Reaction to H1N1 Boosts Sales for Household, Personal Care Marketers

Brands Like Johnson & Johnson See October Numbers Increase Thanks to Fears Over Health Epidemic

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BATAVIA, Ohio ( -- The H1N1 virus is saving household, personal-care and over-the-counter drug marketers that are seeing huge sales increases in products to fight the epidemic –- enough to make almost all the difference between a flat month and respectable 3.5% sales growth for the industry in October.

J&J's Purell hand sanitizer
J&J's Purell hand sanitizer
Year-over-year double- and triple-digit sales increases in such categories as hand sanitizers, cough/cold/allergy medications, analgesics and diarrhea medicine produced $208.8 million in incremental sales in food, drug and mass channels tracked by Information Resources Inc. in the four weeks ended Nov. 1 alone, according to IRI data from Deutsche Bank.

That accounted for 77% of the industry's overall $273 million in incremental sales, which represented a 3.5% gain over the year-ago period.

Other categories seeing sales gains spurred by H1N1, in most cases double-digit ones, include facial tissues, sore-throat remedies, spray disinfectants, disinfecting wipes and moist towelettes. They accounted for another $25 million to $30 million of the industry's incremental sales lift.

Considering IRI data doesn't include Walmart, club or dollar stores, the total four-week impact from H1N1 on home and personal care and OTC sales likely topped $350 million in October. At that pace, total impact on the industry could easily reach $1 billion from the epidemic, which began in April.

October's biggest winner was Johnson & Johnson, which competes in most of the biggest affected categories -- including hand sanitizers, cough/cold/allergy, diarrhea medicine and analgesics. J&J's sales in tracked channels soared 10.7% for the four-week period. That beat even private label, the big winner throughout the recession, with sales gains of around 8%.

"J&J probably didn't even realize they were buying Purell when they bought Pfizer," said Deutsche Bank analyst Bill Schmitz. "Suddenly, it's become this huge business."

While home and personal-care marketers have seen sales growth the past year, those gains have been driven entirely by price increases. The latest four-week period is the second consecutive to see an actual volume gain (up 0.8% in each period), in each case fueled heavily by H1N1-related purchases.

Prior to that, volume had been declining since early 2008, as what was once thought to be a recession-proof industry discovered people do indeed wash, shave and make themselves up less in a recession, as unemployment rises and nights out decline.

While H1N1 is helping counteract the recession, Mr. Schmitz said marketers will have a tougher time growing next year due to comparisons to this year's H1N1-inflated sales. Some are hoping consumers will permanently change behavior to use more disinfectants and hand sanitizers even after the flu subsides, he said, but he doubts they'll succeed.

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