Against the Grain
Although grain-free foods and treats have leapt into the mainstream, pet specialty retailers are staying competitive with compelling inventories and customer-focused service.
Pet specialty retailers were among the early adopters of grain-free foods and treats, and they have played a pivotal role in spreading pet owner awareness of these products and their benefits. Of course, there have been other trends also propelling the product category. People are becoming more focused on the quality of their own diets, a concern that has trickled down to their pets. At the same time, more grain-free products are hitting the marketplace, expanding consumers’ options and their interest in this category.
As a result, the grain-free pet food category has gone mainstream, escaping the confines of the pet specialty retail arena and moving into mass retail and grocery. Although at first blush, this might seem a worrisome prospect, it is really not so dire, say manufacturers. Still, competition from mass and grocery in the grain-free category requires independent pet retailers to fine-tune their inventories and sales strategies, says Anthony Bennie, founder and chief nutrition officer for Clear Conscience Pet, a Wilton, Conn.-based, pet food manufacturer.
Retailers have to narrow their focus and hone in on quality products that more accurately deliver the characteristics pet owners are seeking, Bennie explains. “In addition to being grain-free, it’s important to be low-carb, meaning that you’re feeding a meat-eating animal a diet more suited to them—more meat,” he says. “The lesson for pet specialty retailers is that a product should not only be grain-free, but [also] low-carb.”
Making this distinction to pet owners is important, Bennie says, because it will not only result in healthier pets, it will also help independent retailers differentiate themselves from their outsized competitors and become a destination point for nutritional advice. It is a strategy that should pay off in higher customer loyalty and a stronger business.
Michael Landa, founder and CEO of Nulo Pet Food, an Austin, Texas-based provider of super-premium, grain-fee kibble and canned foods for dogs and cats, agrees that the carbohydrate content of grain-free foods and treats is primary. “It’s not whether grain-free is right for every dog—it’s whether every grain-free is right,” Landa says, noting that some grain-free products still incorporate less-expensive, higher-glycemic ingredients such as tapioca, which can undermine the nutritional benefits.
“What you’re ideally looking for is carbs under 35 percent for dogs and 25 percent for cats. That way you can be assured of a diet higher in meat/fish and lower in carbs,” he adds. “While some amount of carbs is required as a binding agent for kibble, excessive amounts, particularly the high-glycemic type, can lead to weight gain and other complications in pets.”
Grain-Free Growth Ahead
According to manufacturers, there is still plenty of room for growth in the category, as more pet owners transition from conventional products to grain-free foods and treats. In fact, says Chris Meiering, director of marketing for Zuke’s, grain-free items are driving purchasing in the treats category, which itself is going strong. Based in Durango, Colo., Zuke’s offers a broad selection of grain-free, natural dog treats and chews, and cat treats.
Also helping to fuel sales are consumers’ changing attitudes toward products containing grains, explains Scott Whipple, co-founder of CANIDAE Natural Pet Food Company, a family-owned company, headquartered in Norco, Calif., that provides grain-free, limited-ingredient formulas for dogs and cats.
Whipple says the humanization of pets is leading many consumers to be more discerning about pet food, applying standards they have for their own diets to their pet food choices. “A large segment of consumers are eating fewer carbohydrates, such as breads, pastas and so on, and they’re increasingly seeking the same foods for their pets,” he says. “This is in line with the trickle effect over the last 20 years from human wellness trends down to the pet food industry.”
Still, even though grain-free products continue to show growth at the pet specialty level, they nevertheless comprise a small portion of the overall market space. “But the silver lining is that there’s a lot more potential for the grain-free market to grow and attract mainstream consumers,” Whipple adds.
In order to expand demand and sales, pet retailers should sell their customers on the wellness advantages of a grain-free diet, rather than focusing strictly on product features, says Bennie. Among some of the benefits dog owners may see in their pets—especially those with grain sensitivities—include better muscle tone, improved skin and coat, reduced allergies, stronger vitality and more energy, he says.
Dr. Chris Bessent, DVM, CEO of Herbsmith, Inc., a Hartland, Wis.-based provider of herbal supplements, and freeze-dried and dry-roasted grain-free treats for dogs and cats, has also witnessed significant turnarounds in a pet’s health when placed on a grain-free diet.
