CategoryREVIEW

CategoryREVIEW OTC

BUY-IN ? COUGH-COLD

First half of cold season leaves H1N1 hangover

BY MICHAEL JOHNSEN

All the hype around

H1N1 that was so prev-

alent in 2009 is gone,

leaving only the tough

comparisons a year later. That makes

the first half of the 2010-2011 cough-

cold season an H1N1 hangover with

overall sales of $4.6 billion, represent-

ing a slight decline of 1.8%, for the 52

weeks ended Dec. 26, 2010, according

to SymphonyIRI Group. What was The cough-cold aisle may be in for some changes this year missing in 2010 was the 2009 summer with the introduction of Allegra and potential state legislation of sickness that reached a crescendo regarding pseudoephedrine's OTC status.

in September.

For the coming year, the introduction

Top 10 cold/allergy/sinus tablets

of Allegra to over-the-counter aisles will bring a whole new once-prescription-only

BRAND Private label Zyrtec Claritin

SALES* $793.0 222.9 169.1

% CHG 14.8% 3.5 7.9

allergy consumer to OTC. And though Allegra is not expected to reach the sales heights of more than $200 million like its two second-generation antihistamine predecessors, an incremental $100 million to

Mucinex DM

141.1 -1.1

OTC allergy sales is not out of the question.

Mucinex

136.6 -9.0

Second is the growing number of states

Claritin-D

125.1 0.4

considering a reverse-switch and push-

Benadryl

116.2 -7.8

ing pseudoephedrine-containing products

Mucinex D

83.8 5.4

back to prescription-only status. If success-

Theraflu Sudafed PE TOTAL

73.9 62.8 $2,637.4

-4.8 -32.1

1.5%

ful, that may create a snowball effect among neighboring state legislators and threaten the "D" business that generated $263.7 million in sales on growth of 1% across the

* In millions Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

top three brands -- Claritin-D, Mucinex D and Zyrtec-D.

TN latest state to

fight PSE status

NASHVILLE, Tenn. -- Tennessee makes the third state this year, joining Kentucky and Nevada, that is considering state legislation to mandate the sale of pseudoephedrine as prescription-only. That could prove a big concern for the legitimate market for PSE products on account of the potential snowball effect such legislation could have on neighboring states. According to a government review staff in Kentucky, at least 97.8% of all PSE sales are bought for legitimate use.

However, another bill in Tennessee proposed to adopt the National Precursor Log Exchange, an electronic logbook system that enables law enforcement to track illicit PSE sales in real time. "In the four states that have fully implemented e-tracking technology, nearly 40,000 g of illegal PSE sales per month are blocked," stated Carlos Gutierrez, a state government relations consultant at the Consumer Healthcare Products Association. The system also helps law enforcement find meth labs.

But proponents of the prescriptiononly solution may not be interested in finding more meth labs, even if they do exist. Many identify with the significant reduction in meth lab busts in Oregon and Mississippi, two states that currently require prescriptions for PSE purchases. And that's part of what makes a prescription mandate an attractive proposition for state lawmakers: Decontaminating meth labs is an expensive proposition.

Cough-cold marketer opts for app

MOUNT KISCO, N.Y. -- Prestige Brands became one of the first cough-cold marketers to develop a branded smart-phone app to help moms hone in on the most appropriate PediaCare remedy for their sick children. It's not a bad play; a recent Millennial Media report indicated that in 2010, 32% of moms

owned a smart phone, versus 20% in 2009. The new PediaCare iPhone app coincides

with the launch of PediaCare's new, safe and effective cold-flu-fever medicines -- with and without acetaminophen -- that match the formulations of children's Tylenol products that were recalled.

The PediaCare iPhone app helps moms choose the right remedy for their sick children.

1 ? FEBRUARY 28, 2011



CategoryREVIEW OTC

BUY-IN ? COUGH-COLD

J&J hands over germ protection

BY MICHAEL JOHNSEN

And retailers currently are holding an

overabundance of inventory, all of which is

Gojo Industries this past fall reacquired

expected to soon flood the clearance racks in

its Purell hand-sanitizer brand from

the dollar store channel as the sanitizers

Johnson & Johnson and is currently

move closer to their expiration dates.

putting the pieces in place to reas-

"It's really about driving household

sume a category leadership role for

penetration through education and in-

waterless hand washing.

novation," said Tim Cleary, who joined

The endeavor is not without its

Purell Consumer as VP sales this past

challenges. Today, hand sanitizers

fall. "There's great brand-name recog-

are a highly commoditized category.

nition. Aided is 82%; unaided is 58%,"

And though sanitizers certainly ben-

Cleary said. "But household pen-

efited from increased awareness associated with last year's H1N1

Purell hand sanitizer

etration is only 29%. You've got this huge gap there."

pandemic, that awareness didn't translate into Cleary is looking toward opportunities

sales; the $100-million-plus category is down across the 2011-2012 cough-cold season now

35.4% in 2010, according to SymphonyIRI and plans to relaunch the brand with new

Group data.

packaging and line extensions in 2012.

