Pet foods and treats that offer nutritional value continue to be favorites among consumers.
By Craig Levitt
There is an old wives’ tale that goes something like this: Over time pets and their owners start to look alike. While that seems highly unlikely, there is no question that the eating habits of four-legged family members are starting to resemble those of their owners.
Obesity and other health concerns have Americans eating better. That health trend has found its way into the pet food aisle. From natural heart-healthy dog food to weight-control cat food, America’s pets are eating better than ever.
Industry observers say the focus on health has allowed the pet food and treats category to sustain growth despite the difficult economic times. According to the Pet Food August 2011 report from Chicago-based research firm Mintel, new product launches returned to historical levels last year after spiking in 2008 and 2009. Leading the way were better-for-pet snacks and treats, as new products continually promise an increasingly wide array of health and wellness benefits.
“From a worldwide perspective, people see North America as a large culture, quite simply, we are culture where people are overweight,” says Terry Hannaford, CEO of Omega Paw. “Our pets are no different. Right now there is a very significant trend of people correcting their eating habits. That is translating directly to pet food sales as well.”
For example, gluten-free products—popular with people for a few years now—are gaining traction in the pet aisle. Another hot item people are gravitating toward for human consumption, particularly on the coasts, is quinoa. Now some pet food and treat suppliers are incorporating the so-called superfood into their product lines.
Hannaford says St. Marys, Ontario, Canada-based Omega Paw has had success with its Fitness First and Health Bone brands, both of which contain quinoa. Originally available in only bones and biscuits, Hannaford says the quinoa-based products have been so successful that they are being expanded to include tasty training treats. As quinoa makes its way into pet food, consumers can expect other foods that are good for humans to make their way into pet products as well.
The savvy retailer may think keeping an eye on human foods trends will give them a leg up on the next hot pet food or treat. Observers say that while tracking what people are eating is a good idea, the transition of these foods to pet may not happen so quickly.
“There is still a struggle when introducing new items,” says Hannaford. “Pet products still have to be regulated and the regulations don’t always fall as fast for pets as the do for people. So sometimes there is a natural delay until new ingredients get approved and we can use them. Once things get approved for human consumption it tends to get on the radar to get approved for canines as well.”
Hannaford says that Omega Paw’s goal is to be on the cutting edge, and it always on the lookout for new ingredients. However, introducing new ingredients can be tricky. Like people, no matter how healthy foods or treats are for pets, if it doesn’t taste good, it is very likely the animal will not eat it. Therefore striking a balance between healthy and palatability can be difficult.
Health, taste or both?
He adds that the consumer base is also divided. Some pet owners are only interested in buying the best tasting products possible. Others are looking for healthy products and taste is secondary. Still a third segment is looking for a combination.
“We want to get all of those consumers,” says Hannaford. “So the challenge we have—the challenge the industry has—is making products that are as tasty as possible but also healthy.”
Observers say part of the reason for the focus on providing pets with healthier foods is that some of the same health concerns that humans have—such as obesity, high blood pressure and heart disease—carry over to pets. As pets continue to be a big part of American families, owners are always looking to do what is best for them.
That includes providing foods that can improve and prolong their lives, such as the recently enhanced Purina Chow line of products from Nestlé Purina PetCare. “After adding a flash on the bag of Purina’s Dog Chow products that basically reads ‘if you feed your pet Dog Chow and Chow products, you can enhance its lifespan by up to two years’ sales of Dog Chow products increased significantly,” says Paul Cooke vice president of trade and industry development for the St. Louis-based company.
As a company, Cooke says Purina is always looking for ways to add to its portfolio and service its customers better. As such, many new Purina products have focused on quality of life improvements. “Whether that is products that benefit skin and coat, dental, weight management or senior formulas, we are really focused on improving pets quality of life,” he adds.
It appears as if consumers have bought into the idea as well. As proof, Cooke points to the success of Purina’s Beneful brand. Introduced about 10 years ago, Beneful is a product line that was invented to focus on health and wellness. “Just look at the bag itself,” says Cooke. “It has veggies and meat as the primary message.” According to Cooke, Beneful is poised to become a billion dollar brand this year.
