priced private label products, however, have risen sharply. The economic downturn has been a boon for store brand OTC remedies, but other factors are at play as well.

This report explores the OTC market for various healthcare items as a whole, with particular focus on the share accounted for by private label. Included in the report are:

  • Analysis of sales and market share trends for both national brands and private label OTC remedies
  • Overall category and private label trends by retail channel
  • An examination of different approaches to private label branding and promotion undertaken by leading private label OTC retailers
  • Mintel’s exclusive research exploring consumers’ attitudes and behaviors concerning the OTC healthcare remedy category in general, with a specific look at attitudes toward private label remedies

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Market at a glance: OTC market grows, but private label grows faster
                        • Drug stores set the pace in private label OTC sales
                          • Private label sales surpass all national brand manufacturers
                            • Different dynamics in each segment impact private label share
                              • Major drug chains top the list in new product introductions
                                • OTC remedies—branded and private label usage
                                  • Private label perceptions
                                  • Insights and Opportunities

                                    • A matter of trust
                                      • Holistic wellness a private label opportunity for supermarkets
                                        • A common sense cure to cough/cold confusion
                                        • Inspire Insights

                                            • Trend: Boom Comes to an End
                                            • Market Size and Forecast

                                              • Key points
                                                • OTC market maintains momentum in recession
                                                  • OTC healthcare sales and forecast
                                                    • Figure 1: FDMx sales and forecast of OTC healthcare products, at current prices, 2005-15
                                                    • Figure 2: FDMx sales and forecast of OTC healthcare products, at inflation-adjusted prices, 2005-15
                                                  • OTC healthcare sales—total market vs. private label
                                                    • Private label capturing category growth
                                                      • Figure 3: FDMx sales of OTC healthcare—total vs. private label, 2005-10
                                                    • Private label OTC healthcare sales and forecast
                                                      • Figure 4: FDMx sales and forecast of private label OTC healthcare products, at current prices, 2005-15
                                                      • Figure 5: FDMx sales and forecast of private label OTC healthcare products, at inflation-adjusted prices, 2005-15
                                                  • Segment Performance

                                                    • Key points
                                                      • Economy and other factors boost private label across all segments
                                                        • Private label OTC healthcare sales, by segment
                                                          • Figure 6: FDMx private label sales of OTC remedies, by segment, 2009 and 2010
                                                      • Segment Performance—Cold/Allergy/Sinus Remedies

                                                        • Key points
                                                          • Zyrtec switch fuels growth
                                                            • Figure 7: FDMx sales of cold/allergy/sinus remedies—total vs. private label, 2005-15
                                                        • Segment Performance—Internal Analgesics

                                                          • Key points
                                                            • Tylenol’s 2010 troubles present opportunity for private label
                                                              • Figure 8: FDMx sales of internal analgesics—total vs. private label, 2005-10
                                                          • Segment Performance—Gastrointestinal Remedies

                                                            • Key points
                                                              • Rx-to-OTC switches drive segment growth and create opportunity for PL
                                                                • Figure 9: FDMx sales of gastrointestinal remedies —total vs. private label, 2005-10
                                                            • Segment Performance—Cough/Throat Remedies

                                                              • Key points
                                                                • Steady gains in last three years, but PL still lower than in other segments
                                                                  • Figure 10: FDMx sales of cough/throat remedies—total vs. private label, 2005-10
                                                              • Retail Channels

                                                                • Key points
                                                                  • Drug stores set the pace in private label OTC remedies
                                                                    • Channel sales and trends
                                                                      • Figure 11: FDMx sales of private label OTC healthcare remedies, 2005-10
                                                                      • Figure 12: Drug and other FDMx share of FDMx sales of private label OTC healthcare remedies, 2005-10
                                                                    • Drug stores and Walmart claim the most OTC shoppers
                                                                      • Figure 13: OTC remedy purchase locations, by age, July 2010
                                                                  • Retail Channels—Drug Stores

