Ultra Beauty: Chemist Warehouse on a mission to expand beauty-from-within retail
Touted Australia’s largest pharmacy, Chemist Warehouse gave insights on sales of beauty-from-within across the country’s major retail channels, as well as the best-selling brands and ingredients from its stores.
Ilias Babalis, general manager, sales at Chemist Warehouse/MyChemist Retail Group presented the insights when speaking at the Complementary Medicines Australia (CMA) Innovation Seminar and Supplier Expo which took place in Sydney on May 5.
The beauty category is a focus for the retailer which also runs another beauty, cosmetics and skincare retail chain known as Ultra Beauty in Australia.
Currently, there are nine Ultra Beauty stores plus an online store, and the plan is to roll out another 15 stores, with a store in every state and territory across the country in the 12 months.
“There is an obvious synergy between beauty and VMS (vitamins, minerals and supplements), especially when you look at the beauty-from-within space and products that are driving growth in this sector,” Babalis said.
Babalis pointed out that Chemist Warehouse and My Chemist retail stores were dominating the country’s beauty-from-within retail – with the largest market value share. The grocery retail channel is a distant second, followed by community pharmacies.
“Chemist Warehouse continues to lead the beauty-from-within category. However, grocery significantly over-trades, admittedly from a lower base, and community pharmacies are growing, but are behind the category.
“When thinking about what’s next and what’s new, knowing that a) the beauty-from-within space is very much within the growth stage, b) there are pending changes to the industry because of new ownership ventures and c) we are actively engaging customers, not only within the beauty space, but in a way that adds premiumisation to the category, then we are on a mission for expansion, that's a hint for everyone,” Babalis said.
So far, Chemist Warehouse has 473 outlets in Australia, 32 in New Zealand, five in China, and four in Ireland – which it opened during the pandemic.
Different brands lead different retail setting
Interestingly, the bestselling beauty-from-within brands differ from stores to stores.
Swisse, Nature’s Way, and Blackmores are the key growth drivers for Chemist Warehouse’s beauty-from-within retail.
Swisse, for example, has a MAT value of AUD$10m (US$7m) in Chemist Warehouse, Nature’s Way at the second place with AUD$7.5 (US$5.3m), while Blackmores came in third at AUD$3.6m (US$2.5m).
Beauty-from-within is one of the five main categories that Swisse is focusing on for its new product development.
However, elsewhere in grocery stores, Nature’s Way has outperformed Swisse, with a MAT value of AUD$9.4m (US$6.7m), versus Swisse’s AUD$6m (US$4.2m).
Blackmores’s MAT value in the grocery sector was slightly lower than its performance at Chemist Warehouse at AUD$3.6m (US$2.5m).
Within community pharmacies, each of the aforementioned three brands has a MAT value of AUD$1.5m (US$1m) in community pharmacies, behind JS Health.
“JS Health is by far the largest brand in community pharmacies, and is still in significant growth,” Babalis said.
The top three products from JS Health in community pharmacies are namely its Hair and Energy Formula capsules, Skin plus Digestion film coated tablets, and Vitality X Plus Collagen Nourish Plus Glow.
Blackmores Insolar Tablets 500mg and Swisse U/B Hair Skin and Nails Tablets took the fourth and fifth place.
Another lesser known brand to watch out for is Dr Lewinn’s.
Babalis said the brand was fast catching up and could in fact squeezed its way into Chemist Warehouse’s top three bestselling brands in 12 months’ time.
Dr Lewinn’s is already worth AUD$1.2m in just over a year and is on track in becoming the number 3 brand in the next 12 months
- Ilias Babalis, General Manager, Sales, Chemist Warehouse/MyChemist Retail Group
Dr Lewinn’s Marine Collagen Peptide Inner Beauty Liquid Shot 50ml is one of the popular products from the brand in Chemist Warehouse.
“Growth in Chemist Warehouse is coming from a range of brands, ingredients, and formats, showing that this is a very dynamic segment driven by innovation.
“Chemist Warehouse does differentiate with larger pack sizes, which are also driving growth. Our dedication to space allows customers to trade up,” he said.
The following is a table of the top 10 bestselling beauty-from-within products in Chemist Warehouse. The data was shown by Babalis showed during his presentation.
In the grocery stores, hair skin and nails products from Swisse, Blackmores, and Nature’s Way took the top three spots in terms of MAT value.
In the fourth and fifth place are collagen tablets by Nature’s Way and Swisse.
Bestselling ingredients
Ingredients wise, collagen remains the key ingredient across the category and is the fastest growing in all retail channels.
For Chemist Warehouse, the MAT value for collagen is AUD$16.9m, while that of grocery stores and community pharmacies are AUD$13m and AUD$3.4m, an increase of 29 per cent, 23 per cent, and 29 per cent respectively.
Hair, Skin, and Nails (HSN) combinations are second on the list, with a MAT value of AUD$8.9m in Chemist Warehouse, AUD$9.1m in grocery stores, and AUD$5.2m in community pharmacies, and saw MAT value grew nine per cent, 17 per cent, and 16 per cent respectively.
Hyaluronic acid, a relatively new entrant to the beauty-from-within scene, has a MAT value of AUD$0.3m in Chemist Warehouse and AUD$0.1m in grocery stores.
