The natural and organic pet set is growing by leaps and bounds as pet owners focus on what their pets eat and practice preventative care.
By Deena M. Amato-McCoy
There is no question that pet owners regard their pets as treasured members of their families. Thus, pet owners are pulling out all the stops to ensure their furry friends stay happy and healthy. With more shoppers increasingly opting for organic products to sustain their pets’ healthy lifestyles, the natural merchandise is slowly becoming a viable contender within the pet care category.
Overall, natural and organic merchandise is making a name for itself across the retail industry. Total U.S. organic consumer product sales grew 5.3% to reach $26.6 billion in 2009, according to the 2010 Organic Industry Survey, released by The Organic Trade Association, which is based in Greenfield, Mass. and will be relocating to Brattleboro, Vt. this fall.
Clearly, turns are still not as strong as mainstream merchandise, but sales growth among certain organic segments continue to outpace total sales of comparable conventional pet food and nonfood items by a significant margin, according to the study.
Toying with sales
Pet merchandise is one of the breakout segments of the category. Natural pet merchandise still accounts for a small percentage of overall sales, but the good news is the category’s sales continue to grow by leaps and bounds.
“Years ago, the idea of organics for pets was strictly a pet specialty item,” says Leslie Yellin, director of business development for Moonachie, N.J.-based Multipet International. “Then in the mid-1980s, a niche market started to evolve.”
Today, that one-time niche market has exploded into viable category. Thanks to a few evolving trends that continue to fuel consumer interest, more retailers are jumping at the opportunity to grab their share of these sales.
One trend that is pushing the pendulum toward more organic merchandise is consumers’ interest in what their pets ingest. It is no secret that consumers are more educated about what they are putting into their own bodies and this trend spills over into the pet aisle.
“There is a stronger awareness of the preservatives and ingredients they want to avoid in their own diets,” says Caryn Stichler, vice president of marketing, Sergeant’s Pet Care Products, based in Omaha, Neb. “Now they are willing to do the same for their pets.”
Eager to stave off problems such as weight gain, itching and digestive problems, consumers are switching pets to more nutritional diets. At the core of these plans are organic foods. “Organic pet food is an option that makes sense health-wise,” says Barbara Denzer, vice president of Azusa, Calif.-based Cardinal Pet Care.
Another trend impacting a rise in organic pet food is the growing interest in preventive care, especially as the economy continues to take a toll on discretionary income.
“The rising cost of medical care for pets has made pet parents realize that although it may cost a little more, organic merchandise, in the long run, could save them trips to the vet,” she says.
The 2007 massive recall of milk powder-based merchandise tainted with melamine sourced from China. This incident, which experts launched a new awareness—and demand—for more natural ingredients.
“I went from receiving 10 concerned consumer emails to 200 emails daily,” explains Dr. Phil Brown, DVM, corporate veterinarian for Newman’s Own Organics, Aptos, Calif. “And the trend continues. Consumers continue to hear about salmonella scares affecting eggs, or E.coli in lettuce, and they instantly realize that their pets can be affected as well.”
Realizing the potential results of contaminated foods are frightening, even life threatening, consumers didn’t take the threats lying down. Instead, they reached out to the few smaller niche players with a foothold inthe industry.
“As consumer demand increased, sales among these smaller brands started to sky rocket,” says Sergeant’s Stichler. “It didn’t take long for most of the major pet food providers to jump in and develop line extensions that met the demands of the consumer.”
This demand actually keeps pet food and treats on top the organics merchandise sales charts, especially items from manufacturers that openly disclose the natural ingredients used in their foods—ingredients that are often described as being healthy, as well as promoting, longevity and wellness.
According to industry observers, sales of natural pet foods jump by 25% over the last five years. The same can be said for suppliers. In 1989, the market had two or three well-known natural pet food brands. Today, that market has expanded to approximately 50 options available from 22 different manufacturers, according to Business Trend Analysts’ Petfood Industry report.
Organic pet food sales hit $1.7 billion in 2009, and they are expected to reach $2.6 billion by 2014, according to industry estimates.
In terms of nonfood products, the hot organic items in the pet aisle include shampoos, collars, stain and odor removers and toys. Sergeant’s is one company responding to this demand.
“Some pets are sensitive to chemicals,” according to Stichler, so Sergeant’s has created alternatives. Since flea and tick control is a common area of concern for pet parents, Sergeant’s is addressing the issue with its Green Flea and Tick line. Like conventional products, the line kills insects on contact, but a botanical-based formula makes it safe for pets and children, and also has minimal environmental impact.
The manufacturer’s Green Squeeze-Ons—available in separate formulas for dogs and cats—, are liquid treatments that fight ticks using active ingredients such as peppermint oil, lemon grass oil and clove oil.
The manufacturer also features its Green Flea and Tick Spray for dogs and cats. Using active ingredients found in peppermint oil, cinnamon oil, lemon grass oil, eugenol and thyme oil, the product is designed to kill fleas, ticks and mosquitoes. The product, also safe around children and pets, outperformed pyrethrum spray during comparison tests.
Sergeant’s also formulated its Green Shampoo for dogs. Using Natural Active Ingredients including cinnamon oil, cedar oil, rosemary oil and lemongrass, the shampoo is designed to kill fleas on contact.
Sergeant’s is also using natural ingredients to address pets’ behavioral issues. The company’s Vetscriptions Settle Down Pheromone Collar was created to reduce stress and anxiety levels often caused by everyday issues, including encountering new people and animals, separation anxiety, noise from thunder and fireworks, and trips to the vet or boarding facilities.
The collars release pheromones, a substance mother dogs and cats produce to calm their young, over a 30-day period.
Not every natural pet category is a winner straight out of the gate, however.
Bedding and apparel made out of organic and natural materials for example, are not seeing the traction they would like. Even items that are gaining traction have to be handled with care at the retail level, if they want to enjoy similar successes.
Multipet’s new Hemp cat toys are seeing “fantastic results,” according to Yellin, but success clearly rides on price sensitivity.
“Consumers do not want to spend a lot of money on toys,” she explains. “They like the idea of natural merchandise, but they also want to invest in items that they know their pet will most benefit from.”
Price is one factor hindering the growth of organics, according to industry observers. It is not uncommon for organic merchandise to run approximately 20% to 25% higher than what consumers are willing to spend on conventional merchandise, Cardinal’s Denzer says.
This trend pushed Mulitpet to create a new line of affordable products made with natural and organic materials. Mindful of price elasticity and specific price points, “the toys will be launched within the comfort zone of spending,” Yellin says.
Besides featuring lower price points, retailers and manufacturers need to stay abreast of their demographics. “In lower-income areas for example, it may be difficult to convince customers to spend more on organic pet merchandise,” Cardinal’s Denzer says.
“Knowing your shoppers and their needs is key, such as are there more cat owners versus dog parents. Once that information is available, chains must work to get the proper mix of products and price points in place.”
The next step is educating your consumers—an area where all retail segments are lacking. Signage, knowledgably sales staff, in-store samples and promotions can all help to spur interest in organic pet products.