Not Just an Animal

The humanization of pets in recent years is leading pet owners to treat their pets less as animals and more as members of the family. Consequently pet owners are purchasing foods, pet supplements and other pet products in the premium space more often. Premium pet foods accounted for 42 percent of pet food sales in 2014, followed by regular pet food at 30 percent and value pet food at 12 percent, states “Pet Food in the U.S.,” a September 2014 report from the Packaged Facts division of Rockville, Md.-based MarketResearch.com.

Even though pet parents are purchasing premium pet products, they are still shopping for these products primarily at mass market retailers and grocery retailers. In 2013, 44 percent of pet food sales came from the mass market and grocery channels, and 15 percent of pet food sales came from the club, dollar and drug channels, Packaged Facts reports. Retailers within these channels that offer their shoppers premium store brand pet products could capitalize on an important trend within the pet product market.

Offer first-class choices

In the pet food market, premium now means human-like, says Bill McKee, vice president of U.S. store brand sales for Siloam Springs, Ark.-based Simmons Pet Food Inc. High-quality pet food offers flavors and textures that pet owners would see on their own dinner table. For example, grilled and shredded formats or inclusions such as sweet potato, rice, bacon and cheese are popular, as are exotic proteins such as bison. Plus, some pet owners are looking for pure and limited-ingredient formulations.

“They care more about what is not in the food than what is,” he says. “No byproducts nor artificial colors and flavors is the norm.”

And in the near future, organic and non-GMO products also could become important to pet owners, McKee adds.

But premium brands often carry premium prices; consequently, retailers could attract consumers looking for high-quality pet products with store brand premium alternatives at a more economical price, says Chris Bessent, DVM and CEO of Wisconsin Freeze Dried, Hartland, Wis. All too often, national brands are forced to cut back on high-quality ingredients to pay high premiums for marketing and advertising. Since store brands typically don’t have these middlemen to pay, that money could go into creating a quality product.

And don’t think these consumers are easily fooled, she cautions retailers. To ensure they’re buying the “best,” these pet owners take advantage of what the Internet offers by researching products before they buy them.

“Today’s pet parents are more educated than ever before,” she adds.

Therefore, if retailers want to play in the premium pet product space, they must be committed to brand and product development, says Chris Ruben, CMO, EuroCan Pet Products, New Hamburg, Ontario.

“These are not short-term projects, so retailers should partner with suppliers who have the credentials and experience in the category,” he adds.

Health and wellness matter

Pet owners also expect premium pet food and treats to offer significant health and wellness benefits, especially since pets often experience the same conditions as humans, says Dale Metz, director of the companion animal business unit of Vets Plus Inc., Menomonie, Wis.

For example, functional pet treats could address a broad range of conditions — from dental health to joint care and even digestive support, he adds. But accurate labeling and adequate quantities of active ingredients will make or break the sale to pet parents.

“They expect to see the science behind the product’s claims or specific ingredient blend and want to be able to trust the quality of the product,” Metz adds.

McKee believes retailers have a significant opportunity to grow store brand pet food geared toward health and wellness.

“Most of the leading health and wellness brands are channel-exclusive and not readily available in wide distribution,” he says. “Store brand offerings in this style of product would not only make these products available where consumers shop, but would also offer a great retail value proposition as well. Plus, these products are typically more profitable for retailers and foster a sense of loyalty.”

Health and wellness opportunities can be found in the non-food space as well, says Fernando Gallego, director of global retail sales for Chino, Calif.-based Diamond Wipes. Representing a manufacturer of wet wipes for dogs and cats, Gallego has seen interest surge in natural and organic goods as pet owners grow more concerned about what is in the products they use on their pets.

Maintain their attention

When designing packaging for pet products, Chris Miller, sales manager for McAirlaid’s Inc., Rocky Mount, Va., says that retailers have just five seconds to not only attract customers to the brand, but also then engage and maintain their interest in the product by explaining the value the product will bring to them and to their pet.

One way retailers could attract and maintain consumer attention is with science-based messaging and manufacturer quality certifications, Metz says. Including specific claims such as “no soy” or “grain-free” will also help pet parents clearly distinguish products that meet dietary restrictions or allergies.

Another claim getting a lot of attention is “Made in the USA.” Many products that are made overseas have issues with contamination, Gallego says.

“It’s easy to cut corners when you don’t have to adhere to the strict rules the USA has,” he adds.

Therefore, retailers that manufacture store brand pet products in the United States will want to emphasize that fact on product packaging, says Holly Sher, president of Wheeling, Ill.-based Evanger’s Dog & Cat Food Company Inc. Something as simple as the American flag will do the job nicely without taking up much space or being hard to read.

As for packaging functionality, plastic pouches are expected to take over the pet food aisle, states “Pet Food Packaging,” a July 2014 report from the Cincinnati-based Freedonia Group. Pouch demand is expected to rise 8.3 percent per year to reach $540 million in 2018, the fastest pace of growth among pet food packaging types, the report adds.

Demand for pouches is expected to be bolstered by value-added conveniences such as zipper closures and the inherently light weight of the packaging.

Do offer premium ingredients that would appeal to humans.

Don’t exaggerate health and wellness claims.

Do advertise “Made in the USA” if applicable.

Don’t ignore pouch popularity in pet food.