                                                                    • Key points
                                                                      • Private label drives OTC growth in drug stores
                                                                        • Drug store private labels extend beyond OTCs
                                                                          • Drug stores sales of market
                                                                            • Figure 14: Drug store sales of OTC healthcare remedies, total vs. private label, 2005-10
                                                                        • Retail Channels—Other FDMx Channels

                                                                          • Key points
                                                                            • Private label sales rise steadily, but more slowly than in drug stores
                                                                              • Target’s up & up on the rise
                                                                                • Other FDMx sales of market
                                                                                  • Figure 15: Other FDMx sales of OTC healthcare remedies, total vs. private label, 2005-10
                                                                              • Brands vs. Private Label—Overview

                                                                                • Key points
                                                                                  • Private label sales surpass all national brand manufacturers
                                                                                    • Key brand and private label sales
                                                                                      • Figure 16: FDMx top brands and private label sales of OTC healthcare remedies, 2009 and 2010
                                                                                  • Branded vs. Private Label—Cold/Allergy/Sinus Remedies

                                                                                    • Key points
                                                                                      • J&J recall accounts for some of private label’s rise
                                                                                        • Economizing and Zyrtec’s lack of exclusivity factor
                                                                                          • Manufacturer and brand sales of cold/allergy/sinus remedies
                                                                                            • Figure 17: FDMx top brand and private label sales and market share of cold/allergy/sinus remedies in the U.S., 2009 and 2010
                                                                                        • Branded vs. Private Label—Internal Analgesics

                                                                                          • Key points
                                                                                            • Private label benefits from J&J recall
                                                                                              • Manufacturer and brand sales of internal analgesics
                                                                                                • Figure 18: FDMx top brand and private label sales and market share of internal analgesics in the U.S., 2009 and 2010
                                                                                            • Branded vs. Private Label—Gastrointestinal Remedies

                                                                                              • Key points
                                                                                                • Private label jumps when exclusivity runs out for Rx-to-OTC switches
                                                                                                  • Only a few, mostly new, national GI brands make gains
                                                                                                    • Manufacturer and brand sales of gastrointestinal remedies
                                                                                                      • Figure 19: FDMx top brand and private label sales and market share of gastrointestinal remedies in the U.S., 2009 and 2010
                                                                                                  • Branded vs. Private Label—Cough/Throat Remedies

                                                                                                    • Key points
                                                                                                      • Strong claims and sensory experiences insulate brands from private label
                                                                                                        • Manufacturer and brand sales of cough/throat remedies
                                                                                                          • Figure 20: FDMx top brand and private label sales and market share of cough/throat remedies in the U.S., 2009 and 2010
                                                                                                      • Brand Qualities and Innovation

                                                                                                        • Major drug chains top a varied list of private label OTC retailers
                                                                                                          • Figure 21: Private label OTC remedy* new product launches, by year and company, 2005-10
                                                                                                        • Branding strategies key to private label OTCs
                                                                                                          • For CVS, private label carries the CVS brand
                                                                                                            • Target includes OTCs in up & up rebranding
                                                                                                              • TopCare brand promoted by Topco coop members
                                                                                                                • A&P creates Live Better! brand for OTCs and personal care
                                                                                                                • OTC Remedy Purchase

                                                                                                                  • Key points
                                                                                                                    • Pain relievers and cold/allergy/sinus medications used most widely
                                                                                                                      • Figure 22: OTC remedies bought in the past year, by gender and by age, July 2010
                                                                                                                      • Figure 23: OTC remedies bought in the past year, by household income, July 2010
                                                                                                                      • Figure 24: OTC remedies bought in the past year, by household size, July 2010
                                                                                                                    • Use of private label widespread in most OTC remedy segments
                                                                                                                      • Figure 25: Purchase of private label OTC remedies, by gender and by age, July 2010
                                                                                                                    • Private label savings appeal to all income levels
                                                                                                                      • Figure 26: Purchase of private label OTC remedies, by household income, July 2010
                                                                                                                  • Attitudes towards OTC Remedies in General

