Reigning cats and dogs

With consumers treating their pets like royalty, supermarkets have the opportunity to increase sales of pet foods and treats.

A man’s home may be his castle, but Fido and Fluffy are the real king and queen. That is why their loyal subjects—also known as pet parents—search the supermarket shelves for the latest foods and treats to satisfy the real masters of the household.

As a result, industry officials say many supermarkets are re-examining how they market pet food by stocking more natural and organic foods, wellness products and high-margin impulse-buy treats. Astute grocers are also seeking out niche items from small manufacturers as a way to differentiate themselves.

“Food retailers are in a position to ‘capture’ or ‘close’ the pet shopper today,” says Jason Taylor, P&G Pet Care external relations manager for the Cincinnati-based company’s Iams division, based in Mason, Ohio. “Food retailers that encourage the pet shopper to go down the pet aisle and then meet their needs of quality, convenience and value can win with pet. Driving premium pet foods will be the key to food retailers, reducing ‘leakage’ to other channels.”

“As pets are being viewed more as members of the family, food and treats often play a role beyond nutrition—an expression of caring, a way to bond,” says Tierney Monaco, marketing director, Mars Petcare US, the Franklin, Tenn.-based manufacturer of Pedigree, Cesar, Temptations, Sheba and other brands. “Pet households are influenced by many of the same trends and tensions that create opportunities in human foods and snacks.”

That is what prompted Mars to launch three new recipes under its Sheba cat food brand made with responsibly sourced seafood. “These new recipes were designed following recommendations set forth through a partnership with the Monterey Bay Aquarium Seafood Watch program, which aims to educate companies and consumers on sourcing fish in a responsible manner,” Monaco says.

Paul Cooke, vice president of industry relations for St. Louis-based Nestlé Purina PetCare, says retailers need to recognize that the pet consumer is buying for a member of their family and is interested in aspects such as nutrition value. “One of the leading drugstore companies recently discovered that the customer that shops the pet category is the same person their company is targeting,” Cooke says. “As a result they have focused heavily on expanding their pet category and offering the right brands. This strategy has proven to be very successful,” he says.

“Many grocery stores that I am talking to are now thinking about pet departments as either a draw to bring people in or— imagine this—making it into a profit center,” says Jonathan Kitto, managing partner, Mister Buck’s Genuinely Good Pet Food, based in Bloomfield, Ind. “For so many years after the big box pet stores came into existence, a lot of grocery stores really didn’t put up a fight. One manager told me, ‘I have pet food because I have to.’ But now we are driving people back to the grocery store to get food.”

Mister Buck’s is one of those niche brands that grocers are turning to as a way to set themselves apart from other channels. It markets three varieties of dry dog food, two of canned, including Fish, Duck & Potato and a dry cat food. The vast majority of its ingredients are sourced locally in the Midwest and $1 of each bag’s sale goes to local animal rescue organizations. Mister Buck’s also operates a greyhound dog rescue.

Mister Buck’s and Iams are among the growing number of pet food manufacturers using protein as the key ingredient, say observers.

“At Iams, we believe dogs and cats are best fed as carnivores,” says Taylor. “That’s why meat protein like chicken, egg and fish is the first ingredient in our foods. Animal-based proteins are best for dogs and cats because they include essential amino acids necessary for promoting hair and skin health, strong nails and building lean muscles.”

Secaucus, N.J.-based Hartz Mountain Corp. is promoting Chikables, small dog treats that contain U.S.-produced chicken as their first ingredient. “Small dogs have been dramatically growing in popularity over the past few years, and many owners are adding a second, third or even fourth small dog to their households,” says Anton Rivera, dog treats brand manager for Hartz.

“Chikables are intended to be a healthier alternative to conventional processed treats, which either don’t have a lot of meat or chicken or have it listed as the eighth or ninth ingredient,” Rivera says. “We have chicken as the No. 1 ingredient.”

