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Big OTC brands fuel sales growth


Sales of OTC medicines continue on a steady pace with dollar volumes up half a billion dollars over the first half of 2016, according to data culled from IRI. Drug Store News earlier this year reported $44 billion in OTC sales for calendar 2015, citing IRI figures.

(To view the full Category Reviews, click here.)

Helping to fuel that growth are three mega brands with three very different growth stories.

GSK Consumer Health’s Flonase allergy remedy generated $345.2 million in sales for the 52 weeks ended May 15 on 209.9% growth across total U.S. multi-outlet, according to IRI. Flonase is the latest nasal corticosteroid to switch from Rx-to-OTC in what many have described as a case study in how to market and merchandise a newly switched medicine. But what’s really noteworthy is that Flonase did not steal share from traditional allergy tablets — sales of Allegra, Zyrtec, Claritin and even the venerable Benadryl were all up in that period.

SlimFast is another brand that is driving significant growth through front-end cash registers. For the 52 weeks ended May 15, SlimFast ready-to-drink options generated $101.7 million in sales, almost all of which is incremental. SlimFast last year launched the SlimFast Advanced Nutrition Line, which in addition to RTDs includes powders, bars, 100-calorie snacks and a diet aid for a total of 15 revenue-driving SKUs.

Consumers are looking for a product line that can help feed a comprehensive weight-loss plan, explained Paul Gagliano, EVP sales at SlimFast. “Consumers are looking for guidance on how to control their weight,” he said. “Retailers can capitalize by merchandising products together and communicating to the consumer how the products work together as part of a plan.”

Also helping to fuel considerable sales growth is Quest Nutrition’s Quest Bar. Sales of Quest Bars have reached only $97.3 million for the 52 weeks ended May 15, trailing far behind sports nutrition market leader Clif Bar with $311.2 million in sales.

But Quest is riding a 244.9% growth trajectory that’s only going to get steeper — the company is just now focusing on launching into mass outlets like Walmart this summer, according to an interview with company president Tom Bilyeu earlier this year. “Now that our bars are mature enough that we have the consumer visibility and pull-through, we’re able to go to mass channels,” he said. “This is our first 12 months in major grocery, and then this summer we’ll be launching in Walmart — that’s the beginning of our step into the mass market.”

In the following pages, Drug Store News explores some of the strategic growth categories in OTC, including allergy, VMS, adult nutrition, incontinence, eye care, wearables and lice.

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