Pet Food Evolution

Dog and cat food are the lifeblood of pet specialty stores, providing them with the repeat customers they need to thrive.


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Pet food has always been at the heart of pet specialty stores, with cat and dog food serving as the industry’s lifeblood, ensuring a steady pulse of sales and profits. Stores that get their pet food strategy right are likely to live a long, healthy life—and stores that do not tend to flat-line quickly.

Yet the category has evolved significantly over the years; what started as one man’s idea for a dog biscuit has turned into an industry projected to make $23 billion in 2015, according to the American Pet Product Association. In order for an independent pet store to remain healthy, with strong sales and good profit margins, it is essential that the store create a strategy for using pet food to build a loyal base of repeat customers.

One way to do that, says Michelle Higdon, CEO of Solid Gold Pet, is by carrying good brands that specifically aim to serve the independent pet specialty market. “The broader the distribution of a brand, the less retail loyal the consumer has to be,” she says.

Solid Gold Pet is one such independent-focused brand. It offers a variety of holistic pet food options, including 17 new formulas for dogs and cats across the company’s grain-free, gluten-free and heritage lines introduced this year. “Pet food is the foundation and key to success for any pet retailer, and therefore, it plays a pivotal role in their long-term viability,” says Higdon.

Many retailers do this by establishing their own standards that individual cat and dog food diets must meet in order to be considered for their shelves; for example, some stores choose to specialize in natural products only, and their nutrition selection reflects that.

Other retailers seek to lure customers in with more widely known diets and then work to educate shoppers and trade them up to higher-margin, better-quality brands.

Regardless of which strategy a store chooses, however, it is essential that retailers understand not only the importance of food for the health of their store, but also for the health of the pets their store serves. “People are becoming more health conscious and knowledgeable about proper nutrition, which also influences the way they feed their pets,” says Higdon.

“People are increasingly concerned with what they eat and where their food comes from, and this concern has influenced the pet food space as well,” agrees Carly White, digital marketing specialist at WellPet, makers of Wellness pet foods. “More and more, pet parents are taking an active role in their pet’s nutrition, with a focus on quality ingredients that are [conscientiously] sourced.”

In fact, that is what led WellPet to recently add several new products to the Wellness CORE family of grain-free recipes. “All packed with the high-quality protein that consumers expect from CORE, balanced with fresh fruits and vegetables, the additions include CORE Air Dried dog and cat food or topper, CORE Chunky Centers wet dog food, and CORE 95-percent wet dog food or topper,” says White.


What You Need to Know About Nutrition
Within the larger trend of pet owners becoming increasingly interested in nutrition, however, retailers are likely to find there are two types of pet food shoppers—the self-educated shopper, who is seeking to find a store that is aligned with their existing knowledge and beliefs around nutrition,;and the want-to-be educated shopper, who seeks out stores as a resource for learning more about nutrition.

In either case, a deep working knowledge of the diets a store carries and how to make good recommendations is essential to maximizing success within the cat and dog food categories. Without this, it becomes impossible to successfully make recommendations and explain the various qualities of the different foods available—and with all the options in the market today, that almost guarantees the shopper will fail to buy, nevermind fail to become a loyal repeat customer.

Fortunately, retailers have a fantastic educational resource available to them that few pet owners have access to—the very companies that make the food. “Retailers should maximize the partnerships they have with manufacturers in an effort to effectively deliver on the challenge [of educating] consumers,” says Higdon.

With today’s technology, this doesn’t even always require face-to-face training—many manufacturers have expanded their available resources to include videos, webinars, website content and more, specifically targeted at helping specialty stores understand their products and providing those stores the tools they need to properly pass that knowledge along to the pet owner.

Still, what specific information should retailers get from manufacturers? White says that WellPet has very specific items it tries to ensure its retail partners are educated on. “Our goal in working with retail partners is to help them understand the order in which ingredients are listed, where the ingredients are sourced, and the nutritional value and health benefits of each recipe,” she says.

“The most important values that pet specialty retailers bring to the category are a solid understanding of pet food ingredients and the ability to educate consumers in order for them to make an informed choice when it comes to choosing a pet food for their cat or dog. As more competition evolves in the big-box stores, consumers still rely on specialty pet stores for the variety they offer and the innovative products they carry.”

“Independent pet stores have the opportunity to educate and provide high-touch service to the shopper in a way that mass and grocery stores are not able to,” agrees Higdon. And it is the combination of having the flexibility to respond to trends and the deep knowledge of product ingredients and nutritional information that have allowed the best pet specialty stores to thrive.


Do Your Homework
It is also important for retailers to look into the history of any brand they carry. The pet food recalls of 2007 were a major driver behind the first wave of pet owners interested in researching the foods they choose to feed their pets.

