Posts Tagged ‘pet business’

European Pet Product Market Continues to Expand

Tuesday, May 4th, 2010

As more consumers consider their pets family members, they continue to spend even on discretionary purchases.
By Martha Spizziri

In spite of the ongoing recession, global sales of pet products continue to increase, with worldwide spending reaching 56.8 billion euros (about $81 billion), according to market research firm Euromonitor International. For the first time, as stated in report by Euromonitor, European expenditures exceeded those in North American with 21.7 billion euros (about $31.1 billion) spent on pet supplies in 2009, compared to 21.3 billion (about $30.5 billion). That growth should continue.

“For the next years, you can’t call anything recession-proof anymore, but within that context, pet food is,” said Euromonitor global research manager Lee Linthicum.

Euromonitor has revised its 2009-2014 growth forecasts for pet food and care downward slightly, he noted–from nearly 3 percent to 2.3 percent year-on-year growth, adjusted for inflation.

Still, “the human industry would kill for that growth,” Linthicum said.

In Britain, a relatively mature market, the growth rate for that period will be slightly below average at 0.9 percent. That is according to a February 2010 Euromonitor report titled, “Pets at Home sale underlines potential for pet superstore growth in UK.”

Products that offer convenience have been selling well, and premium products and discretionary items such as treats, clothing and high-tech gadgets remain surprisingly popular. A big reason for that, according to Euromonitor, is the trend toward humanization of animals, especially in Western Europe. People increasingly see their pets as members of the family, and spend money on them accordingly, said Linthicum. That trend is especially pronounced in the United Kingdom.

”Britain is an anomaly in the context of Europe. They’re more like America in terms of humanization of pets,” said Linthicum.

“The international pet industry is trying to overcome the present economic crisis with new products and innovations,” said Klaus Oechsner, committee chairman of the German industry.

Examples include products aimed at keeping pets fit and well: relaxing music for pets, special dog beds and toys. Another trend is convenience.

“While consumers place considerable value on the companionship that pets can provide, most want to minimize the time and effort they expend on pet-related chores,” said Linthicum.

“There is also a lifestyle trend, with really lovely accessories like collars, leads or bowls in fashionable colors,” Oechsner said

Pet Food Trends
Nevertheless, Linthicum said that Britons and other Europeans are not as likely as U.S. consumers to spend on whimsical items such as pet yoga and clothing. European owners are more apt to spend on health-related purchases, such as food for a specific breed, age or health condition, or food that is fortified with ingredients such as probiotics or omega 3.

“The same functional ingredients you’d find in human food,” Linthicum said. “They’re buying premium pet foods–Eukanuba, Iams, Hill, Purina One. With few exceptions, you’re not going to change your brand of pet food, particularly if you’re a premium pet food customer.”

Oechsner reported that pet owners also are interested in foods that are free of preservatives, coloring agents and other possibly unhealthful ingredients.

Despite the addition of human-type ingredients, an emerging trend is pet food that is “based as closely as possible on the animal’s natural nutrition,” said Hans-Jochen Büngener, chairman of the Interzoo exhibition committee, in a March press release. Alexandre Saiz Verdaguer, CEO of the European Pet Product Wholesaler Association, predicted that grain-free, 100-percent meat pet foods, “will be new mass sellers of next decade.”

Büngener also said he sees a trend toward more products in the food-supplement segment and expects to see many new products in the health and fitness segment introduced at the Interzoo trade fair in May.

Despite a willingness to spend on premium foods, Linthicum noted, “People are trading down within premium brands” — that is, they are still buying those brands, but choosing less-expensive lines. Pet-food companies may offer consumers some relief, though. Antje Schreiber, spokeswoman for the Interzoo pet-products trade fair, said that some pet food companies would reduce their prices.

Competition from Pet Superstores
Pet superstores such as Pets at Home, Fressnapf and Petco, may profit the most from consumer attitudes.

“People are shopping smarter, so that tends to favor pet superstores because they can still get brands like Hill’s and Eukanuba, but cheaper,” Lee Linthicum said.