“We were seeing a lot of dogs experiencing various problems on grain-based diets,” says Bessent, a holistic vet who still practices part time. “These same dogs thrived on a high-quality, grain-free diet. Food is the foundation of health. Everything you put in a dog’s or a cat’s mouth has a positive or negative effect.”
Bessent says pets readily accept grain-free foods and treats, predisposed as they are to prefer meat. This acceptance is not only good for the pet; it benefits retailers, as well, since the pet owner will see how well the dog takes to the item and will feel that their money was well spent. Bessent advises pet retailers to offer samples—either sampling in store or providing them for customers to try at home.
Retailers should be aware that consumers often perceive premium, grain-free foods and treats as being more expensive than mass-market brands, which may carry a lower price per pound, says Whipple. However, because grain-free options tend to be more protein and nutrient dense than their conventional counterparts, the daily cost of feeding often works out to be less expensive, particularly since the pet tends to eat less because of getting fuller faster and staying satisfied longer.
Retailers would also do well to explain to customers that the products are priced according to the value of their ingredients, says Tommy Gay, president of Big Creek Foods LLC, a Gainesville, Ga.-based company that produces a wide range of grain-free dog treats.
“Consumers understand that quality comes at a higher price,” says Gay. “This hasn’t been a detriment to sales growth, but rather an added method of separating high-end products from the less-than-quality treats that flood the market.”
Gay says retailers that establish designated grain-free sections, supported with call-outs that highlight the product’s qualities, will see a boost in sales. Stores should also consider using stack-out displays and endcaps, adds Whipple.
“These are powerful tools in merchandising product, as well as using the necessary point-of-sale signage and banners for these displays,” he says. “We found that the majority of the time, consumers base their purchases on what they see displayed. Therefore, effective displays increase the retailer’s average ring in the long run.”
Taking a judicious approach when it comes to the amount of grain-free inventory a store will carry can also help. As Meiering explains, customers are looking for these kinds of products, but the marketplace has become so crowded with them that making an “educated buying choice” can often be challenging for consumers.
In fact, some manufactures contend that product and brand oversaturation is hurting independent stores. “Retailers are losing their effectiveness because they don’t know what to recommend,” Bennie says. “And when you have that many products in the store, the manufacturer is selling the product, through their packaging, marketing and advertising. They’re taking over the relationship with the customer, not the pet specialty retailer. This means that retailer has just lost the advantage over the grocery and mass, because the customer can go there and get the product at a cheaper price.”
He suggests that retailers adopt a three-tier pricing strategy, offering an entry-level price point, a step up from this, and then what the retailer considers top of the line. This will not only help retailers appeal to a broader range of customers—and budgets—but will assist them in regaining control over their inventory, Bennie adds.
Sealing the Deal
Retailers should also spend sufficient time and effort on wowing their customers, says Whipple, mentioning that research indicates that around 70 percent of consumers purchase their dog food at various outlets—such as feed stores, mass, pet chains and grocery—in addition to their favorite pet specialty store.
“Therefore, this majority represents a big opportunity for the independent channel to educate and fully convert the consumers to shop with their store more consistently by exceeding their expectations,” he says.
It is also important to steer customers to the most appropriate products for their particular pets by asking the right questions. This should be a retailer’s first goal, says Meiering.
Salespeople will have to discern basic information such as age, breed and weight. These details help define which diets are best for a pet. For example, Landa says, “If weight is an issue, be sure to review the feeding guidelines, as more premium foods with concentrated nutrition will require less than what the customer may have fed historically.”
Bessent suggests inquiring if the dog is a picky eater. If so, this is likely a dog desiring more meat-based products, she says. “Also ask if the dog has any chronic inflammatory processes, such as itchy skin, hot/red ears, bad gas or loose stools,” she says. “If so, grain-based foods and treats can make this worse; dogs should improve on grain-free products.”
One of the most important questions to ask, says Bennie, is how they’re doing with their current food. “Ask this rather than asking if they’re happy with their current food, to which they’ll most likely say ‘yes.’ But asking an open-ended question will get them thinking and open up areas of deficiency.”
Offering an array of quality grain-free options and connecting with customers will serve independent retailers well, giving pet owners a reason to head to a pet specialty store rather than some other kind of outlet, says Whipple.
“Pet specialty retailers can enhance their store’s reputation by offering and recommending a high-end grain-free product to customers,” he says. “It’s everyone’s responsibility in the pet specialty space to continue to build a solid relationship with the consumer by offering excellent service and increasingly differentiated products.”