Chain Drug Review, February 12, 2018

Chain Drug Review February 12 2018 37 CATEGORY INSIGHTS AROMATHERAPY Aromatherapy It has the sweet smell of success NEW YORK The aromatherapy category is hot and getting hotter Its just on fire right now says Puneet Nanda founder and chief executive officer of essential oil supplier GuruNanda LLC People are going nuts buying on our website We are astounded ourselves with what is going on Nanda the entrepreneur behind Dr Fresh which he grew into a company selling several hundred million toothbrushes a year before selling it said he didnt expect to replicate its success with GuruNanda But now he thinks his new company is going to become much bigger than Dr Fresh very quickly The GuruNanda line targets the growing number of consumers who are looking for natural products and remedies rather than taking the traditional medicine pharmaceuticals route Aromatherapy based in ancient Ayurvedic medicine has become extremely popular as a result of the trend At Piping Rock Health Products senior vice president of sales and marketing Kimberly Vigliante cites Nielsen data showing aromatherapy sales in all outlets up 57 last year The segment is projected to grow 50 in the drug channel to 46 million in 2020 according to TABS Analytics and Piping Rock This data demonstrates that aromatherapy is a quickly growing category that retailers can only benefit from says Vigliante At Natures Truth we continue to expand the aromatherapy category creating unique innovative items that bring consumers to the category and with our Wellness 360 marketing campaign those new users are heading straight for the vitamin aisle Despite the arrival of new brands in the segment Natures Truth remains the No 1 selling aromatherapy brand nationally with a 40 share and continues to drive growth having advanced 53 in the fourth quarter of 2017 she adds citing Nielsen Natures Truth has been a driving force behind transforming the vitamin aisle to an overall wellness aisle wellness includes more than just vitamins it incorporates categories such as aromatherapy she emphasizes By merging the vitamin and aromatherapy categories Piping Rock is bringing new users to both as well as boosting basket sizes for retailers she says The Natures Truth aromatherapy line is expansive with over 50 products including diffusers base oils single essential oils unique essential oil blends essential oil mists roll ons creams and new innovative forms Quality continues to be of importance with so many companies out there in the market as not all have the same standards Vigliante says Natures Truth recently launched new packaging for essential oils that call out its gas chromatography and mass spectrometry testing so consumers can be confident they are getting the 100 pure and natural essential oils that they expect she notes Natures Truth customers are about 79 female and 21 male and generally ages 35 to 54 Our target market is women comments Vigliante We feel the best way to reach women in our demographic is to focus our marketing efforts by advertising in popular womens magazines and maintaining a heavy digital and social media presence Social media has played a huge role in the aromatherapy segment she adds From multilevel marketing brands to the mass market brands found on retailers shelves to health food store brands social media has allowed consumers to connect and share their aromatherapy experiences Our consumers deeply engage with our brand through the use of social media We have a large presence on social media and use it to educate our consumers as well as give them fun ways to use their favorite products Aromatherapy allows consumers to take a proactive approach to wellness and make their wellness routine fun By utilizing social media we are able to reach a wide array of consumers and promote brand awareness new product launches with our retail partners and promote load to card offers with direct links in ads Nanda of GuruNanda says his personal experience provides a powerful testament to the benefits of aromatherapy While in Greece he had a chronic condition causing him to sneeze as much as 100 times a day I was eating Claritin he recalls A 94 year old man who saw what was happening gave him a drop of oregano oil in water with a high carvacrol content I took it and since then Ive never touched a Claritin Nanda says It literally changed my life And to ward off the flu this season he put a few drops of Guru Nanda Thrive oil blend on his pillow and diffused it in his office I call it my flu shot he says Everyone around me was getting sick and I never got sick GuruNanda meanwhile has thrived by paying farmers a fair price for ingredients Consumers reap the reward since eliminating the middleman reduces the exorbitant prices typically charged for quality essential oil according to the company I kept it super affordable comments Nanda saying GuruNanda is more like a social entrepreneurship project than a conventional for profit company In any event revenues are growing at a nearly triple digit rate he says Everything is going up like nobodys business Its the fastest growing business in the world GuruNandas global network of