Annual sales of pet supplements and nutraceutical treats are expected to show modest growth through 2015, according to market research publisher Packaged Facts. The overall U.S. pet industry has fared well during the recession relative to many other consumer packaged goods industries, as noted in the company’s Pet Supplements and Nutraceutical Treats in the U.S., 3rd Edition, with an estimated total U.S. retail sales of pet supplements and nutraceutical treats at more than $1 billion in 2010. The annual percentage increases of pet supplements and nutraceutical treats is expected to rise from more than two percent this year to almost seven percent in 2015, lifting sales to an estimated $2 billion.
The market for supplements and nutritional remedies wasn’t always this strong. Not too many years ago, consumers—and retailers—viewed pet supplements somewhat more skeptically than they do today. Retailers were hesitant to take on this unfamiliar category, says Susan Weiss, owner of Ark Naturals.
“Supplements were not welcome; the ingredients were not familiar to retailers,” she says. “It took some time to get retailers to a comfort level. That’s really changed in the last few years. Now it’s part of the landscape.”
The evolution of supplements on the human market have helped changed the way retailers and consumers view supplements for pets. Marketing and advertising for yogurt, using celebrity spokespeople, had a big hand in helping consumers understand the role probiotics play in nutrition through advertising for yogurt, for example, while omega-3 fatty acids have become commonplace in discussions of heart health. “Marketing unrelated to the pet industry has helped,” Weiss says.
Despite all that, sales in the supplements category in most stores can be particularly vulnerable if retailers aren’t careful. In-store positioning of products can have a huge impact on the success of the product category. Understanding the importance of being educated about products, their ingredients and the reasons customers buy nutritional supplements and remedies should be a core business strategy for retailers.
“So many times we see the supplement section as more of an afterthought in the back corner of a store,” says Megan Dischler, international sales manager with Herbsmith Inc. “Merchandising is very important. Merchandising in proximity to educational and literature resources is key. It really helps to work with manufactures and distributors that offer great education and supporting material directly to the consumer. It makes the retailer’s job easier.”
As important as education is, however, it won’t ring up sales by itself, says Weiss. Positioning in the store is the first thing store operators must address.
“Many retailers are slow to reset their shelves,” she says. “The pet industry needs to take a lesson from the grocery store industry.”
Refreshing the look of a store’s shelves and how products are positioned helps the consumer focus. Most stores organize products by function, Weiss says. But retailers may want to consider organizing products by brand instead. The human brain is better able to organize when a shopper is able to view products as part of a group.
“You have to create mental harmony for the consumer,” she says. “A disjointed look interrupts the mental process.”
And dog owners do pay attention. Pet owners looking for dietary supplements have already demonstrated a commitment to the health of an important family member. They also learn a great deal just by reading at product labels while in pet stores.
The information available to consumers, however, isn’t always reliable. “There are a lot of products out there that through packaging and marketing appear to be of the highest quality,” says Dischler. “Unfortunately, many of these products are not of the quality that they appear. It sometimes requires a lot of research on the retailer’s part to make sure they are providing the best products to their customers.”
The good news is that the industry is stepping up efforts to take out some of the guesswork and mystery involved in evaluation these products. The National Animal Supplement Council, non-profit trade organization founded in 2001, has challenged manufacturers to voluntarily conform to labeling guidelines it has established and adopt new standards for manufacturing. NASC also tests products to check the accuracy of ingredient lists and claims, and the organization requires its members report adverse events with supplements. Manufacturers that are in compliance with NASC guidelines are afforded the privilege of bearing the NASC Seal of Quality, which helps the manufacturer establish credibility with retailers looking for trustworthy vendor partners in this category.
Still, with all the choices on the market, customers are left with lots of decisions to make when standing in the supplements aisle. Retailers can assist customers—and their bottom lines—by creating an atmosphere in which they are compelled to take the time to educate themselves and weigh their options. “It’s hard to quantify, but when you’re in an environment you like, you slow down, and that creates a better chance for the retailer to sell more,” says Weiss, pointing a business model used by retailers such as natural and organic foods retailer, Whole Foods.
She suggests creating small sitting areas that are warm and inviting. Dischler advises store operators to position supplement products in close proximity with educational literature.
Retailers can also steer customers toward other sources of information. For example, many companies, such as Herbsmith, offer informative webinars that are readily available online.
Both Weiss and Dischler warn of the risks that come with products made by companies that compete on price. Ingredients vary by quality, and companies that cut corners are more likely to compromise on quality to lower their prices. They also agree that pet owners should consider the longevity of a company. If a company has been around for many years, then it is reasonable to assume it is doing something right and has more to lose by risking quality.
Finally, retailers can offer this very simple advice to those pet owners who are still on the fence about pet supplements: there is no placebo effect on animals. “You can trick a human, but you can’t trick an animal,” says Weiss.
If a customer doesn’t see a change in his dog’s health after taking a supplement to treat a specific condition, then it means either that the owner misdiagnosed the condition, bought the wrong treatment or that the supplement doesn’t work.
“Investment in proactive health and wellness for pets often times leads to less expensive unplanned veterinary bills and problems later on,” says Dischler, adding that pet owners are seeking alternatives for their pets’ health and asking lots of questions. “I think it’s wonderful.”
That’s good news, adds Weiss. “It’s cheaper to stay healthy than it is to be sick.”
Dan Headrick is a freelance writer who lives and works in Raleigh, N.C. Dan and his wife Pam Guthrie opened Wag Pet Boutique in 2003. The store received numerous community and industry awards.
Supplements and Demand
November 1, 2011
Demand is high for remedies and supplements for dogs, but retailers still need to do their homework to make the category work for them.