Consumers’ “humanization” of pets continues and manufacturers are developing products to meet the ongoing trend.
A dog or cat does not know the difference between Angry Birds and Big Bird. Yet licensed products, along with higher-end premium treats and items that contribute to bettering pet health, are flying off retailers’ shelves.
For innovative and creative grocers with dedicated pet sections, the news is even better. Industry observers say grocery channel sales have outpaced other retail outlets in these important pet segments.
“Some grocers that are stepping away from what they have done in the past are making serious gains right now,” says Terry Hannaford, CEO of the St. Marys, Ont., Canada-based Omega Paw. “The grocers that have chosen to get away from the standard set are doing well and gaining back some of the market share they had lost to the large pet chains.”
Observers say the growth of these sub-segments is simply a continuation of pet owners “humanizing” their pets. The trend started with dog toys that were manufactured very similar to infant toys. Already accounting for about $1 billion in retail sales with 6% growth year over year, the toy segment is getting even more attention—much of it buoyed by licensed products.
Over the past year, officials for the Hartz Mountain Corp. say they have had success with its Angry Birds line of dog and cat toys. This year, Hartz is launching a full line of The Simpsons themed dog and cat toys in celebration of the 25th anniversary of the television show. Kimberly Cassar, divisional vice president – animal health for the Secaucus, N.J.-based company, says the line will include many of the show’s most popular characters including Homer, Marge, Bart and Lisa.
Of course the real allure for manufacturers when it comes to developing licensed products is making the connection with pet owner, not the pet itself.
“A big focus of what we do is ‘feel good’ toys,” says Leslie Yellin, executive vice president of Multipet International. “The reality is a dog or cat is not walking down the aisle picking out toys. So, for example, we have our Lamb Chop toy, it creates a sense of nostalgia for pet owners.” Multipet, based in Moonachie, N.J., also has a Woody Woodpecker with a voice box and a Garfield among its offerings.
Real meat treats and edible bones continue to drive sales in the estimated $2.6 billion treats category. “Specifically in the real meat treats category the grocery channel has seen impressive growth, double that of the entire market,” says Cassar. “We have noticed more focus on this segment with retailers providing better product assortment, dedicating additional shelf-space and more promotional offers for chicken treats.”
Observers say novelty-type items are driving sales in this area as well. Last year Omega Paw launched Brew Buddies—dog treats made from the same ingredients as beer. “It has been incredible to see consumers respond to Brew Buddies; they are eating it up,” says Hannaford. “The time is right. People are looking at the product and saying ‘hey, let’s have some fun with my dog.’”
This year Omega Paw is adding to the line with Brew Buddies dark formula, which has a full bodied taste like that of a dark beer and Brew Buddies long lasting chews, in the shape of a beer bottle. Omega Paw is also launching cat treats as well. “This marks the first time we are really getting into the cat treat market place,” says Hannaford. “Again, with cat treats we are going after the novelty and health aspect because we have had so much success in those areas with dog in the past year or two.”
The real meat treats segment is not the only one in which grocers are thriving. Sales of flea and tick topical products are on the rise as well. The flea and tick segment is estimated to generate about $400 million in retail sales annually and up 28% in dollar sales. In this area, Hartz is launching Hartz First Defense. Observers say monthly topical treatments are far and away the most popular form of flea and tick protection for both dogs and cats. They say the growth in the segment can be attributed to new innovations from branded products as well as generic forms of Frontline TopSpot that offer veterinarian quality protection at an affordable price.
In addition to Hartz First Defense, the company is launching new and improved Hartz UltraGuard Topicals for Dogs. Cassar says the product comes with an applicator that is designed to make the application process easier for the pet parent and more comfortable for the pet.
Observers say much of the growth in the flea and tick segment can be attributed to products that use fipronil formulations. “Knowing this, a retailer can reduce the number of lower margin items and replace them with products that are growing the category, like Pronyl OTC and Pronyl OTC MAX,” says Caryn Stichler, vice president of marketing for Sergeant’s Pet Care Products, based in Omaha, Neb. “Pronyl OTC is the generic to Frontline TopSpot and uses the same active ingredient consumers are looking for, fipronil.” Stichler says Sergeant’s has an aggressive national marketing campaign planned for the Pronyl OTC and Pronyl OTC MAX flea and tick brands in 2013.
Natural and sustainable are buzz words throughout the entire supermarket, and the pet section is no different. Pet product manufacturers are increasingly looking to offer more environmentally-friendly products and packaging.
“More and more consumers are reading labels and are acutely aware of not ‘hurting’ the earth for future generations,” says David Tagliatela, director mass and grocery for Muscatine, Iowa based Kent Pet Group. “Products such as our are made from renewable sources and we are very conscious not to be stripping the earth of its own core.”
Omega Paw is developing products that Terry Hannaford, CEO of the St. Marys, Ont., Canada-based company, says are made with nearly 100% recycled materials. “Not only are we using sustainable products, our products can be recycled and we can make products out of recycled materials.” For example, Omega Paw’s back scratchers are made of high-end carpet that for one reason or another was unusable. “We cut out the unusable portion and the high-end carpet allows us to make a better cat scratcher than most of our competition,” Hannaford adds.
Decreased packaging materials are another way manufacturers are lessening their carbon footprint. Leslie Yellin, executive vice president of Multipet International, says that while it is important to let consumers know what a particular product is, they can do so with a simple sticker instead of a blister-pack. “We have made a strong effort to cut back on the amount of packaging we are using to become more sustainable and be more conscious of the environment,” she adds.
The Hartz Mountain Corp. recently redesigned its shampoo bottles for sustainability and consumer enhancement. Across 10 million bottles, 220,000 pounds of plastic packaging materials was reduced in production, say company officials. The new bottle caps are made from high-density polyethylene and both packaging components are recyclable.