While it is logical for food to be healthy, treats are often thought of as an indulgence. However, more and more manufacturers are offering healthy, tasty treats for pets. Last year Purina purchased a company called Waggin’ Train, maker of high-protein treats. “There is an overall wellness attitude, whether it is feeding healthier, indulging healthier, that is following human eating patterns,” says Cooke.
Meeting nutritional needs
To provide the nutrition that dogs’ need, Procter & Gamble has worked closely with nutritionists on its Iams brand to develop recipes that meet the need of owners looking for food with high-quality ingredients. New to the Iams brand is Iams Sensitive Naturals and Iams Simple & Natural. Like the other existing formulas in the Iams line, the new recipes do not contain fillers, artificial preservatives, artificial colors or flavors.
“Across the pet food category we are continuing to see a movement toward natural or holistic diets,” says Jason Taylor, external relations manager for Cincinnati-based Procter & Gamble Pet Care. “To continue to meet the needs of our consumers, we expanded our natural line with these two new recipes and we plan to continue expanding.”
As pet owners become increasingly aware of the benefits holistic treats offer, the category continues to grow. Though a growing category, there is still plenty for consumers, as well as retailers, to learn. “Typically holistic treats boast pure vitamin- and mineral-rich ingredients packed with health benefits, and the absence of chemicals, additives and fillers,” says Eric Abbey, president of Loving Pets Corp., based in Cranbury, N.J.
Other benefits, says Abbey, include a higher-quality list of natural ingredients than mainstream treats touted as “natural.” Holistic treats can be also be an important partner in preventative healthcare for dogs that may suffer from food allergies or challenges with mobility.
Abbey says that Loving Pets is on the forefront of the holistic treat movement, emphasizing that good-for-pet doesn’t have to mean expensive. “We use premium all-natural ingredients in our treats, at price-points that are still affordable,” he says. “Our newest, delicious, low-calorie Barksters answer the call for consumers reading ingredient labels and fine print.”
A retailer knowing the value of holistic treats is important, as is a retailer better understanding what consumers are looking for in a holistic treat—and how to market it. To drive consumer awareness, Loving Pets officials suggest that retailers employ a tried-and-true method that many human food companies follow—sampling.
“Sampling is extremely important because in most cases, the retailer is asking the consumer to try a unique treat different from what they are accustomed,” says Abbey. “Pet owners want a treat their dogs love and a treat with beneficial ingredients. Through sampling, consumers watch first-hand how happy high-quality treats make their four-legged friends and the pet parent has confidence in the health benefits the ingredients provide.”
While consumers are looking to save throughout the entire store, sales of pet food and treats, remains a bastion of salvation for retailers.
Industry observers say for the past decade pet food and treat sales have enjoyed year–over-year growth of between 7% and 8% a year. Though that has certainly slowed, most say pet food and treat sales are still up about 2%. While the current economic condition is certainly a factor, observers say it is not the only factor inhibiting sales.
“The recessionary issues that have affected a lot of other categories over the past two or three years have caught up to the pet category,” says Paul Cooke, vice president of trade and industry development for St. Louis-based Nestlé Purina PetCare. “But there may also be other issues at play. Pet ownership may be an issue. As an aging population continues we think pet ownership isn’t quite as strong as it has been over the past decade. There is a trend toward smaller dogs—the Paris Hilton factor. When we look at the category softening, there are probably a dozen factors impacting it, there is no one significant factor.”
According to Jason Taylor, external relations manager for Cincinnati-based Procter & Gamble Pet Care, more and more, consumers are looking for value. “Because consumers are watching their pocketbooks, we are seeing a consistent demand for quality pet food at a reasonable price-point,” he says.
Despite consumers’ desire to save money, observers say unlike other categories, the pet food and treats categories have not been greatly affected by private label.
“[These categories have] strong national brands and products that represent what consumers are looking-what they trust and respect,” says Cooke.