Think Beyond Basic

Sales are improving overall in the oral care segment, but store brand opportunities lie in "professional-type" and other innovative products, not in basic toothpastes and mouthwashes.

Recent years haven't been all that kind to the oral care category. In fact, in its June 2010-December 2010 Category Insight, global market research firm Mintel International Group noted that although "basic oral care might be considered recession-resistant, downturn-motivated frugality appears to have played a role in blunting category sales growth over the last three years."

But recent sales improvements — although small — are giving manufacturers and retailers a reason to smile and showcase their pearly whites. Dollar and unit sales within the total oral hygiene category grew 2.1 percent and 0.7 percent, respectively, during the 52 weeks ending June 11, according to data from New York-based Nielsen (U.S. food, drug and mass merchandiser stores, including Walmart).

►Do think "professional" when it comes to store brand product development —from power toothbrushes to formulations promising plaque reduction, gingivitis reversal and more

Professional care, at home

On the store brand side, additional growth is not likely to come from basic national-brand-equivalent toothpaste and mouthwash formulations — the value-focused name brands already have those categories well covered. Instead, true innovation — innovation that fits in with current consumers' desires — is called for.

The biggest consumer-driven trend right now is that toward "professional-type" oral more. care products — or, in essence, bringing dentist applications into the home, explains Paul Cira, managing director for Brushpoint Innovations Inc. of Markham, Ontario.

"This goes from power toothbrushes to whitening," he says. "When developing new store brands, I think retailers should be looking at providing new and unique oral care offerings, not just national brand equivalents."

Duff Lewis, senior director of marketing for Grand Rapids, Mich.-based Ranir LLC, goes one step further, noting that the trend toward professional-type dental care increasingly will center on health benefits such as plaque reduction, gingivitis reversal, healthy gums and more. After all, as baby boomers continue to age, they face an increased risk for periodontal disease, gum recession and other dental issues.

"Oral care products will place more emphasis on health benefits rather than just cosmetic benefits such and whiter teeth and fresher breath," he says.

But value — high quality at a good price — also remains critical on the store brand side of the category, notes Daniel Enriquez, vice president of sales for Dr. Fresh of Buena Park, Calif. He says consumers are gravitating toward "aggressive"offers such as multipacks.

Cira agrees, saying that retailers too often look at store brand items as just the opening price point and not the best value.

"Adding private label twin packs or multiples in a package can provide the best value to the consumer and increase category sales and profits for the retailer," he says.

Lewis notes that multipacks actually have grown in size within the oral care category as consumers continue to look for value and convenience.

"In addition, retailers have used bonus packs or sizes to attract consumers to their private label product," he says.

►Don't discount "fun" toothbrush designs geared for adults; research shows today's consumers want them.

Look What's New

W brand Dry Mouth Mouthwash with Calcium from Deerfield, Ill.-based Walgreen Co. is said to relieve dryness and irritation in the mouth. Free from alcohol and sugar, the mint-flavored liquid contains xylitol and beneficial enzymes of natural saliva. It retails in a 33.8-fl.-oz. PET bottle.

Designed to help prevent cavities, strengthen teeth and kill germs that cause bad breath, Smart Sense Anticavity Mouthwash from Hoffman Estates, Ill.-based Kmart Corp. also is said to fight visible plaque above the gum line and restore enamel. It features a eucalyptus mint flavor and retails in a 33.8-fl.-oz. recyclable PET bottle.

ShopRite Quick Whitening Dissolving Strips from Wakefern Food Corp. of Keasbey, N.J., are designed for consumers to "apply and go" — the dissolvable strips are said to whiten teeth three shades in seven days and to reduce plaque in one day. They also feature a refreshing mint flavor to freshen breath. The strips retail in a box containing 56 dissolving strips.

Other trends, Enriquez says, include travel kits for consumers who are on the go. Sales of such items have been very strong for Dr. Fresh.

Through its research, Mintel also learned that a significant proportion of adults notes an interest in more "fun" toothbrush designs for adults. The company sees opportunity, too, in multi-functional products, which hold strong appeal to consumers on a budget.

Consumer interest in whitening products shows little sign of abating, Mintel adds, suggesting additional store brand opportunities there. Sales of floss, accessories and tools, meanwhile, are projected to remain strong as consumers continue to look for ways to enhance home-based oral care.

"There is potential to further develop the use of natural ingredients by educating consumers better," Mintel added in its category insight."For example, cranberry extract can help prevent plaque formation."

Poised to sell

To be successful, retailers' new oral care products must not only be in line with current consumer desires, but also be packaged, priced and merchandised to sell. Enriquez contends that packaging represents an "exciting challenge" for both the manufacturer and the retailer. "There are numerous constraints dictated by shelf space and peg formats," he says.

►Do consider off-shelf displays of store brand oral care products to attract attention.

Although it's the manufacturer's job to develop creative packaging executions that fit the dictated footprint, Enriquez believes strong supplier-retailer collaborations such as those his company engages in can result in the best packaging solutions.

Lewis agrees that space limitations do present a challenge — not only in the design of the package, but also in the design of on-pack messaging.

"Other vehicles such as shelf talkers, displays, etc., can be utilized to gain more visibility for these products."

On the pricing side, Lewis notes that private label oral care products typically are priced 30 percent below the national brand equivalent (when one exists). But some retailers do not want to go above a certain price point, he says, and therefore create a larger-than-desirable gap to the national brand.

For his part, Cira believes a retailer should have an opening-price-point store brand product for a subcategory, but then maximize profitability by narrowing the gap on other private label products within the segment.

As for merchandising, Lewis points to the traditional practice of positioning the store brand product to the left of the comparable national brand as still standard. Some retailers have tried brand blocking — merchandising all of their private label oral care products together — but he says that strategy has met with mixed results.

To really attract attention and capitalize on incremental purchases, however, Cira believes that off-shelf displays also are critical.

►Don't go too low with store brand pricing.

"Too many times, the private label product gets lost on shelf against the national brand multiple-SKU offering," he stresses. "PDQs, sidekicks and clip-strips all work well in promoting the private label oral care brand.

Finally, retailers need to support their product development and merchandising efforts through consumer-based marketing (Cira suggests that a retailer sell and advertise store brand oral care products as part of its web strategy) and strong category management.

"The retailer [needs to ensure it] has the correct mix of national brand and private label product on the shelf and sufficient space allocated in the planogram set to maximize turns, revenues and profits, Lewis maintains" PGSB