farmers also ensures that all ingredients in its essential oils and oil blends are 100 pure and natural And Nanda has made it a mission to educate consumers to avoid synthetic or lesser quality ingredients which he says are all too prevalent in the marketplace Vigliante says Piping Rock believes aromatherapy absolutely aligns with wellness The company offers only 100 pure essential oils made from the highest quality plants While fragrance oils tend to be synthetic essential oils are highly concentrated forms with similar benefits to their plant counterparts she points out Essential oils have been used for centuries due to the natural effect they have on our senses By using essential oils consumers are just adding to their current wellness regimen because wellness is about how you feel as a whole not just what you put inside your body Retailers have succeeded with aromatherapy by demonstrating their commitment to the segment through larger item mixes innovative forms and greater visibility with premium placement on shelves in the vitamin section says Vigliante Optimal shelf placement is either at the beginning of the Ato Z branded vitamin blocks or positioned within the womens wellness sections By grouping base oils with diffusers and merchandising the different types of essential oils alphabetically we help ease navigation at the shelf for consumers so they can easily find the products they are looking for No one night stand for category sales to boom for years SHELTON Conn The burgeoning Retailers need to stick with it aromatherapy category is here to stay says one market expert With the segments SKU count up 28 in the past year and velocity sales per unit up 11 and still increasing aromatherapy has the foundation for long term growth says Kurt Jetta founder and chief executive officer of TABS Analytics The numbers suggest this is not a flash in the pan he says Its new its innovative its a source of incremental sales and its going to have some sustainability Jetta likens the categorys current state to the early days of Kind bars and other nutrition bars While Kind has become a runaway success he says there was a time when its viability was not assured It wasnt doing all that well in the mass market Productivity was low and its share was low but we saw very similar dynamics on SKU count and velocity growth that were seeing with aromatherapy which you just dont see that all that much Merchandising of aromatherapy products is inchoate with a lot of testing of the optimal location Facings in vitamins bath and body and air care have all produced good results Piping Rock has favored health and wellness positioning for its Natures Truth line while Auracacia likes specialty bath and GuruNanda prefers air care says Jetta Theyre each trying to find their niche The ideal placement is still to be determined He emphasizes that the footprint for aromatherapy oils is very small Sales per item may be lower than they are for vitamins but aromatherapy SKUs take up less space and sales are growing incrementally and still finding an audience At this point retailers need to stick with it says Jetta Among the retailers that have ventured into the category drug chains are ahead of the pack especially CVS Pharmacy Jetta notes Walmart is kind of finding its way trying to figure out the best place and best brand assortment he says Nutrition bars provide a precedent for the development of the categorys merchandising he says in that at one time they could be found in any of four instore locations Now they are usually in a set position making up a category in themselves One aspect of the aromatherapy business that bodes well for brick and mortar stores is that online sales are already relatively advanced accounting for about 30 of dollar volume So brick and mortar retailers can look to capture share from e tailers as opposed to the other way around E commerce sales of vitamins by contrast are just 17 suggesting they can continue to advance at the expense of in store sales When it comes to marketing aromatherapy vendors can definitely pick it up and provide more support and name awareness and education Jetta observes Digital efforts are gaining momentum he adds which makes sense given the relative youth of the target market If we draw any conclusion from cosmetics its that massive amounts of information are being picked up from social media YouTube in particular GuruNanda and Natures Truth are neck and neck at the top of the category but the overall market numbers suggest competition will increase which isnt necessarily bad for the current players Jetta remarks A bigger field increases the overall presence and awareness of the category The category is still finding a market and still undergoing a lot of trial while holding onto existing users he says It still has a ways to go to be as productive as other items it competes with But thats not to say its a bad news story It just needs a little bit more time Its nice when youre struggling to find hot front end segments to see something thats new and innovative Nothing else approaches aromatherapy in that regard so its a good opportunity regardless of where retailers decide to put it