A pet food manufacturer's life
Steve Mills remembers the days when pet food supplier American Nutrition Inc. was just a pup.
That was in 1984 when Mills, the company’s senior vice president of customer brand and co-manufacturer sales, joined the Ogden, Utah-based manufacturer of dog and cat food, including products for private brands. At that time, American Nutrition Inc. had small plants in Ogden and Phoenix.
“I remember hitting $10 million in sales, and we had a big celebration,” Mills says.
This year, American Nutrition Inc. will approach more than $400 million in sales. It now has five manufacturing plants across the country and serves all of North America and many countries around the world.
That pup has grown into a healthy hound.
In his 35 years at American Nutrition Inc., Mills has watched the company’s offerings evolve from basic fare to high-end fare. It has also added biscuit and canned food operations during that time.
American Nutrition Inc., founded in 1972 by Jack Behnken, touts it can custom manufacture pet consumables with formulation expertise, market intelligence and turnkey production for retailers seeking private brands.
“The complexities of pet food manufacturing facilities today are way different than they were even 10 to 15 years ago,” Mills says.
When Mills started at American Nutrition Inc., the descript for pet food was “brown and round,” he says. While the company has always held itself to a high standard of manufacturing, its products back then were fairly basic, as they were for most all pet food manufacturers.
“It was just a brown natural-colored kibble, and there was one shape and one color of kibble in the bag,” he adds.
The ingredients were elementary: corn, meat and bone meal, and soybean meal, among other elements. The products were mainstream and value-oriented.
But our business has evolved to where we do very little of that type of product today,” Mills says. “Most of what we do and what our plants are designed to produce is very high end and high-value food for very specialized pet diets.”
The term “exotic,” once reserved to describe a fancy Mediterranean restaurant’s cuisine, has been incorporated into pet food. American Nutrition Inc. imports duck from France, rabbit from Italy, and greenlipped mussels, lamb and venison from Australia and New Zealand to use as exotic ingredients in pet food to provide more taste and nutrition.
“We have house formulas that we can offer retailers as private brands, which run the spectrum from value all the way up to premium and super-premium formulations,”
Mills says. “We also work with customers who have enough volume to warrant a custom formula. We have a full research and development department that can help develop those formulas.”
American Nutrition Inc. is also looking at different ways to produce formulas with a higher meat inclusion percentage. Its grain-free dog biscuits, for example, are now made with high percentages of real meat.
Bags are also smaller, and pet food is no longer only available in paper sacks. Bags are now made of myriad hgh-end materials and come in different finishes and closures, Mills notes.
“The trend is smaller production runs of high-end formulas into smaller bags,” he adds. “All of that is different from 30 years ago when it was long runs and easy-to-make formulas into very big bags. We have added a lot of small-bag packaging capability with new equipment in each one of our plants in the last year.”
A SIMPLE PHILOSOPHY
Most everybody knows Nike’s “Just Do It” slogan. When American Nutrition Inc. began, Behnken implemented the slogan, “Doing It Better,” a straightforward philosophy that has become top of mind for employees throughout the company. “Doing It Better” is about being more innovative through nutritional science and production, among other segments.
This year an additional slogan was introduced called the “ANI (American Nutrition Inc.) edge.” The philosophy behind this slogan is to get employees to collectively believe that what they do is not just about the company making pet food for a profit, Mills says.
“We enjoy our pets, we love our pets … they are part of our families,” Mills says. “Our purpose is to nourish and enrich a lifelong connection between people and their pets. Our employees understand that what we’re doing is providing foods and treats for loved family members.”
Mills talks about a recent conversation an American Nutrition Inc. vice president had with a plant manager that best illustrates the nuances of “the ANI Edge.”
“He was talking about how much he liked working for American Nutrition Inc. because of the good things we’re doing here,” Mills says of the plant manager. “He said we’re creating foods that are nutritious for pets and allowing those pets to have great and long lives with their pet parents.”
That mindset filters down from the top, says Mills, who calls Bill Behnken, Jack’s son and CEO, “a very involved leader who is focused on customer service, quality and food safety.” The company’s culture is entrenched in Behnken’s ambitious approach.
“GREAT FUTURE” FOR PRIVATE BRANDS
More pet owners are giving the same attention to their pets’ diets as they do to their own — and higher-quality pet food selections with more healthful ingredients are increasing because of it.
Pet food revenue rose 12% between 2012 and 2017 to about $24.6 billion, reports market research firm Mintel. Dog and cat food sales account for more than 75% of the category, while treats are the strongest performing segment, Mintel notes, adding that revenues are forecast to rise 13% to $27 billion between 2017 and 2022.
Mills, who owns a dog and a cat, is one of those pet owners who feeds his animals top-notch fare. And he says grocery retailers have an opportunity to differentiate in the pet food sector with their high-end own brands.
“When you go into grocery stores today, you’re seeing some very big super-premium brands that never used to be there,” he says. “So there’s an opportunity for retailers to have a private label formula or other pet food products that emulate those super-premium brands and provide an alternative to the mainstream offerings most retailers have today. I see a great future in pet food for private label, especially with consumers upscaling to better formulas.”
The pet food market is flooded with many different products that contain raw products, and raw products mixed with kibble, Mills says. Higher-end canned products are also making a comeback. As it has in the more than four decades that American Nutrition Inc. has been in business, the pet food market will continue to evolve, and rapidly, Mills says.
“The challenge for us and our senior team is [determining] what pet food is going to look like five years from now and 10 years from now,” he says.
For American Nutrition Inc., the emphasis will always be on quality, food safety and service, Mills says.
“We’re still doing business with customers that we had when I started 35 years ago,” he notes.
And nearly a half-billion dollars in sales equates to a lot of well-fed canines and felines