“Recalls across any industry bring a level of sensitivity and scrutiny amongst all stakeholders,” says Higdon. However, she says, the reality is that any sort of recall often pushes manufacturers across the industry to evolve and become better.

“At Solid Gold, we are pleased to employ a multi-step quality assurance program in an effort to avoid food safety issues,” says Higdon. “Our safety-first philosophy is focused on consistency, redundancy and transparency.”

Many manufacturers now have similarly established safety procedures and have taken increased measures to ensure safety, but understanding these measures is crucial for retailers, in case customers ask—after all, there is no greater impediment than a customer knowing the recall history of a brand you sell better than you do to convincing them you are the expert they were looking for.

Another reason it is important for retailers to talk to manufacturers has to do with the strict guidelines food companies face when creating packaging labels for their products. Holly Sher, president of Evanger’s Dog and Cat Food Co., says her company used to label its products GMO and hormone free—both factors that shoppers value.

But then regulators forced her to remove both labels from her products; they said all animal protein tissues contain hormones, and that because there was no official definition of or threshold for “GMO-free,” she wasn’t allowed to use that term. “[Even though] we do buy non-GMO and antibiotic-free [ingredients], we can’t even advertise that which is a shame,” she says.

Sher isn’t alone; other manufacturers have been forced to revise labeling claims as well, often removing key information shoppers may actually be specifically looking for. When these kinds of label changes happen, it is essential that retailers are aware of what’s changing and why—so they can assure customers that the diet itself isn’t changing, just the label, and so that they can answer questions about these kinds of buzzwords and explain to customers what regulations exist around their usage.

Of course, pet specialty retailers can’t possibly know every single thing about every single product (though the more they know, the better); so how can they determine which things have the highest priority?


Predicting the Next Big Thing
The simplest answer is by staying up-to-date on the latest trends by reading industry publications, attending trade shows, and by talking regularly with distributors and customers.

There are four trends, in particular, impacting the dog and cat food market currently that retailers should all be aware of: the growth of functional ingredients, the influence of human trends, the customization of pet food and a back-to-nature movement.

Functional Ingredients—From diets that include omega-3 fish oil, glucosamine, chondroitin and other supplements to diets with ingredients like sweet potatoes, acai berries, blueberries and more, the industry is seeing a rise in diets that include key ingredients that people recognize as good for their pets. As pet owners examine ingredient panels, it has become increasingly important that every item on the ingredients panel needs a reason to be there that clearly benefits the owner’s cat or dog.

Influence of Human Trends—Ever since humanization first took off, trends in the human market have increasingly influenced trends in the pet industry, and nowhere is this more prevalent than in the food category. Watching trends in human nutrition is easily the best way to predict the next big thing—history shows that how pet owners decide what’s important for their pets is largely driven by what’s important for them and their (human) family. For example, if they decide they should be eating grain or gluten free, then they become interested in having their pets eat that way too.

Customization of Pet Food—The customization of everything is another trend that got its start in the human market and has made its way into pet food. Generic products just don’t hold the same appeal when there is another option that is clearly targeted directly at a pet’s specific health issues, life stage or breed. This trend has given rise to alternative protein diets for pets with allergies; weight-loss diets for obese pets; puppy and senior diets for pets of specific ages; and even breed-specific diets.

Back-to-NatureMovement—The back-to-nature movement is the driver behind the growth of the freeze-dried and raw food trend. The concept is that dogs and cats evolved eating primarily meat-based diets with very little else. Raw food and freeze-dried food advocates claim feeding these diets allows for optimized nutrition, since these are the diets our furry friends evolved to eat. Regardless of reason, the category has definitely taken off.

Lanny Viegut is CEO of Vital Essentials, which pioneered the ALPHA Prey-Model in 1967. He says the company is currently welcoming thousands of new pet parents to the raw category each week. “Increasingly, pet parents are learning of the health benefits of raw diets and are seeing, first-hand, the real-word impact of a raw diet as they transition from traditional kibble,” he says. Viegut predicts raw and freeze-dried are the “category of the future.”

While the raw food category often requires some extra investment from retailers in terms of freezers to store product in, it is often seen as the “best” option in a traditional good-better-best model, which means it comes with good profit margins and helps set a store apart from mass and grocery, few of which have even tried to offer any type of fresh or freeze-dried pet foods.

Despite the importance of staying abreast of the latest trends, retailers should by no means try to stock all of them. “Pet retailers need to look at trends with a discretionary lens, which isn’t always easy to do,” says Higdon. “There have been many trends across the years that helped shape the industry in a meaningful way, while others have merely resulted in passing fads.”

Instead, retailers need to know their store’s core customer base and seek to stock the items that resonate most with the local demographic. That information, combined with a focus on products that best serve the health of pets, will help ensure dog and cat food sales continue to keep pet specialty stores’ bottom lines in a healthy place.

 

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