                                                                                                                    • Key points
                                                                                                                      • Satisfaction predominates
                                                                                                                        • Young adults on the lookout for new, more likely to seek and share info
                                                                                                                          • Figure 27: Attitudes towards OTC remedies, by age, July 2010
                                                                                                                        • Interest in new products high among parents with kids at home
                                                                                                                          • Figure 28: Attitudes towards OTC remedies, by presence of children in household, July 2010
                                                                                                                      • OTC Remedy Purchase Behaviors

                                                                                                                        • Key points
                                                                                                                          • Brand familiarity guides many OTC remedy purchases
                                                                                                                            • Well-known national brands provide a frame of reference for store brands
                                                                                                                              • Price promotions an influence for a few
                                                                                                                                • Figure 29: OTC remedy purchase behaviors, by type of remedy, July 2010
                                                                                                                            • Attitudes towards Private Label OTC Remedies

                                                                                                                              • Key points
                                                                                                                                • Users give private label OTCs high marks on effectiveness
                                                                                                                                  • Trust in private label OTCs increases with age
                                                                                                                                    • Figure 30: Attitudes towards private label OTC remedies, by age, July 2010
                                                                                                                                  • Private label’s common-sense appeal cuts across all income levels
                                                                                                                                      • Figure 31: Attitudes towards private label OTC remedies, by household income, July 2010
                                                                                                                                  • Reasons for Not Buying Private Label OTC Remedies

                                                                                                                                    • Reasons for not purchasing private labels appear not deeply held
                                                                                                                                      • Figure 32: reasons for not buying private label OTC remedies, by age, July 2010
                                                                                                                                  • Impact of Race and Hispanic Origin

                                                                                                                                    • Use of OTCs widespread across groups
                                                                                                                                      • Figure 33: OTC remedies bought in the past year, by race/Hispanic origin, July 2010
                                                                                                                                    • Blacks considerably less likely to use store brands
                                                                                                                                      • Figure 34: Purchase of private label OTC remedies, by race/Hispanic origin, July 2010
                                                                                                                                    • Blacks, Hispanics more likely to trust national brands over store brands
                                                                                                                                      • Figure 35: Attitudes towards private label OTC remedies, by race/Hispanic origin, July 2010
                                                                                                                                    • Hispanics look for new remedies, exchange advice among family, friends
                                                                                                                                      • Figure 36: Attitudes towards private label OTC remedies, by race/Hispanic origin, July 2010
                                                                                                                                    • Black non-PL users buy national brands in spite of perceived efficacy equivalence
                                                                                                                                      • Figure 37: Reasons for not buying private label OTC remedies, by race/Hispanic origin, July 2010
                                                                                                                                  • Cluster Analysis

                                                                                                                                      • Store Brand Supporters
                                                                                                                                        • Characteristics
                                                                                                                                          • Opportunity
                                                                                                                                            • Seekers
                                                                                                                                              • Characteristics
                                                                                                                                                • Opportunity
                                                                                                                                                  • The Satisfied
                                                                                                                                                    • Characteristics
                                                                                                                                                      • Opportunity
                                                                                                                                                        • Cluster characteristics
                                                                                                                                                          • Figure 38: Private label OTC health clusters, July 2010
                                                                                                                                                          • Figure 39: OTC remedies bought in the past year, by private label OTC health clusters, July 2010
                                                                                                                                                          • Figure 40: OTC remedy purchase locations, by private label OTC health clusters, July 2010
                                                                                                                                                          • Figure 41: Perception of private label compared to name brand OTC remedies, by private label OTC health clusters, July 2010
                                                                                                                                                          • Figure 42: Attitudes towards private label OTC remedies, by private label OTC health clusters, July 2010
                                                                                                                                                        • Cluster demographics
                                                                                                                                                          • Figure 43: Private label OTC health clusters, by gender, July 2010
                                                                                                                                                          • Figure 44: Private label OTC health clusters, by age, July 2010
                                                                                                                                                          • Figure 45: Private label OTC health clusters, by household income, July 2010
                                                                                                                                                          • Figure 46: Private label OTC health clusters, by race/Hispanic origin, July 2010
                                                                                                                                                        • Cluster methodology
                                                                                                                                                        • Custom Consumer Groups

