Packaged goods sales rose a mere 1.6% to $394.1 billion in 2005 in the face of economic uncertainty and Hurricane Katrina.
Drug stores saw the most increase, up about 4.8%, per Information Resources, Inc. IRI analyzed 2005 sales for its annual Times and Trends report.
Drug stores’ biggest percentage gains came in the least-developed segments, such as frozen, bakery and dairy, as drug stores morph into a convenient food & beverage outlet for shoppers. (The channel’s share of healthcare, beauty and personal-care sales rose, too.)
“It appears as if the drug store channel’s heavy focus on neighborhood merchandising, investment in destination departments and efforts to the link the front-end with the pharmacy are paying off,” said IRI Global Chief Marketing Officer Janet Eden-Harris in a statement.
The supermarket channel’s sales gains were slight, but enough to keep its edge over the discount channel.
Some product categories posted double-digit gains, thanks to new-product innovations: sports drinks, bottled water, hand and body lotion and cold/allergy/sinus tablets.
Beverage sales rose the most, 5.1%, on the strength of coffee and wine as well as sports drinks and bottled water— the expense of carbonated beverages, although diet soft drink sales were up.
General merchandise, a wide catch-all category, continued its steady decline with the biggest losses in photography supplies, batteries and kitchen storage.
Earlier this month, IRI announced its 2005 New Product Pacesetters, the brands that garnered the biggest sales in their launch year (bowing between February 2004 and January 2005, for 52 weeks of sales data in 2005).
The top food and beverage brands and their first-year sales*:
- Slim-Fast Optima diet line: $166 million
- Budweiser Select beer: $123 million
- Frito-Lay Light salty snacks: $112 million
- Nabisco 100 Calorie Packs: $107 million
- Cherry Vanilla Dr. Pepper soda: $107 million
- Kraft Carb Well multi-category line: $89 million
- Bertolli Dinner for Two frozen skillet dinners: $88 million
- Gatorade Lemonade: $80 million
- Coke C2 mid-calorie cola: $77 million
- Banquet Crock-Pot Classics frozen dinners: $71 million
(*Year One dollar sales across food, drug, mass channels, excluding Wal-Mart)
Top non-food brands:
- Tide with a touch of Downy laundry detergent: $266 million
- Gillette M3Power razors: $100 million
- Tylenol Extra Strength Rapid Release Gels internal analgesics: $68 million
- Glad ForceFlex trash bags: $67 million
- Gillette Venus Divine razors: $58 million
- John Frieda Brilliant Brunette hair care products: $49 million
- Mucinex DM cold tablets: $47 million
- Downy Simple Pleasures fabric softener: $46 million
- Neutrogena Advanced Solutions facial care: $43 million
- Advanced Listerine mouthwash: $41 million
Chicago-based IRI also pegged five trends for marketers to watch in 2006:
- Micromarketing becomes imperative as slow industry growth spurs CPGs to woo underserved current users and find untapped niche segments.
- Boomers and young adults will split the market, with budget-conscious youngsters shopping value channels for low-priced brands, and flush Boomers demanding premium products and service.
- Total health management keeps consumers evolving toward a balanced diet, giving marketers room for new products with general health benefits and marketing messages that stress balance and moderation.
- High-quality, healthy products that save consumers’ time will prosper.
- Traditional retailers gain traction with favorable demographics and innovative merchandising (drug stores); new formats, distinct private label and health and wellness initiatives (supermarkets). Still, grocers should gird against losing market share as younger shoppers migrate to supercenter mass merchandisers.
Network
