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Test kits good fit for chains.

NEW YORK -- While products intended to help consumers avoid unwanted pregnancies make up the largest portion of the family planning category, items designed to help users plan and manage desired pregnancies comprise an important segment.

The at-home diagnostic test kit market in the United States reached an estimated $56.3 million in sales last year, according to Global Information Inc. (GII), a research firm. Sales are expected to grow at a compound annual rate of 19.4% from 2002 through 2007, totaling more than $111 million in the final year of the study period.

A major driver behind that growth has been what the GII report describes as "groundbreaking success" for pregnancy tests, which has paved the way for broader consumer acceptance of such related products as ovulation tests kits and even male fertility tests.

The market-share leader in the over-the-counter home pregnancy test and home ovulation/ fertility test markets is Inverness Medical Innovations Inc. Holding the No. 1 position in all three price segments--premium branded, discount branded and private label--the company is the leading supplier to such major drug chains as Walgreen Co., Rite Aid Corp. and CVS Corp.

"Offering a selection of products across all price ranges is important in this category," says a merchandising executive at Brooks Pharmacy. "Some shoppers know just what they want and are only interested in paying the lowest price. Others may be influenced by ads they have seen and are looking for a particular brand."

Retailers and manufacturers agree that this is a category where access to consultation with a knowledgeable store associate or pharmacist can play an important role.

"We get a lot of questions about (pregnancy and ovulation) test kits," notes a department manager at a Wal-Mart Stores Inc. Supercenter in New York. "If our store associates can't answer the customer's questions, we refer her to the pharmacist."

While the market for these products is highly defined, the category still responds well to traditional merchandising techniques, retailers report. Such leading supermarket and food/ drug combination store chains as Albertsons Inc. and Stop & Shop regularly promote test kits both in store and in advertising flyers.

"It helps raise consume r awareness that Stop & Shop is a place where they can find products to meet all their health care needs," comments a spokeswoman for that chain.

A major development in the category has been the introduction of digital pregnancy test kits. Inverness received approval from the Food and Drug Administration last year for the marketing and sale of Clearblue Easy Digital, which the company describes as "the first significant change in home pregnancy testing in over a decade."

The digital display spells out "Pregnant" or "Not Pregnant," eliminating the need to interpret result lines. Consumers previously had to wait for the appearance of a colored line on a pregnancy test, often misinterpreting the results due to the relative darkness or intensity of the line, according to the spokesman.

"With Clearblue Easy Digital's innovation in pregnancy testing, women can finally be confident when getting their test results," he says. "Even if there are low levels of hCG (the hormone indicating pregnancy) present, the test clearly displays the result in words so that there is no need to interpret lines."

The introduction of similar products by competitors led to patent battles that have since been settled. As a result, Inverness now supplies a digital version of e.p.t., the premium-brand pregnancy test marketed by Pfizer Inc.'s Warner-Lambert Co. subsidiary.

It also acquired the rights to pregnancy tests and other diagnostic products from Abbott Laboratories Inc. That deal includes the Fact Plus pregnancy test, Abbott TestPack, Abbott TestPack Plus and Signify.

Many retailers include store brand home pregnancy tests in their merchandise mix, including CVS, Rite Aid, Target Corp., Walgreens and Wal-Mart (under its Equate label). Even some dollar store chains, such as Family Dollar and Dollar General, now offer private label home pregnancy tests.

Such ovulation test kits as Carter-Wallace Inc.'s Answer, Church & Dwight Co.'s First Response--the No. 1 pharmacist recommended brand--and Clearblue Easy, help couples who are trying to conceive a child improve their chances of success.
Prediction Kits

                              DOLLAR SALES           UNIT VOLUME
                          $37.6 mil. (-3.6%) *   1.4 mil. (-5.4%) *

                             Percent Change         Percent Change
                                  vs.                    vs.
                            Prior 12 Months        Prior 12 Months
For 52 Weeks                  Supermarkets           Supermarkets
Ending 12/28103                  +1.9%                  +1.3%
                               Drug Stores            Drug Stores
                                 -3.4%                  -1.7%

Top Brands                      Dollar                  Unit
                                Sales **              Volume ***

1. Clearplan Easy              $20.9 mil.              0.5 mil.
2. First Response                4.1 mil.              0.2 mil.
3. Anwer Quick & Simple          3.4 mil.              0.2 mil.
4. Inverness Medical             1.9 mil.              0.1 mil.

* Total of supermarkets, drug steres and discount stores excluding
Wal-Mart Stores Inc.

** All private label brands combined total $6.5 mil.

*** All private label brands combined total 0.4 mil.

Source. Information Resources Inc.
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Title Annotation:Family Planning
Geographic Code:1USA
Date:May 3, 2004
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