Pet food recall: Have a disaster supercharge pet food sales

Well, here is something new: Karlene Lukovitz concluded in her article “Pet Food Recalls actually boosted Sales” for Media Post News Marketing Daily that after all there also came something good out of the pet food industries most disasterous recall back in 2007. Hard to believe that someone can find anything good about that nightmare. Here’s what she said:
“The recalls of contaminated pet food in Spring 2007 encouraged owners to convert to higher-priced foods that were perceived to be safer. This trend to premium helped boost dollar sales for the category not only in 2007, but to a smaller extent last year--despite the dramatic downturn in the economy, according to a new report from Packaged Facts.
U.S. pet food sales grew 5.5% to an estimated $17 billion in 2008 and grew by a cumulative 20.9% (CAGR (Compound Annual Growth Rate) of 4.9%) between 2004 and 2008, PF estimates in the latest edition of "Pet Food in the U.S."
IRI InfoScan data showed category sales in tracked retail outlets up 6.4% to $5.9 billion for the 52 weeks ending Nov. 2, 2008, including a 7% gain in dog food sales (to $227 million), a 6% gain for cat food (to $125 million) and a 3% gain for other pet food (to $6 million).
Dollar sales reflected consumer trading up and higher ingredient costs, not volume gains. Overall pound sales were down 2% and unit sales were down 6% last year, continuing the pattern seen in previous years, PF reports.
The analysts project that the economy will slow the category's sales to 4.5% in 2009 and 2010, followed by more tapering off through 2013. CAGR for 2008 through 2013 is projected at 4.1%, with premium demographics and products accounting for an even larger part of the overall market going forward.
As owners extend their concern with healthy eating to their pets and manufacturers push premiumization, the products that continue to drive growth are those that include claims such as organic, locally grown, human-grade, made in the U.S.A., whole and "real" ingredients (meat, fruit, vegetables, grains), high-protein and grain-free/non-allergenic).
As with human foods, functionals and nutraceuticals are hot for the pet set--especially those targeting age- and weight-related conditions with ingredients like glucosamine, omega fatty acids, antioxidants (including "dark fruits" like blueberries and cherries) and probiotics, PF points out.
The number of new pet food products shot up last year. During the first 11 months of 2008, 270 new pet food products were launched-- 51% more than in all of 2007, with the number of SKUs rising 119% to nearly 1,500, according to Datamonitor's Productscan Online.
PF also sees potential in the frozen/raw and refrigerated pet food segments. "Each will likely see the entry of a large marketer such as Del Monte (a natural for refrigerated especially) or Nestlé Purina during the near future," the analysts note.
On the marketing front, U.S. manufacturers spent $520 million on national advertising of food and non-food pet supplies in 2007. Over 60% went to television and only 5% to the Internet.
However, like other categories, pet food marketing is shifting online. PF notes that both Procter & Gamble (Iams) and Del Monte (Meow Mix, Milk-Bone) have been allocating more of their spending to branded-entertainment projects instead of traditional media spends.
Meow Mix has been particularly aggressive. The brand launched its first game show for pet owners ("Meow Mix Think Like a Cat") on GSN last November, in addition to its earlier branded series for Oxygen and Animal Planet, and has been hosting high-profile "pop-up" events and seminars for cat owners.
Celebrity branding is also becoming a bigger factor in the pet food category, with Ellen DeGeneres, Cesar Millan and Rachael Ray entering the market last year.”
Wow, just like I said the other day in “Chemicals in pet food Part 2: Marketing campaign indicates: Unhealthy, chemically enhanced pet nutrition is here to stay”, how easy we forget. Let some time go by, get a write up like the above and the number of pet owners who will remember is dwindling down. That same comment of mine also showed that Karlene Kukovitz’s predictions are no fantasies: The latest marketing campaigns initiated by the big guns clearly indicate just that. Now while Karlene makes it sound that all of this is actually something good happening, I would suggest to think again. To me the entire article actually sounds more like a marketing manual to be used for the near pet food future. If sales indeed increased in favor of the good guys, i.e. smaller, actually seriously health conscious pet food manufacturers actually providing good food, then there is nothing wrong and this trend has to be applauded. We can see some of that development happening at our store. And that’s good for the pets. But what scares me is when I hear the names she brings up. Because she makes it sound like the big players are on the track to doing something good. All I can do is to refer you once more to my comment about chemicals in pet food part 2: If Del Monte defines the ingredients of its Pep-eroni treats as healthy, then we have more than enough reason to be worried. That simply calls for a pessimistic view of the future. If Rachael Ray’s list of ingredients on her junk is considered to be good for our pets, then let’s pray. Because these and many other similar concerns I could bring up right here make me wonder: The next recall is not a question of “if” it happens, it’s a question of “when”. Phrases like human grade, nutraceuticals, dark fruits as anti oxidants, targeted premiumization, all sound to familiar and are a sure indication that the saga continues and nothing ever changes. And Ellen and Rachael will make it fly. Lets hope I am wrong. Rather than waiting to see what's going to happen, I for my part will continue to stick to my guns, tell interested pet owners what’s wrong with the pet food world and feed my pets what I have been feeding ever since we started the store: Real, healthy, natural pet food. That's why they are healthy and happy and have no indication of any disease whatsoever.