Top 10 hand sanitizers

BRAND Private label Purell Germ-X Gold Bond Ultimate Clean n' Natural Dial Dr. Fresh Infectiguard Germ-X Germ Blaster Purell Purifying Essentials Sani-Hands for Kids TOTAL

SALES* $52.3 17.4 7.5 7.1 4.3 3.5 1.8 0.9 0.7 0.6 $103.6

% CHG -38.1% -57.6 -33.4 1,366.3 167.9 21.7 131.4 -12.2 -74.3 -51.9 -35.4%

* In millions Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

CHPA, Congress propose dose of clarity for kids

HUNTINGTON, N.Y. -- Concerns over kids' medicines and proper dosing is still a prominent issue. Children between the ages of 2 years and 12 years are inaccurately dosed up to 73% of the time, according to a report published by the American Medical Association. This increases emergency room visits in two-

thirds of the cases. In January, N.Y. Rep. Steve Is-

rael, D-Huntington, sparked debate over proper pediatric dosing when he announced plans to introduce new legislation to homogenize medicine cups and other dosage devices commonly used to give medicine to children. Israel cited a study

published in the December 2010 Journal of the American Medical Association, which found that 99% of medicine cups and dosage devices were flawed, as the impetus behind the bill.

However, the need for such a bill may be moot as the over-thecounter industry is already initiating guidelines that will stan-

Top 10 cold/allergy/sinus liquids

Top 10 cough syrup suppliers

dardize dosing directions and units of measuring that dose by year's end.

The Consumer Healthcare Products Association has approved voluntary guidelines, including the uniform use of tables to communicate dosing guidelines as opposed to only text, and the use of milliliters as the preferred unit for dosing with the abbreviation to read "mL."

BRAND Private label Vicks NyQuil Theraflu Benadryl Triaminic Tylenol Cold Robitussin Vicks DayQuil Robitussin CF Claritin TOTAL

* In millions

SALES* $167.9

90.6 30.1 28.1 25.8 23.6 22.2 21.9 19.9 16.0 $586.4

% CHG 11.3% 1.5 -9.4 -11.6 2.3 -21.8 -13.2 0.3 -16.3 24.3 -7.3%

MANUFACTURER (KEY BRAND) Reckitt Benckiser (Delsym) Private label Pfizer Consumer Healthcare (Robitussin) Procter & Gamble (NyQuil) Novartis Consumer Health (Theraflu) Health Care Products (Diabetic Tussin) Boiron (Chestal) Prestige Brands (PediaCare) Similasan (Similasan Kids Cough Relief) Hyland's (Hyland's Cold 'n Cough 4Kids) TOTAL

SALES* $83.1 79.6 78.0 42.1 8.1 4.2 3.5 2.0 1.5 1.4 $309.9

% CHG -5.2% -1.0 -15.8 -0.2 68.1 -9.1

112.1 1.8

946.3 22.3 -4.0%

Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

AccuDial with dosing spoon

2 ? FEBRUARY 28, 2011



CategoryREVIEW OTC

BUY-IN ? COUGH-COLD

Study: 53% of colds originate at work

BY MICHAEL JOHNSEN

Americans are hard-pressed these days to call in sick, especially for something as innocuous as a cold or even the flu. A recent CareerBuilder survey found that nearly 72% of workers typically go to work when they are sick. Workplace pressures and "presenteeism" may be causing workers to go in under the weather, as more than half (55%) of workers said they feel guilty if they call in sick.

The CareerBuilder survey was conducted nationwide from Nov. 15 to Dec. 2, 2010, among more than 3,700 workers.

That's good news for purveyors of cold remedies, because the men and women who are sucking it up with the help of symptom relievers are likely passing their germs on to others. More than half of workers (53%) said they have gotten

Survey: How do you avoid germs in the workplace?

3%

Skipping meetings being attended by sick co-workers

15%

Avoiding shaking hands

30%

Clean work area

32%

Personal hand sanitizer

78%

Hand washing

0% 10 20 30 40 50 60 70 80 Percentage of workers

Source: CareerBuilder

sick from a co-worker who came to the office sick, while 12% said they picked up a bug from someone who was sick on public transportation going to or from work.

J&J OTC products

remain MIA until Q4

NEW BRUNSWICK, N.J. -- McNeil Consumer's absence from

cough-cold and analgesic aisles, including several pediatric

formulations, will extend into the fourth q0uarter, Johnson

and Johnson executives told analysts in January.

