As drug stores begin to look and function more like holistic health centers, one major loose end continues to be the lack of healthy offerings in grocery and convenience sections. CBX partner Todd Maute says drug stores should look to revamp their store brands as a solution in a recent article in Chain Drug Review.
“Taken together, the top chains operate some 20,000 stores across North America,” Maute says. “That means they have the scope and scale to forge strategic alliances with [private label] manufacturers in pursuit of a common goal — developing, innovating and leveraging powerful store brands in the health and wellness space.”
Manufacturers typically have large minimum-volume requirements, making it difficult even for retailers like Whole Foods and Sprouts Farmers Markets–who only operate about 800 stores collectively—to meet their demands. But with a greater commitment to healthy store brands, Maute says, massive drug chains and manufacturers could grow and develop the entire supply chain infrastructure to benefit both parties.
“In leveraging their enormous portfolios and great locations,” says Maute. “Chain drug stores could mainstream private label health and wellness products on a grand scale.”
If store brands are truly an extension of a retailer’s brand purpose (as they should be), then creating products that tell a valuable story to health-conscious consumers would increase shopper loyalty and set drug stores apart from competitors.
“The time is now to start leveraging scale, rebuilding the logistics side of the business, developing products that are ‘better for you,’ and making lasting commitments to brand-right private label strategies,” says Maute.
Read the full article in Chain Drug Review.