Category Insights: Pet Food and Supplies

You Can Pet Your Bottom Dollar On It

From premium dog food to $30 dog bowls, private label tries to find its way in the estimated $53 billion U.S. pet industry.

April 8, 2013
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Fluffy and Fido are getting a lot of attention lately, and we don’t mean by way of pets and scratches.

Gift guides for shoppers’ pets abounded in the media leading up to the holiday season. Retailers such as PetSmart took advantage of the furthering “humanization” of pets by appealing to owners with shopping incentives. PetSmart offered “Deals of the Day,” savings on select pet gifts for 12 days before Christmas.

Pet gifts usually are for the human who owns the pet, the AP reported in December, using shopper Allie Robino as an example. Robino bought her dog

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Pet food

PetSmart’s Sunbeam Holiday Dog Treat Maker, essentially a waffle-maker with dog-bone molds.

Target debuted its Target + Neiman Marcus Holiday Collection, which included an Oscar de la Renta Pet Bowl, priced at $29.99, and Collar and Leash, priced at $39.99.

Last June, PetSmart rolled out its exclusive Bret Michaels Pets Rock collection including toys, beds, apparel, collars, leashes, and bowls.

“I know there are other pet parents like me who want to show off their pets in rock-star style,” said Michaels in a press release.

“The Bret Michaels line is exclusive to PetSmart and has had very positive response from our customers,” said Amanda Tingley, PetSmart Director of Hardgoods.

“They expect and we delivered a program unique to his brand and (it) is suited specifically for customers who enjoy a lighthearted spin on the traditional holiday.”

As visitors entered the PLMA 2012 Private Label Trade Show in Rosemont, Ill., they were greeted by a new Pet Care Pavilion created by the PLMA to showcase manufacturers of private label pet food and pet supplies.

“Many retailers don’t understand how they should be expanding or exploiting the pet market for private label,” PLMA President Brian Sharoff said of the pavilion.

“All the people that came to me at the private label show were interested in lower price,” said Holly Sher, president of Evanger’s Dog and Cat Food Company Inc.

She did see a few attendees from big-box stores looking for quality products though, she said.

“There are consumers that will go to the store for their pet,” Sher said. “If they’re going there to get their pet food, they’re going to sell shoppers other products.

That’s why big-box stores are getting into pet food; they see this is a growing business.”

“It’s one of those categories where not only do you have it in stores and supermarkets or mass merchandisers,” Sharoff said, “but there’s also specialty chains that spend all of their time worrying about pets and pet foods and pet care. It has all those elements. It’s more of a marketing challenge.”

But it’s a challenge that retailers need to address.

According to the 2011-12 APPA National Pet Owners Survey, 62 percent of U.S. households own a pet, which equates to 72.9 million homes. For 2012, it estimated that $52.87 billion will be spent on pets in the U.S.

According to Chicago-based SymphonyIRI Group’s breakdown of private label pet categories, private label cat/dog litter and deodorant had the highest share of the market, at 20 percent, although the category was down almost 10 percent to more than $212 million, in the year that ended Nov. 4.

Private label cat/dog needs increased the most in private label pet categories, up more than 15 percent to more than $318 million, with about a 17 percent share. Mintel’s report “Pet Supplies - US - June 2012” said retail sales of pet supplies in the U.S reached more than $11 billion in 2011 and were expected to grow by another 3.3 percent in 2012 after adjusting for inflation.

According to Mintel’s report “Pet Food - US - March 2012,” indicators suggest that even when consumers are carefully watching their budgets, they will continue to spend on their pets as members of the family for whom the basics at least, and often more, are considered non-negotiable.

So where do retailers start when looking to develop their pet care aisle marketing or add new private label products to their lineup?

According to Euromonitor Head of Global Petcare Research Paula Flores, because of the rise in humanization, premium products in the pet category are expected to grow strongly in the future. That includes all-natural and organic products, weight control, fortified and functional products, as well as improved packaging and sustainability.