For cats, Hartz offers Dentist’s Best Cat Treats. “Cats, as well as dogs, have problems maintaining healthy teeth over their lives,” Rivera says. “We have an active trademarked ingredient called DentaShield which helps reduce tarter formation on cats’ teeth.”

Come January, Iams will begin shipment of its newest product, Iams Shakeables, a soft and meaty dog treat. “Shakeables will be available with chicken, lamb or turkey, come in different shapes and are packaged in a novel, portable can. Shake the can and your dog will come running,” Taylor says.

Nestlé Purina is also introducing several products to the grocery channel in January. They include Friskies Rise & Shine, a wet cat food that is an egg scramble with accents of cheese or garden greens and will be available in four varieties; Purina Dog Chow Healthy BOWLfull, a “no sacrifices” way to give a dog a full bowl of food that has great taste, is high in protein and fiber, and offers a unique tender and crunchy kibble blend; and Purina ONE SMARTBlend Healthy Metabolism, which helps spayed and neutered cats burn fat and maintain a healthy weight.

“For each of these products there will be a heavy marketing effort at the point of sale, in addition to advertising­—both TV and digital media—and PR support,” Cooke says.

Just like in human food, all-natural is one of the hottest buzzwords in the pet food aisle. When it comes to all-natural dog treats one of the largest players is Seattle-based Blue Dog Bakery, which is in the process of redesigning the packaging on its 15 SKUs of dog treats to make them more contemporary. “We wanted to get a better handle on what resonated with consumers, what we wanted our brand personality and image to be in the marketplace,” says Kyle Polanski, CEO.

Although the packaging is changing, Polanski assures retailers that the inside has stayed the same. “We like our treats to be judged by what we call the Wag Test,” he says. “How hard is that tail wagging when you give your dog the treat? In a wag test competition we stand up and win hands down every time.”

Blue Dog’s newest product is Perfect Trainers. “They are soft-baked, about the size of a pencil eraser, with a high fragrance and only three calories per treat, so it is a highly desirable treat for the dog designed for highly repetitive training,” Polanski says.

Pet Center, Inc., under the PCI brand, has been manufacturing 100% natural dog treats for more than 20 years, according to officials for the Los Angeles-based company. They note that today’s shoppers place a high importance on buying only the best for their beloved companions.

Although the majority of its items can be found in pet specialty stores, PCI also has several items in grocery chains.

Gelson’s, a Southern California chain based in Encino, Calif., started carrying a handful of PCI items 13 years ago. Today, the company’s items dominate the retailer’s pet set with 30 SKUs that offer high margins and high turnover, say PCI officials.

Tug of war with pet specialty
More supermarkets are trying to stock innovative products usually limited to the pet specialty channel. Red Barn Pet Products is bridging that gap with its Chewy Louie line. While its Red Barn brand is available exclusively in pet specialty, the Long Beach, Calif.-based company introduced many of the same items under the Chewy Louie label for the grocery, mass, drug and club channels. “We wanted to bring the best of the best from pet specialty into the grocery channel,” says Tim Fabits, vice president, sales. “We have about 40 SKUs in Chewy Louie, whereas we have in excess of 250 with Red Barn.”

Changing market conditions have made it easier for smaller players, such as Red Barn, to get a toehold in grocery, Fabits says. “Category managers in grocery, drug and mass have started to seek out that kind of smaller niche type of product or line capitalizing on the growth in pet specialty,” he says. “Shelf space is always going to be an issue, but we have gained significant traction in the last five years.”

One product definitely slated to make traction is Brew Buddies, the latest dog treat from St. Marys, Ontario, Canada-based Omega Paw. “These are soft treats in the shape of a beer bottle that have the same ingredients in them as beer,” says Terry Hannaford, CEO.
“They are actually healthy for dogs, but we’re not going after the health marketplace at all on this one; we’re just going after fun,” Hannaford says.

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