Linthicum also pointed out that the superstores are adding more services, such as grooming and boarding and even veterinary services in some cases, making themselves into one-stop shops.

“It’s a retail format that seems to be working very well,” he said, pointing to the expansion of such chains as proof.

Though in some markets, such as Italy, Spain and Portugal, there is a bias toward smaller pet shops, “It’s only a matter of time till [pet superstores] are there as well,” he predicted. In those countries, the bias is mainly a result of the current, fragmented nature of retail, he said.

He noted that in France, by contrast, competition from superstores is held in check by zoning laws.

Linthicum said independent pet shop owners could best deal with the competitive threat in two ways: First, independent shops could “remake themselves into a destination in their own right,” offering their own grooming, training and boarding services. In addition, they can continue to do what they have always done well: Provide expertise customers cannot necessarily get at a superstore.

Aquatics
Customers’ willingness to spend on pets may not be as strong when it comes to fish. John Dawes, who reports on aquatic pets for Pet Product News International and other publications, said that some European fish importers and wholesalers are reporting increased interest in the modestly priced “bread-and-butter species” in preference to some of the more specialized–often more expensive -types of fish.

Small “nano aquaria” are becoming more popular in Europe and worldwide. They are attractive to consumers since they can be set up at a relatively low cost, and because they fit in small spaces. They are often sold in packages that include all the necessary equipment — aquarium, lights, filters, and stand — which makes it easy for people to get started in the hobby. Dawes noted that larger models are being introduced that stretch the meaning of “nano.”

Heightened awareness of the negative economic and ecological consequences of invasive species is starting to take hold in the aquatic industry and among consumers. In the Netherlands, several parties, including the pet trade organization Dibevo, recently signed an agreement to voluntarily refrain from selling and producing five pond plant species. In the United Kingdom and the Netherlands, the governments support an awareness campaign. The U.K. government launched the Be Plant Wise website to educate the public about the problem of invasive pond plants. It includes a video showing how to identify invasive species. In Holland, the campaign is now also supported by the aquatic industry, according to Dr. Alex Ploeg, secretary general of the group Ornamental Fish International.

“Increasingly, the industry is becoming involved in the consultation process regarding invasives with government agencies and is being seen more and more as being part of the solution rather than being blamed as part of the problem,” said Dawes

Herps
In the United Kingdom, reptiles have surpassed cats and dogs as the most popular pets.

“There has been a trend towards keeping some of the smaller Asiatic monitors over recent years, and crested geckos have soared in popularity,” said David Alderton, editor of Britain’s Practical Reptile Keeping (PRK). “People are predicting big things for hog-nose snakes, with the number of color morphs expanding rapidly.”

Bearded dragons are the most popular species, according to a recent PRK survey. Mediterranean-type tortoises are also favorites.

As for herp product trends, Alderton said, “Vivariums are definitely out for tortoises, especially Mediterranean ones.”

Most breeders now recommend tortoise tables as being the best environment. They are usually made of wood and often are available from companies that make rabbit and guinea pig runs, he added.

In other herp-product news, the PRK survey found that readers favored Exo-Terra brand terrariums — not a big surprise, according to Alderton. He said the appeal is likely the range’s adaptability and the wide selection of related equipment available. Alderton also mentioned that hobbyists are becoming more interested in providing the proper lighting — both to protect their herps’ health and to help encourage breeding.

Recession Game Plan for the Pet Industry

Monday, April 19th, 2010
While a troubled economy has hurt many retailers, some small adjustments to a pet store’s sales strategy can shore up the operation’s bottom line and foster goodwill with customers.

A (not so) funny thing happened on your way to success as a pet retailer. Our great national recession undermined consumer confidence, destroyed Americans’ invested savings, burst the bubble of inflated real estate values and thrust businesses large and small into financial jeopardy. Through no fault of your own, your thriving neighborhood pet store is now endangered, your loyal customers’ visits are less frequent as they find it more convenient (or more economical) to buy their pet necessities during their supermarket trips, and potential new customers are questioning the need to pay a little more for the pet food and supplies you carry, versus the prices at Wal-Mart or Target. So, what are you going to do about it?

