The dog treat category represents a unique sales opportunity for pet specialty retailers. With an unmatched ability to speak simultaneously to pet owners’ desire to both spoil their pets and provide them with wholesome, healthy nutrition—all while delivering relatively high margins to retailers—dog treats may be the ultimate profit center in pet stores. However, success in this product category is far from a layup. An increasingly crowded marketplace and evolving shopper preferences are making it more difficult than ever for retailers to successfully chart a course for making the most out of their treat selection.
For pet stores that rise to meet the challenge presented by dynamics in the treat category, the payoff can be great. Not only is this product segment highly profitable if handled correctly, it continues to grow at a good rate. According to global market research firm GfK, which tracks POS data for pet food and treat sales in the pet specialty channel, dog treat sales grew by almost nine percent in 2013, reaching $690 million between January and November.
To understand what is driving this growth, it is important to go back to those shifting pet owner preferences, and the resulting influx of new product options. “Based on the numbers we are seeing, natural and grain-free products are clearly driving growth in the treat category,” says Maria Lange, senior product manager for GfK, noting that the growth of natural and grain-free treats has far outpaced the category overall. In fact, last year, sales of grain-free and natural treats grew by more than 67 percent and 34 percent, respectively.
Apparently, this is a trend that has not been lost on manufacturers. The market has been flooded with new natural and grain-free treat products over the past few years, and there does not seem to be any sign of a slow down. While it is great that vendors are stepping up to meet the demands of pet owners, it begs the question: with so many products to choose from, how can retailers be sure that they are building the best possible selection for their stores?
According to many industry experts, the key is in partnering with vendors that source and produce their products domestically. “USA jerkies and USA chicken products seem to be the most popular [treats] recently,” says Suzy Madenis, who handles marketing for Rockford, Ill.-based Jones Natural Chews Co.
The trend toward USA-made and -sourced treat products has been catapulted to the forefront in recent months, as reports of adverse reactions among dogs to China-sourced chicken jerky products have been blared across the media. Such reports even led the Food and Drug Administration (FDA) to solicit pet owners for more information about the possible effects of Chinese chicken jerky late last year.
However, some industry insiders are quick to note that exhaustive FDA investigations have revealed no apparent problems with the Chinese jerky products in question. What’s more, they say, there are no guarantees that products completely sourced in the U.S. are safer. “People who believe that ‘made in America’ products are inherently safe have blinders on,” says Rick Geller, president and CEO of New York-based Vital Source Group, makers of Pack ‘N Pride dog treats.
“There have been many recalls of U.S.-sourced treats,” he adds, pointing to a recent recall and USDA-driven plant shutdown for domestic chicken supplier Foster Farms.
Instead of relying on a “Made in the USA” claim, Geller suggests that retailers should focus on working with vendors that offer a high level of transparency in how they source, produce and test the safety of their products. “Not all of the companies jumping on the ‘Made in the USA’ bandwagon are producing their products,” he says. “That really undermines the whole point.”
Whatever their stance on domestic versus foreign ingredient sourcing, most treat suppliers agree with Geller that transparency among vendors should be a big consideration in a retailer’s decision on what products to carry. “Retailers should look for manufacturers that maintain a high level of control over their ingredient sourcing and production,” says Louis Angerame, director of Westport, Conn.-based Old Mill Pet Products, which will be launching its first product line in the dog treat category called Nature’s Bits, at Global Pet Expo in March. Angerame, like Geller, also espouses rigorous product testing—something both Pack ‘N Pride and Old Mill Pet Products practice.
Another important factor in evaluating which treats a retailer should carry is product packaging. In addition to being an extension of the supplier transparency—primarily through the ingredients panel—good treat packaging should be both eye-catching and informative. “Packaging helps convey the product messaging including purpose, functionality and benefits,” says Chris Meiering, marketing director for Durango, Colo.-based Zuke’s Treats. “Zuke’s packaging uses simple icons on the front to show features and benefits at a glance. On the back of each package, each benefit is explained in more detail so the customer can make an educated choice.”
Meiering also notes that packaging can play a vital role in creating a cohesive, easy-to-shop treat department, particularly if a retailer focuses its product selection on a limited number of brands. “We believe ‘me too’ products only divide the same dollars spent over more SKUs,” he says. “They also confuse the shopper and dilute the effectiveness of brand blocks. Brand blocks help merchandise the treat aisle and make it easier for the shopper to find products. Zuke’s treat packaging is specifically designed to create beautiful, easy-to-understand brand blocks.”
While partnering with the right vendors and stocking an effective product mix are essential, it may all be for naught if a pet store does not have the right merchandising strategy for its treat selection. The first step in crafting a successful strategy, says Gary Hingst, executive vice president of Salix Animal Health in Deerfield Beach, Fla., is understanding the role that treats play for pet stores, as well as how pet owners typically shop these products.
“First, we must recognize that treats are impulse purchases and are quite rewarding for the retailer in terms of profit and the fact that they are key in helping consumers recognize the store as being a destination of choice for their pet needs,” Hingst says. “Treats and other highly impulsive items should be merchandised at the end of the aisle adjacent to the heavily trafficked main aisle. By merchandising these key impulse items at the end of an aisle, we create an awareness with the pet parent that the store has a great selection of pet food and accessories, which leads to additional sales for the entire aisle.”
