Category Check: Tips to boost sales of over-the-counter medication at your convenience store
Sales of over-the-counter medications, from pain relievers to cold/flu remedies and throat lozenges, are nothing to sniffle at. It’s big business.
Revenues have increased by 4.7% in 2024, to the tune of US$3.6 billion, according to data published by Statista, with Canadians spending an average of $93.21 on OTC products. Looking into the crystal ball, compound annual growth rate (CAGR) in this category is predicted to be 4.09% 2024-2029.
The top three best-selling OTC categories in Canada are vitamins, pain relief, and cough and cold, which alone netted $760 million in sales for 2022. For convenience stores, there’s an opportunity to be a go-to retailer for when consumers are feeling under the weather. Statista analysts say our aging population and increasing life expectancy are contributing to the uptick in demand for healthcare products, including OTC medications.
Add to the mix, the sheer convenience and accessibility of OTC medications appeal to those who want to take care of minor ailments on their own. Long wait times at hospitals and doctors’ offices have also increased the attractiveness of non-prescription meds for treating non-emergency conditions, like coughs or fevers.
Get ready for the season
Looking ahead, past bathing suit season and toward Halloween, the proliferation of the 200-plus viruses that cause sore throats, congestion and general misery ramps up, reaching a peak between December and February. Along with those miniature treats for trick-and-treaters, convenience store owners should begin stocking all the essentials customers need to get through colds and flu, from grab-and-go, pocket-sized tissues to throat lozenges, pain relievers and immune-supporting supplements like zinc and vitamin C.
Convenience stores occupy a unique sweet spot in the cough/cold/OTC medications category. As Mark Elliott, brand manager, Regal Confections (makers of Bentasil), points out: “If someone is driving home from work, and isn't feeling well, the easiest place to stop is a convenience store. No lineups, fast to get in and out. When people get sick, they want relief from whatever symptoms they have and know that convenience stores will have throat lozenges and other OTC products readily available.”
More companies recognize the value of the C&G channel. “Regal Confections has been increasing its focus on it with the Bentasil brand,” explains Elliott. “Traditional focus was on grocery and drug stores. We see convenience as a key opportunity for growth.”
He adds that Regal Confections has secured listings for three flavours at 7-Eleven Canada for the 2024-2025 cough/cold season and Bentasil is available to independent convenience stores through avenues such as Sobeys Wholesale.
READ: Fever pitch: Are you stocked up for cough & cold season?
OTC inspiration
And speaking of 7-Eleven, let’s not forget that it launched its own private label line of OTC drugs a decade ago in the U.S. Categories of the 7-Select brand include pain relief, cold-flu-allergy, cough/throat, sleep aids and gastrointestinal upset. At the time, a company spokesperson said: "Just like when our customers are hungry or thirsty, if they come to our stores feeling ill, they have an immediate need they want fixed fast. With the new 7-Select high-quality alternatives to popular OTC drugs, we can offer them relief from their ailment with great products at value prices."
7-Eleven’s continued investment in OTC medications is something worth noting for c-stores large and small. The potential is there.
Promote soothing relief
If you drill down into just one popular OTC category—throat lozenges—there’s clearly attractive potential for c-stores to seize. Growth of these cough-easing, congestion busters outpace OTC medications as a whole. Estimates by Precision Business Insights peg the CAGR at 8.4% during the forecast period 2024-2030, driven by the rising prevalence of respiratory problems and focus on cost-effective solutions. The global market just for throat lozenges is somewhere in the neighbourhood of $7 billion.
Over the last four to five years, the market has been challenging for companies. “During COVID, the sales of all cough/cold products dropped precipitously due to social distancing and countrywide lockdowns,” notes Elliott. “When everyone started socializing after restrictions were lifted, it caused a resurgence in various viruses that cause common colds. As a result, there was a huge increase in the sales of OTC products post COVID. In addition, almost every supplier of these types of products had supply chain issues at some point due to myriad worldwide shortages of supplies and shipping complications. The past season has seen a moderation of those sales and a return to more historical norms.”
“If someone is driving home from work, and isn't feeling well, the easiest place to stop is a convenience store. No lineups, fast to get in and out. When people get sick, they want relief from whatever symptoms they have and know that convenience stores will have throat lozenges and other OTC products readily available” - Mark Elliott, Regal Confections
It's a fiercely competitive category. Shoppers have their favourites but may be swayed to try others that have new and interesting flavours or promotional pricing. Bentasil, which offers soft, chewable lozenges, has Eucalyptus, Blackcurrant and Orange with Vitamin C SKUs.
Meanwhile, at Ricola, efforts have been concentrated on providing new formats with sticks and, most recently, boxes available for Berry Medley, Lemon Mint and Peppermint. They are low sugar/no sugar added, portable, great tasting and ideal for everyday throat health, according to Jan McCallum, senior business development manager North America. “It’s the number one format globally for Ricola, already sold in more than 50 countries. In some markets, it is the number one confectionary item.”
Fisherman’s Friend has been around since 1865. While the lozenges have changed little, the brand continues to innovate, adding sugar-free options and new flavours, like Orange Spice. Voula Papadakos, the brand’s marketing manager, suggests convenience stores stock top sellers like Original Extra Strong and Cherry, alongside others like Mint and Citrus, to provide consumers with “a much-needed variety of choices.”
All throat and cough lozenge companies agree that strategic placement is key—high-traffic areas, such as near the checkout counter, and at eye level to attract consumer attention. Go that extra mile with bundled deals, eye-catching displays and related cold and flu products grouped together. Your customers will appreciate it. Colds are the leading cause of missed work and school days. On average, Canadian adults will get two to four colds a year, while children exceed that with six to eight colds. And having a great selection of OTC medications available in-store will help cure what ails them.
C-store IQ: Fast facts
9% of c-store shoppers say they purchased OTC medications from a convenience store in the last month, according to data from the 2024 C-store IQ National Shopper Study.
Top 5 ways shoppers define convenience and why c-stores are the ideal go-to retailer for OTC needs.
1. Close by/proximity
2. Affordable prices
3. Has basic necessities
4. Quick to shop
5. Longer hours