Don’t Panic
Yours was a solid business that filled a neighborhood need before the economy went south and, with a few adjustments, it can continue to fill that need and prosper anew. But you have to acknowledge the change that has occurred, embrace the new reality and signal to your customers that you recognize the impact on their finances. You need to show them you are prepared to continue to earn their loyalty and help them care for their family pet in the style that they are accustomed to, but with an emphasis on affordability that may not have been part of the equation previously.

Don’t make radical changes in your store’s décor or in the physical placement of major product categories. Part of your appeal to your clientele is the familiarity, the comfort zone you provide for them and for their pets. Too much change too quickly is upsetting and may look like desperation to customers seeking reassurance and the safe haven of their weekly shopping routine. You’ve worked hard to create the image you enjoy in your customer’s eyes; don’t abandon that image. Don’t lose that emotional bond with your customers; instead, capitalize on the relationship by assuring them that you’re there for them, that you’ve got solutions to their pet needs, right where they’re used to getting them.

In attempting to stimulate a lift in sales, many companies make the mistake of morphing into something they’re not. This alienates their customer base by sending mixed signals and eroding the customer’s confidence in where they are spending their shopping dollars. For example, an upper- to moderately-priced pet store that suddenly discounts products broadly to generate sales volume is confusing its customers and opening the door to concerns about product quality or even the possibility of the retailer going out of business altogether.

Similarly, bringing in quantities of lower-quality promotional products to hit “special purchase” price points in an effort to drive short-term sales is often a mistake, for it substitutes a lower value item for the in-line product the customer would likely have chosen from your regular assortment, it calls un-needed attention to the comparatively higher regular prices you have already established and it usually results in customer dissatisfaction when the inferior quality item fails to perform as expected.

Less is More
It is a far better strategy to offer only a limited number of off-price items from the regular assortment for a specific time period for a few important reasons. First, you will enjoy enhanced sale credibility, since the comparable regular-price value for the items has already been established in your store. Second, you instill “buy now” urgency in customers, since the sale is only for a limited time. Third, you retain the margins on the other items in your customers’ purchases by not discounting multiple items across the board.

A series of limited-time offerings can be strategically presented as a “Weekday Recession Special” program, which will protect and maintain your image as a better/best pet retailer that delights its customers with occasional great savings on products they really need, even in these difficult times. Better still, you will drive additional sales on lower-volume weekdays and avoid discounting your Saturday/ Sunday regular business base.

You’re Not Alone
If your business has slowed, so has the rest of the pet sector. Your sales reps or distributors have felt the slowdown, too. Once you’ve identified the items or categories you think would work best as part of your new “Weekday Recession Specials,” call your salesman and ask if he wants to participate with a temporary cost price reduction to drive incremental unit sales, which will prompt a quicker reorder.

Do not let him talk you into any “special purchases” of items outside your existing assortment; as I mentioned, this strategy can confuse customers and usually works best for the supplier, helping him clear out old unproductive inventory at your expense, muddying your value story and obscuring your basic assortments.

This simple approach–giving customers an opportunity to buy a series of a few great, familiar products at compelling prices–in addition to the store’s great product assortment and superior customer service will ensure that customers are delighted with the store and will repay you with their loyalty. Suppliers will see that you are not sitting on your hands, waiting for things to get better. You are taking decisive action to drive your business, and they will compete to supply you with great deals to be a part of your “Recession Specials.” This is a truly a win-win-win opportunity; one which will see you through even these uncertain times.

Jim Alvord is the owner of JBA Marketing, Inc., which provides pet industry consultation for product development, packaging and sales marketing strategies to manufacturers and retailers. He has been a career senior merchandising executive at department, discount and specialty store retailers, most recently at Petco Animal Supplies.

Reprinted from PetBusiness.com-3/1/10.

Biting Into Dental Health

Monday, February 8th, 2010

Oral care products represent one of the fastest-growing categories in the pet industry, and retailers would be wise to get in on the boom as early as possible.

