Who's picking up the Tylenol slack? Private store brands--and the drugmakers that supply them. In the wake of a series of Johnson & Johnson (NYSE: JNJ) consumer-drug recalls, retailers are stepping up their game, hoping to capture consumers disenchanted by those once-august brands.
Tylenol, Motrin and other brands affected by the J&J recalls are particularly vulnerable because many of those products are simply absent from store shelves. Plus, the company has to fix some serious manufacturing problems before it can start making and distributing them again. So, as CNN Money reports, drugstores such as Walgreens and CVS, and other retailers such as Wal-Mart, are stepping into the breach.
"Retailers are capitalizing on the situation," Robert Passikoff, branding expert with Brand Keys Consulting, tells CNN. "Strategically it makes good sense. When a truly competitive brand is vulnerable, it's an opportunity for rival brands to steal market share."
And this means that other drugmakers are turning out the drugs that J&J can't. Iceland's Actavis has a big private-label division, and that unit has ramped up production in a big way--five times what it was at the beginning of this year. "Over the last four months, there's been rather high demand from our retail clients to increase production," U.S. chief Doug Boothe tells CNN. With J&J expecting to keep a key consumer-drug plant closed well into next year, that demand could well continue.
- read the CNN Money story