While raw pet food sales continue to increase, consumer perceptions remain a hurdle that every pet specialty retailer must overcome to be successful in a category full of possibilities.
The raw pet food category is a good news/bad news paradigm. While sales are continuing to rise, that growth has been slowing down recently. More consumers are learning about raw diets, but there are still some negative perceptions. Overall, though, raw pet food is gaining, and retailers are seeing opportunity and expanding their selections.
There has been growth across the various formats of raw pet foods, says Maria Lange, business group director for GfK’s Pet Care POS tracking team in New York. “If we’re looking at frozen as well as freeze dried, dehydrated and kibble-plus, all of them are growing rapidly,” she says.
Added together, the raw pet food category totaled $393 million in sales in 2016, compared to $277 million in 2015, according to GfK’s data, which is collected from pet specialty retailers across the U.S. The biggest segment is kibble-plus, which includes mix-ins, toppers and inclusions, at $196 million—up from $115 million in 2015. Frozen totaled $96 million, compared to $84 million the previous year. Dehydrated totaled $35 million in 2016, up from $26 million in 2015, and freeze-dried totaled $66 million, up from $52 million.
The category does have some challenges, including the lasting impact of pet food recalls in 2015 and 2016, as well as stalled innovation in the frozen segment. According to GfK, the frozen category saw a 1.4-percent increase in new items launched in 2016, which represented a slowdown compared to previous years. Meanwhile, the kibble-plus segment saw a 6.3-percent increase in new items launched in 2016, compared to 4.3 percent for freeze-dried and 3.4 percent for dehydrated.
“Manufacturers and brands are being more cautious,” says Lange.
Still, many brands continue to see great potential in raw foods and are adding these products to their lineup, says Kevin Malnor, vice president of sales and marketing for Vital Essentials in Green Bay, Wis.
“We’ve received an influx of inquiries about our private-label capabilities,” he says. “There’s an extremely high level of interest from brands globally seeking products that help them either enter the raw category or extend established brands. Overall, this is having a positive effect on the category, bringing greater awareness to raw feeding.”
The company recently launched Vital Treats for Dogs—Turkey Fries, which it says are morsels that have long been used in the culinary world.
“There are no boundaries when it comes to ideating new products, and we’ve flourished with our trial-and-error approach to product development,” says Malnor, adding that all Vital Essentials pet foods are sourced, made and packaged in the USA. “Our greatest success is in sourcing exotic or never-before-used materials.”
To help increase awareness, Vital Essentials offers educational seminars in which nutrition experts teach retailers and consumers about the nutritional benefits of feeding raw and dispel misconceptions about raw pet foods.
Reed Howlett, CEO of St. Louis, Mo.-based Nature’s Variety, maker of Instinct dog food, agrees that education is key. Consumers are paying attention to ingredients and processing. “We’re helping them cut through the buzzwords like ‘grain-free,’ ‘natural,’ ‘organic’ and ‘clean’ to be more informed on what really matters to them,” he says. “The food itself has always been simple, pure and made with whole-food ingredients, but we’re making it simpler for the consumer to understand that quickly.”
Instinct partners with retailers to provide educational material that explains raw and its benefits in easy-to-understand terms. The company also provides how-to videos and other shareable content. Last year, it introduced two varieties of Instinct Raw Bites for Small Breed Dogs and Instinct Raw Boost Mixers, frozen raw bites for topping kibble. The company is also refreshing the Instinct brand with new packaging and recipes.
The presence of frozen raw foods in pet stores is growing as more retailers install freezers. According to GfK, 57.8 percent of stores now offer frozen raw pet foods, a significant increase since 2012, when they were available in less than 38 percent of stores. The freezers are great eye-catchers that help encourage sales.
“We are getting many requests from across the country about participation in purchasing these freezers,” says Tracey Hatch-Rizzi, vice-president and co-founder of Radagast Pet Food, Inc. in Portland, Ore. “I can’t see a better way to get customers’ attention than having a beautiful, bright, lighted display for their raw.”
The company recently added Natural Pork Recipe to its Rad Cat Raw Diet line for cats. The pork is humanely raised without antibiotics, hormones or growth stimulants. Radagast Pet Food also has new packaging. “Everyone loves our new look,” says Hatch-Rizzi.
Not everyone is sold on frozen raw foods, though. There is a perception that raw foods are unsafe, partly due to a pet food study by the U.S. Food and Drug Administration (FDA). From 2010 to 2012, the FDA Center for Veterinary Medicine (CVM) screened more than 1,000 samples of pet food for bacteria that can cause foodborne illnesses. Results showed the raw foods were more likely to be contaminated with disease-causing bacteria, including salmonella and listeria monocytogenes.
“Based on the study’s results, CVM is concerned about the public health risk of raw pet food diets,” the FDA posted on its website.
It doesn’t help that veterinary groups are following the FDA’s lead, says Matt Pirz, vice president of Primal Pet Foods in San Francisco. “Studies show roughly 75 percent of consumers look to their vets for advice on what to feed,” he says. “No matter how well we partner with retailers on product training and promotion to consumers, if three out of every four new consumers gets ‘unsold’ by a vet, it’s really hard to grow.”
Still, the category is growing, which creates a different challenge. “We believe the recent move by several brands to increase the online presence of their raw frozen products is very troubling,” Pirz says. “We see raw frozen products best sold locally by neighborhood retailers.”
Primal Pet Foods is available in more than 6,000 U.S. pet specialty locations, and the company decided to remove all frozen products from e-commerce. Consumers can find the products locally, a move that presents a strategic opportunity for brick-and-mortar retailers to compete with online sellers.
“We now focus most of our promotional energy to helping retailers attach more traditional feeders to some frozen products,” says Pirz. “Even if they won’t feed raw full time, a kibble feeder who supplements with Primal’s Raw Frozen Goat Milk or Raw Bones still has to come to your shop to purchase. Once they’re in the store, it’s no longer more convenient to purchase other food online.”
Treats are another growing segment in the broader raw nutrition category. For example, Stewart, a brand of MiracleCorp based in Dayton, Ohio, recently added Wild Salmon freeze-dried treats for dogs to its Pro-Treat lineup.
Pet owners often think of salmon as a flavor for cats, says Lori Fouts, vice president of sales management at MiracleCorp. “Salmon has evolved in the minds of consumers,” she says. “Salmon is something that is really great for dogs, and dogs like the palatability.”
Fouts notes that while seeking more healthful pet foods has long been a trend, it is being boosted by the Millennial generation. “The older generations want to take good care of their pets and they are making improvements in their animals’ diets, but the younger generation knows why they are making those changes,” she says. “They do research, they learn more about the nutrition, and they approach shopping a lot differently.”
Overall, Lange sees a bright future for the raw foods category. “Raw food is at about 1.3 percent of all sales, so it’s a small category,” she says, adding that it is possible for the category to reach five percent of the pet food market. “There is opportunity there.”