While retailers are likely to restore the10Tylenol real estate

once dis2t0ribution is back online and McNeil begins supporting the brand again, right now that empty space is ripe for

planogram expansion by rival over-the-counter companies. "It's a mixed bag for [retailers]," Kli3n0e Group healthcare ana-

lyst Laura Mahecha suggested. "A lot of what J&J lost went to private labels; I'm sure [that] h4a0s helped retailers' margins

in a lot of the categories." The first hurdle will be r5e0storing consumer confidence

in the brand, a campaign that doesn't look likely until 2012 now. "At the appropriate 6ti0me, we will be investing in mar-

ket support for our over-the-counter brands, such as Tylenol, Motrin and many othe7r0s," J&J chairman and CEO William

Wanedldpoancktoagldinignvinenstoovr8sa0.ti"oAnnsdfowr me wanilyl

be introducing product products, especially for

those for young children."

U.S. sales across J&J's OTC pharmaceuticals and nutri-

tionals dropped 52.8% over the fourth quarter. The McNeil

recalls impacted the fourth-quarter sales by approximately

$300 million and total year sales by approximately $900 mil-

lion, the company reported.

Second half of cold-flu season may cough up sales

NEW YORK -- The second half of the 2010-2011 cough-cold-flu season actually may realize greater sales of symptom relievers than last year, judging from the four weeks ended Dec. 26. According to Matrixx president and CEO Bill Hemelt, sales of remedies were on the rise in those four weeks. Hemelt noted that the total cough-cold category was 5% higher than the same period last year and growing.

However, there still exists an inclination of retailers to order ultra-conservatively when it comes to cough-cold remedies, Hemelt noted, so ordering may become heavy in the second half. "Retailers continued to trim their inventory levels in comparison to last year; however, we believe retailers' inventory of our products has reached a point where they will increase purchases to offset the increased consumer takeaway," he said.

In addition to colds, incidence of influenza also appeared on the rise heading into February. The Centers for Disease Control and Prevention noted that 30 states were reporting widespread influenza activity as of Jan. 29.

U.S. incidence of influenza for week ended Jan. 29

Source: Centers for Disease Control and Prevention

3 ? FEBRUARY 28, 2011



CategoryREVIEW OTC

BUY-IN ? COUGH-COLD

Study: Homeopathic shoppers buy more

BY MICHAEL JOHNSEN

Homeopathy products, especially in the cough-cold space, appear to be doing very well. That's good news in and of itself, but according to recent Boiron research, it gets better: People who place homeopathy in their market baskets tend to buy more by the time they get to the checkout.

"Overall, our research shows that 27% of shoppers have successfully used a natural/alternative over-thecounter medicine in the past, while 55% have not but are interested in trying," said John Durkin, Boiron VP sales and marketing. "This suggests a substantial opportunity to increase sales," he said. Consumers who buy homeopathic products are

Homeopathic medicines like Boiron's Children's Oscillococcinum (left) benefited when the recommended age for use of kids' coughcold medicines became 4 years and older for many allopathic remedies.

more valuable shoppers, Durkin added, across all channels. "Specifically in drug stores, baskets with homeopathic medicines have an average value of $42 in comparison to $21 for those that don't," Durkin said, citing Spin-

Scan "Shopper Insights" for the year ended June 26, 2010.

But homeopathy isn't selling better because it's homeopathy, per se. Rather, it's more of a right-place-right-time scenario. Recommended use for all of

kids' cough-cold medicines were scaled back to older than 4 years old for many allopathic formulations. That had many parents in search of a solution that was priced right, worked and could be recommended for use in their children. The answer turned out to be homeopathy.

"The past issues with pediatric cold medicines have been great for homeopathy and the natural segment," said Michele Boisvert, president of Homeolab USA, which offers a number of pediatric cough-cold products under the Kids Relief brand. "There is certainly an increased amount of homeopathic and natural offerings on the shelves today for consumers to choose from. Now with recent recalls, it leaves the door wide open for natural options."

When cold and flu `go viral,' so do moms

LOS ANGELES -- When it comes to choosing the right medicine for their kids, moms go by the book -- Facebook, that is. Moms new and old are spending more and more time on mommy blog-type sites and then tweeting or "Facebooking" any interesting tidbits they may find there. It's a highly engaged group of consumers. According to recent findings by market researcher Morpace, U.S. Facebook users are on the site for one of every three minutes of time they spend online. Users 18 to 34 years old spend the most time on the site per week (8.5 hours out of 22.4 hours spent online). Users 55 years and older spend an average of 4.6 hours per week on Facebook.

