*Special Global Pet Expo Coverage*
Just about everyone within the pet industry acknowledges the rapid growth of the natural products category, but few realize exactly how rapidly it continues to grow.
“According to Packaged Facts, U.S. retail sales of natural, organic and eco-friendly pet products topped $4 billion dollars in 2012,” says Rob Cadenhead, vice president of sales and marketing at Performance Pet Products, makers of the Spring Naturals brand (booth 3825). “That number is projected to more than double in the next five years. That’s an excellent reason for retailers to spend more of their time recommending natural brands.”
He adds that creating a natural section at Global Pet Expo is a concept whose time has come. The section is located at the back of the show floor to encourage attendees to meander through other aisles before visiting this popular section—but the plan is not foolproof.
“A lot of the retailers I’ve spoken with pretty much beeline it straight to the natural section and then work their way around the rest of the show,” says James Crouch, president of Bixbi Pet (booth 3816), which will debut its functional jerky line at the show.
The section’s current popularity is a testament to how the natural category has grown in recent years. “Seven years ago, a store might have had a tiny area dedicated to a couple of natural products, tucked in the back, just in case that super healthy customer were to walk through the door,” says Maggie Johnson, co-owner and vice president of human resources and marketing at Sojos (booth 4213).
These days, however, there are entire pet stores dedicated to carrying natural-only products. “The category contains the highest profit margin, and at the independent retail level, it’s becoming the more strategic business model to use,” she adds.
Both Sojos and Spring Naturals will showcase new natural cat food products this year. Spring Naturals will launch a full line of grain-free dry and canned cat dinners. Sojos will add a new size for its Sojos Complete Cat Food—a one-pound bag perfect as a trial size for retailers hoping to convert customers to a high-quality diet.
But the natural category isn’t limited to just food—it has infiltrated every product category within the pet industry, from chews and treats to candles.
A Watered Down Word
Of course, with all that success comes challenges. “Unfortunately, today many manufacturers are claiming that their products are ‘natural’ when they do not meet the litmus test,” says John J. Phillips, Jr., president and CEO of Wholistic Pet Organics (booth 3907), which will debut a line of functional natural treats at the show. “Although the natural products market is growing, the consumer is becoming more skeptical about natural product claims.”
Jennifer Melton, co-founder of Cloud Star (booth 3901), agrees. “Over the years, the term [natural] has become extremely overused and watered down.”
Cloud Star has been manufacturing all-natural pet products since 1999—but back then, many buyers didn’t understand the importance of these goods. “That attitude has clearly changed,” says Melton. “Customers now want natural options for their pets, just as they want something healthy for themselves.”
And pet owners who aren’t in the know will be soon enough. “There is definitively a global awakening going on, in part, thanks to the Internet where information is not only at your fingertips, but abundant and abundantly shared through the social-networking community,” says Jennifer DiGrazia, CEO of PawFlex (booth 3711), maker of PawFlex Bandages, which are made from environmentally friendly materials to help pets heal in the least evasive way possible.
But just because demand is up, that doesn’t mean natural products are always an easy sell. The relatively high cost of the ingredients needed to make natural products means natural goods are often more expensive than their counterparts. “The problem that we have found, and I think a lot of other manufacturers have found, is that commodity prices have risen quite a bit, and as a result, it’s hard for us to keep a cap on the process,” says Larry Wright, president of The Green Pet Shop (booth 3809).
Unfortnately, natural products’ higher prices at retail are out of reach for many pet owners. “When you correlate price with quality of product, quality doesn’t always win when the price is out of sync with what the major consumer can afford,” says Crouch, adding that pricing is probably the biggest challenge facing the category today.
Customers need to understand the reasons behind the higher pricing, and the best explanation is that consumers are getting a better value when they spend more upfront and buy a better quality product. “People [need to] realize that the better the food that they feed to their dogs and cats, the fewer vet bills they’ll have,” says Crouch. “When you start making that connection it makes sense to spend a few extra bucks a month on good food and good treats.”
That is why the opportunity The Natural Pet section offers to retail buyers is unique. Taking a close look at the various products on display and asking exhibitors lots of questions is the best way to figure out what items a store can truly feel good about endorsing. It’s also one of the best ways for retailers to become educated themselves.
The Natural Pet gives retailers a chance to compare brands and products that may seem similar. “By exhibiting in the natural section, we’re actively inviting Global attendees to compare our Spring Naturals food and treat line against the leading natural brands,” says Cadenhead.
Another argument that retailers can make for natural products is safety. In many ways, the customer demand for higher standard of safety has been a contributing factor to the growth of the “made in the USA” trend that’s become quite popular within the industry. “[In other countries] you don’t have 10 different agencies breathing down your neck to make sure your products are safe like they do in the U.S.,” says Crouch. “However [extra regulation] does cause a price mismatch in how much it costs to bring products to market. So the challenge for manufacturers is to deal with all of that while presenting the consumer with a product that’s better and is affordable—which is extremely difficult.”
Wright says it’s that very issue that has prevented his company from manufacturing its products in America. He tells the story of one customer who called to ask him why he didn’t produce his Cool Pet Pad in the U.S. She was purchasing an extra-large pad for $79.99. “I said, ‘Would you pay $150 for that pad?’ and she said, ‘Probably not.’”
Yet regardless of where products are manufactured—recent pet food recalls of brands that manufacture in the U.S. reveal that even regulation and careful manufacturing processes can’t always prevent contamination—safety often makes a strong argument. After all, pet owners love their pets and want what’s best for them—they just don’t want to pay any more than necessary. “Consumers are looking for a balance between quality and economics,” says Johnson. “They want the very best, but they don’t want to feel like they are over-spending.”
“The biggest challenge right now is mind set,” she says. “Stores need to shift their approach and sales technique and realize how simple it is to convert pet-loving customers to natural products users.”