As it is with humans, good oral hygiene is essential for the health of dogs and cats, says Bud Groth, president of Spring Park, Minn.-based PetzLife Products, Inc. The problem is that the need for pet oral care doesn’t yet have the same high recognition factor among consumers and even among some pet retailers, he explains. The result is a lot of unnecessarily neglected mouths.

Category Gaining Teeth
Educating consumers about the importance of pet oral care is simply good business for pet retailers. “This is a growing category, and a strong one for us,” says Nadine Joli-Coeur, co-owner of Natural Pawz, a retailer with six locations across Houston. “Vets are suggesting more teeth cleaning, so there is more general awareness and more concern.”

Natural Pawz carries products for cats and dogs, and focuses on natural foods and products, holistic health and pet accessories. Joli-Coeur carries dental care products in all six locations, and her inventory features an array of items, including toothbrushes, toothpaste, liquids added to water to reduce plaque and tartar, dental chews and more.

“We’re seeing growing demand from dog owners, and also seeing a slight growth trend with cat owners,” she says. “We don’t usually have cat owners brushing their cat’s teeth; they’re usually looking for something to put into water or a hard treat.”

Dental-care products provide retailers with a chance to offer more value to their customers. Joli-Coeur says people will often come in with problems or questions related to their pet’s oral health, giving her an opportunity to connect with them in a meaningful way and to provide assistance.

These products also offer customer education opportunities. Take the seemingly simple chew, for example. Vetradent Inc. manufactures Bluechews, a dental health bar for canines, says Pam Alexander, president and CEO of the Ft. Lauderdale-based company. Because Bluechews must be chewed a certain amount of time in order to work, they’re sized to the dog, she explains. However, since there are more small chews per bag, compared to the larger chews, customers often economize by purchasing the smaller bag, making the chew ineffective.

“Customer education, in this respect, is essential,” says Alexander.

In addition to providing real value to pet owners, dental care products provide attractive profit margins for retailers, says Jorge Zarur, general manager of Houston-based Benedent Corporation, manufacturers of the Triple Pet Triple Head Toothbrush. “The markup [on the company’s toothbrush] is good and solid,” he says, adding that the product’s smaller size, relative to other inventory like beds, makes the category an even more profitable use of shelf space.

Promoting Awareness
As awareness about the importance of dental health in pets has grown, so has the range of products on the market. Joli-Coeur says she’s noticed, when attending industry shows, that there’s more of a focus on this category.

Groth agrees. “Oral care is becoming the most talked about issue in the health arena for dogs and cats,” he says.

The economy is playing a huge part in this phenomenon, fueling consumer interest in less-expensive alternatives to costly veterinarian-delivered dental care, says Groth. This has sparked no small amount of product innovation from manufacturers.

For example, there’s PetzLife Oral Care Gel (good for cats) and Spray, both designed to remove plaque and tarter, freshen breath and heal infected gums, says Groth.

From Ark Naturals Products for Pets come Breath-LESS Chewable Brushless Toothpaste and Breath-LESS Fizzy Plaque Zapper. The “toothpaste” is actually a bone that comes in narrow and wider diameters. The odorless, colorless and tasteless plaque zapper is added to water, making it cat friendly, says Susan Weiss, president of the Naples-Fla.-based company.

Then there is PlaqClnz from Phoenix-based SmartPractice. Consisting of three items–a pre-treat spray solution, an oral gel and an oral irrigator–the PlaqClnz kit is currently directed to groomers, explains Bruce Muller, the company’s director of marketing and sales. However, the gel is intended for sale to clients, affording an additional retailing opportunity.

As more dental care products become available and as more retailers stock these items, consumer awareness will increase, further fueling category growth. Manufacturers are determined to assist. Consider Vetradent. This year the company is focusing attention on in-store demos, signage, and developing an educational DVD they’ll send to retailers and also post on their website.

But retailers must do their part through innovative displays, moving the items to prominent locations in the store, samplings and demos, promotions, and staff/customer education, says Weiss, who also suggests taking and posting photos of satisfied customers and their pets.

“The market is still too green for people to be walking into the store looking for [these items]” says Zarur. “They just don’t realize this opportunity exists, and that the opportunity exists to save money.”

Originally published at www.petbusiness.com