What’s on the Market: Dog Treats & Chews
Krijon’s (krijon.com) products include a wide variety of all-natural dog treats that have not been chemically treated. The company recently expanded its antler line to include: deer, elk and moose. Antlers are naturally shed, rich in minerals, easily digestible and do not splinter. Krijon offers direct pricing, no minimum orders and next-day shipping, and it only uses USA sheds. The company also offers an extensive line of bully sticks that come from free-ranging South American cattle.
Stella & Chewy’s (stellaandchewys.com) added two new recipes to its family of Carnivore Crunch freeze-dried treats—Turkey and Salmon & Cod. Each of the Crunch varieties is made with 99-percent meat, organs and ground bone, have no added hormones. They are free of antibiotics, grains and gluten. Only grass-fed beef, cage-free poultry and wild-caught fish are used in each product formula. The size of the nuggets is ideal for all breeds of dogs, and each has less than three calories per nugget.
DogStars, from Savvy Beast Treats (savvybeasttreats.com), are 100-percent organic and made from real meat, with no wheat or gluten. They are formulated with super-nutritious chia flour, which is packed with protein, omega-3 fatty acids and antioxidants, as well as coconut oil, which is rich in fiber, magnesium, zinc and vitamin B-6. These hand-made treats are currently available in chicken, turkey, beef and lamb varieties, but the company plans to add a variety of wild game meats later this year.
It’s Purely Natural Dog Treats, from Loving Pets (lovingpetsproducts.com) offer pet owners the opportunity to spoil their pooches with a healthy snack that’s easy on the pocketbook. These boutique-quality treats use only all-natural and locally sourced produce, such as peas, carrots, cranberries and sweet potatoes, mixed with USA farm-raised chicken and beef. The It’s Purely Natural line is free of glycerin, gluten, preservatives and by-products. Eight flavor combinations are slow cooked to lock in and deliver an irresistible taste.
Lincoln Bark (lincolnbark.com) has introduced the newest addition to its line of chia-powered dog treats: Nibbles. These freeze-dried “raw” dog treats are highly palatable and nutritious snacks containing no grain, artificial preservatives, gluten or added hormones. Made and sourced in the USA, these limited-ingredient treats come in three flavors: Green Beef Tripe, Duck and Wild Alaskan Salmon. Each variety is made with chia seeds, which are loaded with protein, fiber, omega-3 fatty acids, amino acids, antioxidants and plant-based phytonutrients that keep the body functioning properly.
Salix Animal Health (salix-llc.com) has launched Digest-eeze, the first beefhide chews treated with the company’s innovative 100-percent natural formula that is easier for dogs to digest. Like the company’s Good ‘n’ fun line of rawhide chews, Digest-eeze products are clinically proven to be 99-percent digestible and dissolve 60-percent faster than other rawhide chews.
Dynamo Dog Functional Dental Bones, the newest treat line from Cloud Star (cloudstar.com), feature a textured surface to help remove plaque and tartar buildup, and promote healthy gums. They are loaded with fruits, vegetables, herbs and vitamins, while still being free of grain, gluten, corn, soy, potato, rice, gelatin, glycerin and any artificial flavors, colors or preservatives. Dynamo Dog Functional Dental Bones comes in three formulas: Breath, Hip & Joint and Tummy. They are available in two sizes: original size for dogs 50 to 80 lbs., and small for dogs 20 to 50 lbs.
All-meat treats from Pack ‘n Pride (pack-n-pride.com) are made from 100-percent all-natural ingredients, like antibiotic-free chicken, duck and pork, which is delivered fresh daily to the company’s American-owned and -managed production facilities. Pack ‘n Pride’s patent-pending cooking process allows for nutrient retention and optimal digestibility, and all of its meat treats are tested in the USA at FDA-approved labs. Varieties include Chick Chick Hooray!, Pork Please! and Get Ducky! All three flavors are available in both nugget and fillet form, in small and large jars, as well as in poly bags.
Jones Natural Chews (jonesnaturalchews.com) has expanded its lineup of USA-sourced and made natural dog treats and chews. The Fun Pack includes four scrumptious beef center bones, with meaty bits and marrow left in the middle. Wuv You Treats combine Big Paw Jerky and Taffy Soft Chicken Blend in a fun, reusable canister. The Bow Wow Boo Bucket is a Halloween bucket filled with a variety of chews. Canine Christmas Crunchers combine a variety of chews in a festive holiday stocking. Christmas Woofermen Treats look just like a gingerbread man, made from oven-baked ground beef.
NUTRISCA Raw Freeze Dried Solos, the latest treat offering from DOGSWELL (nutrisca.com), are single ingredient, 100-percent natural treats that are ultra-rich in protein and freeze dried for maximum nutrient retention. Low in calories, Solos are the perfect size for use in training. They are available in chicken and beef liver flavors, both in 1.5-oz. stand-up pouches that can easily be merchandised on the shelf or pegged.
Old Mill Pet Products (naturesbits.com) will enter the dog treat category with the introduction of its Nature’s Bits line at next month’s Global Pet Expo. The line comprises a variety of natural, oven-baked soft and crunchy treats in six flavors, including chicken, bison, duck, salmon, beef and peanut butter. Both the soft and crunchy treats come in 6-oz. stand-up pouches that can easily be merchandised on the shelf or pegged.
Zuke’s (zukes.com) Skinny Bakes are guilt-free 10-calorie dog biscuits that pack big taste. Recipes include: Peanut Butter ‘N Banana Crunch, Cherry ‘N Berry Crunch, and Pumpkin ‘N Sweet Potato Crunch. The company has also added two flavors to its Mini Naturals line—Duck and Pork. At less than 3.5 calories each, Mini Naturals are perfect for use as frequent rewards.