Despite the still-limping economy, the pet industry continues to march sure-footedly forward—apparently pet owners will spare little expense when it comes to the wellbeing of their pet companions. There are several reasons for the industry’s resilience, one of them being the oft-mentioned trend toward the humanization of pets. Pet owners are treating their animals as family members, and it is an attitude that has become solidly entrenched.
It seems natural, then, that as consumers increasingly seek out healthier and more natural food choices for themselves, this humanization is compelling them to search out the same for their pets. Today that demand is being met by the growing number of pet food manufacturers that supply plenty of healthy options that appeal to discerning pet owners. And retailers, also keen on meeting this demand, are making sure to devote ample shelf space to this category known for generating traffic and repeat sales.
Petropics Gourmet Whole Food, LLC, a Sequim, Wash.-based company that sells canned goods for dogs and cats under the brands Tiki Cat and Tiki Dog Gourmet Whole Food, is one those manufacturers focused on catering to health-conscious, discriminating pet owners. Christine Hackett, president of Petropics, says this shift in demand was precipitated by the pet-food recalls of 2007, which prompted consumers to pay greater attention to the products they were buying and ultimately changed buying patterns.
Prior to the recall, pet owners tended to stick with one brand. However, as consumers began scrutinizing these products more carefully and became more knowledgeable about healthier ways to feed their pets, this loyalty began to wane.
“After this recall, we’re finding a new trend emerging in which consumers are trying new foods, rotating foods and experimenting with different brands,” says Hackett. “[They are] attempting to detect the likeability and performance of a food through improvements in the skin, coat and energy levels of their pet.”
Consumers are also looking for long-term solutions and benefits. This is especially true if the pet is “health-challenged,” says Diane E. Peterson, chief sales and marketing officer for Cell Response Formulation, LLC. Located in Jackson Hole, Wyo., the company does business as Mulligan Stew Pet Food, selling a Premium Baked Kibble line and a Premium Canned line for dogs.
Food Options Abound
Unfortunately, many pets have health issues. Dogs, in particular, can suffer from various ailments brought about by food allergies, especially rashes and other skin issues.
According to Chanda Leary-Coutu, senior communications manager for WellPet, LLC, increased consumer awareness about food sensitivities is driving sales in the category. Tewksbury, Mass.-based WellPet offers a variety of natural recipes, including grain-free diets and those for pets with allergies.
Leary-Coutu says that many owners are finding their dogs don’t tolerate grains well. “Or, they’re opting to follow the nutritional philosophy that dogs, based on their primal ancestry, thrive on a diet comprised mainly of meat,” she says. “Retailers have responded to the consumer demand for more grain-free diets and are giving these foods more shelf space.”
Consumer demand, along with retailers’ willingness to expand their offerings, also seems to have inspired product development. For example, Hackett says, in 2005 the canned food category was broken down into four main categories: grocery brands, ultra premium, premium and low premium. The categories have mushroomed to include product designations like USDA-certified, human-grade/certified, human-grade/not certified, organic (all ingredients or partial), all-natural (including vitamins and minerals, or with added vitamins and minerals), whole meat, meal loaf, and so on. The variety is dizzying. In response, pet owners are becoming more informed.
“Many consumers spend serious time becoming educated in treatment options,” says Peterson. “Manufacturers are being held to a higher standard in their ingredient choices and manufacturing practices. Consumers are steering the nutritional train, expecting manufacturers to comply and deliver.”
Savvy retailers, meanwhile, are doing their part by staying current on the latest developments in the market.
“Retailers are great about spotting new trends in nutrition,” says Eric Emmenegger, senior brand manager of Instinct, for St. Louis-based Nature’s Variety. “They’re always looking for new and unique ways to deliver convenience while still providing top-of-the-line pet nutrition.”
Nature’s Variety makes the Instinct and Prairie brands of foods for dogs and cats, providing natural nutrition in all forms, including raw frozen diets—which Emmenegger describes as being one of the fastest-growing pet food segments.
If they’re going to be successful, retailers must stay “keenly aware” of industry and local trends, says Hackett. They must keep an eye on their competitors and get a handle on their own consumers’ needs, she adds. Retailers also want to cultivate a reputation for adding innovation to their shelves with items that meet a variety of budgets. But all of this is just a starting point.
Hackett says the key for retailers is to understand how to profile and categorize their brands on the shelves. By determining what is trending in their stores, retailers can exploit and build upon their top-performing categories, while identifying and moving out dead-weight products.
She adds that Petropics, which exclusively supplies independent retailers, has developed a buyer profile tool to help retailers manage these tasks. The company also offers a customer-loyalty program, and sampling and demo programs, as well as providing free custom gravity-racking systems.
The best way to successfully sell these products is to take advantage of all the promotional and educational tools the manufacturer has available, says Emmenegger. “For example, we will provide samples, shippers, window clings, aisle interrupters, and training to our retailers so they understand the benefits and can pass on the knowledge to the consumer,” he says.
Along with understanding the products on the shelf, knowing about nutrition in general is essential for retailers, says Tom Nieman, owner of Mequon, Wis.-based Fromm Family Foods, which manufactures premium dry and canned food for dogs and cats, as well as dog treats.
“This will reassure and inspire new customers,” he says. “As a brand, we see this day in and day out with our independent partners. It’s important to know the entire line and encourage customers to buy add-on products, like treats or toppers, delivering a complete nutritional experience.”
In addition to training, Fromm supplies retailers with a variety of marketing and merchandising support, including POS materials, frequent-buyer programs, coupons and demos. Neiman says they’ve found that retailers that utilize these tools and host in-store events and demonstrations experience sales increases because they’ve helped their customers get to know and trust the brands they carry.
Other Sales Boosting strategies include:
• Putting new products front and center. New products, especially those that are unique or different, do better when they’re prominently displayed, says Emmenegger.
• Spending time with customers, getting to know their pet’s nutritional, health, and lifestyle requirements. “Customers are looking for help and retailers can fill this educational and supportive need,” says Peterson. Mulligan Stew offers a variety of educational tools for retailers, including unlimited access to research and articles (via their website) and live webinars.
• Providing samples of new products. “Consumers that don’t experiment through their buying dollar will usually try something new when it’s offered for free,” says Hackett. “Stores that send home cans and bags of food samples tend to see a higher return sale.”
It’s critical that retailers take a big-picture view when it comes to their inventory, Hackett says. “Product selection must go beyond margins and percentage points and focus on the overall scope of customer demand and a blended margin,” she explains. “Never underestimate the power of niche products, power merchandising, and transitional consumer education to inspire customers’ interest and meet their needs of discovery.”
Catering to Canines
June 1, 2012
As consumers place increased emphasis on pet health and wellness, retailers are making more room on their shelves for dog foods that satisfy this growing trend.