                                                                                                                                                          • Older Hispanics just as likely to be on the lookout for new OTC remedies
                                                                                                                                                            • Figure 47: Attitudes towards OTC remedies, by race/Hispanic origin and age, July 2010
                                                                                                                                                          • Older men an important target for pain relievers
                                                                                                                                                            • Figure 48: Purchase of private label OTC remedies, by gender and age, July 2010
                                                                                                                                                          • For women, interest in new OTCs remains strong across age groups
                                                                                                                                                              • Figure 49: Attitudes towards OTC remedies, by gender and age, July 2010
                                                                                                                                                            • Older men more likely to believe store brands work just as well
                                                                                                                                                              • Figure 50: Attitudes towards private label OTC remedies, by gender and age, July 2010
                                                                                                                                                          • Appendix: Other Useful Consumer Tables

                                                                                                                                                              • Figure 51: Purchase of private label OTC remedies, by household size, July 2010
                                                                                                                                                              • Figure 52: Attitudes towards OTC remedies, by household income, July 2010
                                                                                                                                                              • Figure 53: Attitudes towards private label OTC remedies, by household size, July 2010
                                                                                                                                                              • Figure 54: Reasons for not buying private label OTC remedies, by household size, July 2010
                                                                                                                                                          • Appendix: Trade Associations

                                                                                                                                                            Companies Covered

                                                                                                                                                            • Albertsons Inc.
                                                                                                                                                            • AstraZeneca
                                                                                                                                                            • Bayer AG
                                                                                                                                                            • Bayer Corporation
                                                                                                                                                            • Boehringer Ingelheim Pharmaceuticals, Inc.
                                                                                                                                                            • Cadbury Adams USA LLC
                                                                                                                                                            • CVS Caremark Corporation
                                                                                                                                                            • Duane Reade, Inc
                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                            • Food and Drug Administration
                                                                                                                                                            • GlaxoSmithKline (USA)
                                                                                                                                                            • Grocery Manufacturers of America (GMA)
                                                                                                                                                            • Harris Teeter, Inc
                                                                                                                                                            • Johnson & Johnson
                                                                                                                                                            • Kmart Corporation
                                                                                                                                                            • McNeil Consumer & Specialty Pharmaceuticals
                                                                                                                                                            • National Association of Chain Drug Stores (NACDS)
                                                                                                                                                            • Novartis Pharmaceuticals Corporation
                                                                                                                                                            • Price Chopper
                                                                                                                                                            • Private Label Manufacturers Association (PLMA)
                                                                                                                                                            • Procter & Gamble USA
                                                                                                                                                            • Reckitt Benckiser USA
                                                                                                                                                            • Ricola Usa Inc.
                                                                                                                                                            • Safeway Inc
                                                                                                                                                            • Schering-Plough Corporation
                                                                                                                                                            • Stater Bros. Holdings Inc
                                                                                                                                                            • Supervalu Inc
                                                                                                                                                            • Target Corporation
                                                                                                                                                            • The Great Atlantic and Pacific Tea Company (USA)
                                                                                                                                                            • The Kroger Co.
                                                                                                                                                            • U.S. Bureau of Labor Statistics
                                                                                                                                                            • Walgreen Co
                                                                                                                                                            • Walmart Stores (USA)
                                                                                                                                                            • Weis Markets Inc
                                                                                                                                                            • Winn-Dixie Stores
                                                                                                                                                            • Wyeth

                                                                                                                                                            Private Label OTC Healthcare - US - September 2010

                                                                                                                                                            £3,174.67 (Excl.Tax)