Having a strong presence within social media proved to be a boon to Hyland's when the company voluntarily recalled its Teething Tablets in the fall. "The energy was enormously positive, and we benefited from that in a major way," reported Hyland's chairman and CEO Jay Borneman. And while Hyland's experience with its Teething Tablets some five months ago underscored the significant role social media platforms can play in a brand's identity -- not just on Facebook, but also on other social media platforms like

Hyland's strong Facebook presence helped during recalls.

mommy blog sites -- the company also uncovered a new way to help their moms connect the dots around teething solutions for toddlers, kids' cough-cold remedies and other pediatric solutions.

4 ? FEBRUARY 28, 2011



CategoryREVIEW OTC

BUY-IN ? COUGH-COLD

Singers, auctioneers most

at risk for sore throat

BY MICHAEL JOHNSEN

consumer analytics company, which con-

tacted 903 people to explore causes of

A recent Prestige Brands survey linked sore-throat pain and the remedies people

certain professions to a propensity for sore use to treat it.

throats. The careers most commonly asso- As many as 55% of respondents listed

ciated with sore-throat pain were singers throat pain relief as the top reason for buy-

(53%) and auctioneers (40%). Healthcare ing a particular sore-throat remedy brand,

workers (47%) and teachers (37%) also followed by 38% saying they buy a partic-

were perceived to be at risk due to their ular brand because it works instantly.

potential exposure to airborne illness-

es. Almost 3-out-of-4 of those sore-

throat sufferers also were under

the weather from a cold or flu. The survey was conducted by

TABS Group, an independent

Cold-Eeze cough drop

Top 10 cough drop/sore-throat drop suppliers

Ricola cough drops

MANUFACTURER (KEY BRAND) Kraft Foods (Halls) Private label Ricola (Ricola) Prestige Brands/Blacksmith Brands (Luden's)** ProPhase Labs (Cold-Eeze) Reckitt Benckiser (Cepacol) Prestige Brands (Chloraseptic) Insight Pharmaceuticals (Sucrets) Lofthouse of Fleetwood (Fisherman's Friend) BestSweet (Bee M.D.) TOTAL

SALES* $162.1

70.8 69.4 20.3 19.2 18.9 11.4 8.3 4.1 1.4 $390.3

% CHG -6.2% -3.1 5.2 -14.5 -19.9 -0.6 -17.4 -10.5 4.4 0.0 -5.1%

* In millions ** Blacksmith Brands original acquired Luden's from McNeil Consumer in fourth quarter 2009. Prestige Brands then acquired Blacksmith Brands in fourth quarter 2010.

Source: SymphonyIRI for the 52 weeks ended Dec. 26, 2010, across FDMx

Top 10 lip balms/cold sore medicines

BRAND Abreva Burt's Bees Blistex ChapStick Classic Private label Carmex ChapStick Lip Moisturizer ChapStick Mentholatum Softlips Nivea A Kiss of Moisture TOTAL

SALES* $84.6 30.8 28.2 25.6 24.9 23.4 20.0 16.3 12.2 9.2 $417.0

% CHG 7.3% 13.0 15.3 0.0 5.5 3.5 4.3 3.5

-13.9 24.2 5.6%

* In millions Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

Top 10 sore-throat remedy liquid suppliers

MANUFACTURER (KEY BRAND) Prestige Brands (Chloraseptic) Private label McNeil Consumer Products (Tylenol Cold Sore Throat) Reckitt Benckiser (Cepacol Spray) Humco Lab (Humco) Integrated Beverage Group (Children's Throat Cooler) De La Cruz Prods (Bactimicina Cough and Cold) Insight Pharmaceuticals (Sucrets Ice) Procter & Gamble (Formula 44) Alkalol (Alkalol) TOTAL

SALES* $19.2 10.0

3.9

1.5 0.3

0.3

0.2

0.1 0.1 0.1 $35.9

% CHG 1.7% -0.5

5.4

-45.6 8.6

-76.7

19.5

-65.4 -89.0 -7.4 -7.2%

* In millions Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

Top 10 nasal sprays

BRAND Private label Primatene Mist Afrin Afrin No Drip NeilMed Sinus Rinse Zicam Blairex Simply Saline NeilMed NasaFlo Vicks Sinex VapoSpray Four Way TOTAL

SALES* $108.1

64.7 38.1 30.7 30.2 20.7 20.4 17.4 15.5 12.3 $471.3

% CHG 10.8% 2.3 0.0 0.7 4.5 -59.7 14.2 8.2 98.9 0.5 -7.6%

* In millions Source: SymphonyIRI Group for the 52 weeks ended Dec. 26, 2010, across FDMx

5 ? FEBRUARY 28, 2011



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