Natural Products — an untapped opportunity for independent pharmacy?

March 1, 2018By Focus on the Pharmacy Front End Blog, Independent Pharmacy, Step into Natural

by Jen Johnston, CHHC, senior marketing services account manager, for the Step into Natural blog series

One way savvy independent pharmacies are differentiating from their chain competitors is by keeping abreast of shifting consumer preferences and stocking a robust selection of natural products. In fact, a recent survey conducted by HRG revealed that 80% of responding pharmacies were stocking natural brands.

The market for natural has changed dramatically over the last few decades. What began as a niche movement among a small demographic of eco-conscious people in the 1970s has ballooned into a $180 billion industry which includes food, drink, supplements, remedies, and personal care products. According to SPINS, the natural products industry more than doubled from 2006 to 2015.

Kline Group reported that the U.S. market for natural personal care products has grown over 7% recently, while the U.S. market for natural OTC medicines has grown over 11%, fueled by growing consumer awareness and interest in using these products. This has far outpaced growth across more conventional category performance.Pharmacist among natural products

In 2015, in the U.S. Natural Products Industry, dietary supplements were valued at $39 billion and natural beauty and personal care were valued at $18 billion, a 6.2% and 13.4% increase over the previous year, respectively.

While there is no formal definition of “natural,” many consumers of these items tend to view natural products as safer, healthier, and as addressing holistic needs, due to the fact that they have less chemicals than their mainstream counterparts. In fact, stats from NMI, as reported by Trajectory, indicate that nearly half of all consumers are concerned about chemicals in personal care products.

As you will learn through this blog series, there are many reasons other than the avoidance of chemicals that people shop for natural products, including:

  • having allergies requiring use of products that are “free from” certain ingredients;
  • being on a doctor-recommended diet such as low-FODMAP which addresses digestive issues or gluten-free for autoimmune conditions such as celiac disease;
  • subscribing to a lifestyle diet such as vegan or paleo; and
  • supporting brands or companies with social missions that resonate with the shopper.

Despite the outdated belief that millennials are the primary purchasers of natural items, the desire for safer/natural products spans generations. For example, 40% of women ages 35 to 49 were interested in organic/natural beauty and personal care products, followed by 37% at ages 50 to 64 and 32% at age 65 and older. Two in five U.S. consumers used a natural or organic version of a personal care product in the past six months, according to NMI data.

And it isn’t all or nothing – many consumers use a combination of natural and mainstream products.

Perhaps that’s why shoppers are no longer shopping solely at natural grocers and co-ops to purchase these types of products. According to the 2017 Natural Foods Merchandiser Market Overview, the fastest growing channel for natural products is actually conventional channels.

Independent pharmacies are perfectly poised to offer natural products to their customers because of the level of relationship their pharmacists have with their patients. It is good for their bottom line, too. In a recent article, Kline Group pointed out that “price points for natural OTCs are often higher than traditional OTCs, and they are often indicated for regimen use, making them strong sales generators for the companies producing them.”

Over the next year, we will be writing a series of posts in the "Stepping Into Natural" blog series that will help pharmacists understand what is going on in the natural market including understanding:

  • macro concepts such as free from, transparency, clean label, and social responsibility;
  • doctor-recommended diets such as low-FODMAP;
  • the plethora of certifications on products these days;
  • lifestyle diets such as vegan and paleo;
  • ingredient trends such as hemp-derived CBD and adaptogens; and
  • profiles of pharmacies excelling with natural products

In my next post, I will delve deeper into the meaning of “natural.” Stay tuned!