Mintel reports that innovative natural products, and those that promote pet health, often command modest price premiums. Sales of these SKUs are likely to play a key role in driving category growth between 2012 and 2016.

Meeting this need, Wal-Mart gave premium dog food a go last year with the launch of its new brand Pure Balance, premium dog food by Ol’ Roy, Walmart’s extensive economy brand.

“Our customers told us they wanted to be able to feed their dogs a dry food made with pure ingredients without having to make a special trip to the pet store,” said Jody Pinson, VP of Pets at Walmart. “We listened and are excited to offer an ultra premium dog food, at a price our customers can afford.”

Walmart’s Pure Balance dry dog food is positioned against top pet specialty brands and includes no soy, wheat or corn additives, no artificial colors, no preservatives, and no chicken by-products.

“Pure Balance’s first and primary ingredient is either real lamb meat or poultry, and contains a blend of omega 6 and 3 fatty acids good for a healthy coat and skin,” Pinson said. “Additionally, the product supports vision health, as well as heart health and immunity.”

Pure Balance is packaged in a black bag, a color which seems to have become a symbol of premium brands in private label.

“The packaging was designed to highlight the first ingredient of lamb or poultry, all natural ingredients, and no corn, wheat or soy,” Pinson said. “We believe the dark packaging allows the picture of the real ingredients to become more vibrant on the front cover. “

Pinson said the response to Pure Balance had been positive, and Walmart would continue to expand based off of customer feedback.

“All of our private label items are made with solid formulas and manufacturers to provide both a savings and value to our customers,” she said. “It’s our mission to save our customers money so they can live better and this includes their four legged friends that many consider family.”

“The stalwart sales in pet food speak to the increasing importance of pets in family life, as cherished members of the family who deserve nothing but the best,” Mintel said in its “Pet Food - US - March 2012” report.

Total U.S. retail sales of pet food seem unimpressive at first glance, slightly more than $18 billion in 2011, representing a 1.8 percent increase in sales that year, after a 2.5 percent increase in 2010, it said. However, Mintel points out, these figures came during one of the worst economic downturns in U.S. history, in which most consumer categories took a tumble.

However, pet food product innovations have decreased.

“We’ve been around since 1935 and what I’ve seen is everyone wants to jump onboard,” Sher said. “We get calls every day from everyone. Ideas have been done; once in a blue moon you see something revolutionary.”

But according to Mintel, this doesn’t mean that suppliers have nowhere to turn when it comes to capturing consumers’ attention. Mintel suggests using Groupon-style coupons and points to the fact that consumers are educating themselves armed with the power of the Internet and pet food rating websites.

Mike Sagman, Editor of, a website offering dog food reviews and ratings, told PLBuyer that he finds private labels are a lot like the brands they compete with – there are some great ones, and some are very bad.

His site serves to educate the consumer with what he estimates are more than 700 dog food reviews, although he admits there are thousands of pet food formulations available.

According to Sagman, although mass merchandisers offer pet food, many of these products are sold in mom-and-pop shops. His suggestion for retailers, no matter the size, is to take advantage of the review sites, social media and press articles by distributing information mentioning brands being sold to their customers.

“Dog foods are a lot like wine,” Sagman said. “Except we can’t turn around and ask the dog [how he likes it].”

“Dog foods are a lot like wine,” Sagman said. “Except we can’t turn around and ask the dog [how he likes it].”

Sagman suggests marketing private label dog food with shelf tags cards, akin to the way a wine store would offer third party ratings.

“Retailers would gain a lot to try to get the products rated by a third party,” Sagman said.

Giving shoppers information from a reputable source at point-of-sale is free, and even a small shop easily can distribute the information.

”If your dog food makes a list, print the list,” Sagman said simply.

“The consumer is getting more educated,” Sher said. “In our end of the business, they are looking for more quality products.”

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