Room to Grow
Although many dogs have gone grain-free, there are still pet owners who have not yet jumped on board, giving pet specialty retailers plenty of opportunity to tap into this profitable category.
If one were to graph the sales trajectory of grain-free foods and treats, it would quickly become apparent that demand for these products is heading off the charts. One reason for this is that awareness of grain-free options and their benefits is still on the upswing, with no sign of leveling out soon. In other words, there remain plenty of potential converts to bring into the fold.
The other factor powering up sales is that there are more and more grain-free selections available, comprising an ever-growing segment in the food and treat categories. In fact, according to Dan Schmitz, national sales manager for Tuffy’s Pet Foods, a Perham, Minn., manufacturer of kibble and soft, moist treats for dogs and cats, more than 40 percent of the dog food currently on the market is grain-free.
“The pet owner is looking for a healthier life for their pet and believes that a grain-free diet will help obtain this,” he says. “[Consequently], the grain-free category is only going to increase in the years to come.”
Other types of grain-free alternatives are helping to fan the flames. For example, Jen Loesch, general manager for Sojos Pet Food, a St. Paul, Minn., maker of freeze-dried raw meats, toppers and oven-baked dog treats, describes grain-free, freeze-dried foods as the fastest growing category within pet foods.
“Numbers vary, but from what we’ve seen and heard, the category is growing at a rate of 30 to 40 percent per year,” she says. “There’s growing awareness that heat and other harsh processing can damage delicate nutrients. Raw food, on the other hand, is served the way nature intended, rich in naturally occurring nutrients and enzymes.”
In some cases, pet owners become interested in grain-free diets because their dogs are having allergy issues. Retailers should be dialed into these kinds of symptoms, says Rashell Cooper, marketing director of Redbarn Pet Products. Headquartered in Long Beach, Calif., the company provides a variety of premium products for dogs and cats.
“If their dog is showing signs of rash or skin irritations, chronic licking, chewing or biting to relieve itching or having frequent ear infections, they might have a food allergy,” she says. “These symptoms might be helped by switching to a grain-free diet.”
For this reason, and others, pet owners may want to avoid additives and fillers, says Loesch. “Dogs are carnivores and protein is part of their diet,” she explains. “Many foods don’t take this into account, using grain, corn and other plant-based fillers to help bind the food together and provide substance. While this food isn’t nutritionally ‘bad’ for the average pet, going grain-free allows the pet to reap the benefit of more nutrient-rich ingredients.”
And there are additional advantages associated with such diets, says Schmitz. Benefits dog owners will especially appreciate include more energy, less flatulence, smaller stools and shinier coats. Dogs will also stay fuller longer, he adds.
As more grain-free foods and treats land on the shelves, it’s worth bearing in mind that not all options are created equal. Carrying the label “grain-free” doesn’t automatically mean the product is healthier or of higher quality.
“Retailers need to look at the ingredient panel, as well as ask the manufacturer what types of ingredients are being used, to make sure they’re recommending a quality food,” says Schmitz.
Bryan Nieman, brand director for Fromm Family Foods, a Mequon, Wis.-based artisan pet food company that manufactures dry and canned foods and treats for dogs and cats, also stresses the importance of scrutinizing ingredients, especially in light of the consumer perception that grain-free options are inherently better than more conventional choices.
“We try to remind our retailers and pet parents that the inclusion or omissions of grains in a dog or cat’s diet is not directly related to the overall quality of the food or to the prevalence of exhibited sensitivities or allergies,” Nieman says. “We suggest shifting their focus from grains or specific ingredients to important factors such as the quality of the individual ingredients, the balance of macronutrients and micronutrients, overall digestibility and viable probiotics.”
Heather Acuff, customer care and product development manager for Nulo Pet Food, an Austin-based manufacturer of grain-free dry and canned foods for dogs and cats, says pet specialty retailers need to be aware that, in some cases, grains are being replaced with ingredients such as white potatoes or tapioca starch, or even higher-glycemic ones—something she says is “counterintuitive to feeding a grain-free product in the first place.” This becomes a particular concern in the case of overweight dogs, Acuff says.
“From a dog perspective, the continued rise of weight and weight-related conditions resulting from the overfeeding of high-carbohydrate diets impacts the grain-free category,” she says. “Simply removing grains but replacing them with high-glycemic ingredients can exacerbate health issues in pets, as some of these foods contain over 50 percent carbohydrate levels.”
One of the challenges facing pet specialty retailers is that there are now many grocery store brands flying the grain-free logo, says Schmitz. This makes the need to educate customers about ingredient quality and what constitutes healthful grain-free even more urgent.
Nieman agrees, emphasizing that retailers need to be informed and ready to pass on their knowledge to customers.
“We believe education is a vitally important part of the sales process,” he says. “Within the pet specialty segment, it’s incredibly important for retailers to have a good working knowledge of the brands and products they’re offering and the features and benefits. Retailers should take advantage of training and point-of-sale materials offered by brands to enhance their selling strategies.”
One of these strategies must involve engaging the customers in conversation about their needs, asking questions and taking a consultative approach, says Acuff. In addition to inquiring about the age and breed of the pet, she suggests asking why the owner is looking for a new food or treat and what specific qualities the owner is looking for when it comes to the food or treat.
Nieman also recommends asking about the pet’s current diet, any treats they get, activity level, weight and any health issues.
“Successful retailers take time to listen to their customers and get to know the pets they’re feeding,” he explains. “Understanding the pet’s current diet, activity level and health is imperative to solving any issues the pet may be experiencing and very helpful in calculating a suitable starting point for feeding a new food.”
Loesch says not to overlook customers who might be interested in feeding a raw diet. Ask them if they’re familiar with grain-free, freeze-dried raw products, she advises, in order to address any misperceptions they may carry, particularly given this category’s accelerating momentum and sales potential.
As for devising a grain-free stock assortment, expanding the real estate allocated to this category and offering a full range is the way to go, says Schmitz.
“With grain-free demand rising, specialty retailers should be devoting more space in their stores to this category,” he says. “Even within the grain-free market there are different segments, such as limited-ingredient, raw freeze-dried, frozen and dehydrated items. Offering a wider variety of different products within a particular category will allow a better selection to their customers. It also gives the perception that the retailer is an industry expert by having products that solve problems for each animal.”
Merchandising the store into these different segments has proven successful for retailers, Schmitz says, adding that taking this approach makes it easier to educate customers about the various options and makes the store easier to shop.
Retailers should also think about bringing in some unique, high-quality grain-free items they may not currently be offering, says Nieman. “This can help their bottom line by meeting an established and growing consumer demand with a product that will ultimately perform in the long term, leading to a satisfied, longtime customer,” he explains.
Additional merchandising best practices Cooper mentions include featuring educational material with grain-free products and using creative displays to catch the customer’s attention and support the grain-free message.
“Using an endcap, featuring different diets as a product-of-the-month, and moving grain-free options to the front of the store also work,” Cooper adds.
Store associate and customer education, carrying a varied assortment of high-quality grain-free products, intelligent merchandising and focusing on customer concerns and needs will allow pet specialty retailers to take full advantage of a category Acuff describes as having “steady growth and healthy margins.” But there’s more to it than this.
“With this approach, retailers can gently point owners in the direction of the appropriate product lines and educate the owner about the reasons for their recommendations, allowing the consumer to make an informed purchasing decision,” Acuff says. “This not only builds a strong foundation for a loyal customer relationship, it leaves the owner with confidence that they have made the choice that best suits their pet’s needs and their own.” PB