Following contract manufacturer MenuFoods’ March 2007 recall of 60 million cans and pouches of pet food, natural & organic pet foods have rapidly gained share in the overall pet food industry. Private and national brands are to this day trying to recover from the months-long debacle that saw 471 cats and dogs poisoned, with 104 reported dead.
The tragedy sent pet-owners scrambling from private label to natural & organic, fleeing the specter of potential melamine, aminopterin and cyanuric acid tainting to the safer fold of premium options. NBJ noted a 27% spike in U.S. animal nutrition sales in 2007 following the recall. And the momentum carried on into 2008, when sales of natural & organic pet food climbed 18% to reach $1.2 billion in consumer sales, according to NBJ.
The bad news kept coming for conventional and store brands of pet food. Just a year after the Menu Foods recall, retail chain Wegman’s had to recall its private label dog and cat foods after a salmonella threat surfaced out of its contract manufacturer MarsPetcare. And more recently, in late December 2010, several value brands from supermarket giant Kroger were recalled after the discovery of toxic chemicals in the food’s corn filler.
NBJ Bottom Line
Opportunities abound for natural & organic pet food manufacturers to differentiate themselves from their value-oriented and oft-maligned counterparts. The trend is already underway, as private label brands of cat and dog food are gradually losing share in total U.S. pet food sales. According to Nielsen, in the 52 weeks ended January 22, 2011, store-brand dry dog food lost 1.2% share in total pet food, while dry cat food lost 1.7%.
And though the pet industry is growing, pet ownership is experiencing minimal growth, notes Todd Martin, vice president of marketing for natural pet food company Castor & Pollux. (NBJ caught up with Martin at the Castor & Pollux booth at Expo West in March). At the same time, he says, natural & organic pet food is growing 12% to 15% annually, so it must be stealing share from conventional and private label brands.
The initial store-brand fallout in 2007 was bad enough to stifle Kmart’s pet food line, according to SupermarketNews, and only recently has the company moved back into this space. While leaching from one sector, the recalls have had the effect of injecting new momentum into natural & organic. But as fears lessen, what can natural & organic brands do to keep consumers interested in their premium-priced products?
Since the cheapest of store brands are often mostly filler, packed with corn and wheat and other crops unfit for cat and dog diets, natural brands can point to the nutritional value of their products. Martin notes that Castor & Pollux’s dog food is highly nutritious, and that its price evens out with cheap alternatives because of its nutrient content. A dog can consume less of the premium fortified brand than it would need to eat of the store brand to fulfill its nutritional needs.
NBJ will explore the world of natural & organic pet food in greater depth in our August 2011 Animal Nutrition Overview issue. To view our list of upcoming issues, please visit the NBJ Editorial Calendar.