Pet food may not deliver a huge chunk of your store's sales, but demand for the category remains strong. Rich Airey reports
So it's not the most glamorous category in a store, but when it's worth more than £27.5m a year to the c-store sector, who can afford to ignore it? It brings in customers and is enjoying 5% year-on-year growth in convenience. Pet food profits, it seems, are there for the taking.
One person who believes pet food can be a lucrative category in the convenience sector is Susie Ackland, trade marketing executive at Masterfoods, which manufactures the Pedigree and Whiskas brands. She points out: "The category is in excellent health and offers retailers huge profit potential. Snacks and treats are driving growth in particular. They are a growing impulse purchase and are often overlooked by retailers who are unaware of the difference they can make to their sales."
Stocking the right pet food range is the challenge for c-store retailers. Figures from Research International suggests a typical c-store could increase sales by more than £21,000 a year by stocking the right range.
Ackland recommends retailers stock the top-selling lines to make the most of pet food shoppers and advises retailers look at multipacks. "Multipack purchases continue to grow year on year as an increasing number of pet owners turn to
c-stores for their pet care purchases," she says. "If retailers want to satisfy their customers' needs and encourage multi-purchase, they should stock a range of varieties and sizes of top-selling multipacks. By stocking the right range, retailers can turn many pet owners in their area into loyal customers."
To help retailers, Masterfoods last year launched its Easy 4 You merchandising advice. It aims to make selecting the right range easier for c-store retailers and brings together 19 of the pet food category's best-selling lines in an easy-to-shop cash and carry fixture. Masterfoods bosses are confident the fixture will help those retailers who struggle to provide a profitable pet food fixture in a store with limited space.
Another company that's looking to help c-store retailers increase their 8% share of the total pet food market is Butcher's Pet Care. Brand manager Alison Cockcroft says: "Retailers should focus their attention on the top three performing brands within each category. This ensures variety and choice and will create sustained sales and loyalty. Retailers need to make sure their offering reflects consumer demand."
Butcher's has the top two branded foil tray lines in multiples (Source IRI total grocery, December 2006) and Cockcroft says the company is aiming to achieve the same result in the c-store sector. The company is also expecting a strong performance from its new Olli single-serve cat food and hopes to drive its share of both the single-serve and dry complete sub- categories in 2007.
According to Cockcroft, premium products are driving sales in all formats, but especially in pouches and cans. She explains: "An underlying trend has been the growth of super-premium products, in particular Cesar Pouch and Pedigree Select Cuts. Another trend is the move towards lifestage products. Both of these trends mean the market is becoming increasingly segmented. In response to this we have launched a puppy foil tray 4x150g multipack."
Cockcroft believes the 'premiumisation' of branded lines will continue and even predicts a demand for organic pet food. The company is getting in quick on the trend and last month launched what it says is the first branded organic pet food range under the Butcher's name.
"The growth of organics in other sectors is set to be replicated in the pet food market," Cockcroft affirms.
Butcher's Pet Care is planning to support all of its brands with coverage in both national and regional press, as well as broadcast media. Cockcroft adds: "Our media spend is targeted at bringing the Butcher's and Olli brands to life for the consumer and to front of shoppers' minds when purchasing."
Further evidence of growth in the premium pet food market can be seen through the successful launch of Nestlé Purina's single-serve tray Felix Jelly Specialities in July 2006. The brand's 12x100g pouches are also helping to drive growth in the category.
Sco-Fro Foods, a new player in the pet food market, believes its launch into the premium market comes at just the right time. Better known for manufacturing noodles, sauces and seafood, the company launched the Top Dog and Posh Cat ranges for the independent trade through wholesalers, cash and carry and symbol groups.
Posh Cat is a complete, enhanced food for cats with an anti-hairball function. It comes in three variants and also contains vitamin A and taurine. Top Dog is a range of four dog treats with a rrp of 99p.
Sco-Fro pet food division managing director Sonja Steward says: "The launch timing of Top Dog and Posh Cat couldn't be better for us. Consumers are starting to be
as concerned for the health of their pets as they are for their own well-being. We have worked with a number of organisations who are involved in the care and wellbeing of pets, to come up with a product that's not only good for animals
but that's also tasty and appealing to them."
Elsewhere, complete dry sector specialist Wagg has unveiled new packaging across its entire range and launched two new dog food products - puppy and control.
Director Tom Page recommends retailers keep their eyes on the dry food market. "The complete dry dog food market is continuing to outperform other sectors and we have recently seen a significant amount of growth in value," he says. "There is a continuing trend of polarisation in the growth areas of complete dry dog food. Value brands and super premium brands are both performing extremely well, whereas the middle market is proving to be difficult to crack. This is essentially due to the fact that there are a number of strong brands dominating the middle market. The future of the dry dog food market looks strong with excellent continued growth."
Wagg completed its packaging makeover with a new look for its small animals products, a product area that retailers may be overlooking. The new design features clear photography against a background of eye-catching colours.
Page adds: "Our new small animal packaging continues to place emphasis on the healthy qualities and value of Wagg's food products.
"2006 was an exciting year for Wagg, as we introduced new products and launched our second TV advertising campaign. This new packaging launches us into 2007 and hopefully another successful year."
Supreme Petfoods is also urging c-store retailers not to forget the little critters when it comes to compiling their pet food fixture and the manufacturer is planning to support retailers in building seasonal opportunities for specialist pet food. Marketing director Alan Walmsley says: "The grocery trade gets great results from themed, seasonal initiatives. Consumers don't change their habits just because they are buying for their pets. In fact, because of the emotional investment involved, brand values and support are even more important."
Supreme's retailer support initiative includes presentations which will outline a selection of product combinations for maximum shelf sales. Pos material and promotional activity is also planned and Supreme retailer support packs will offer further advice for retailers looking to boost sales.
The company is also launching a series of new price points. Although this means that in some circumstances prices will rise, says Walmsley, it will also contribute to the better margins that Supreme intends to bring to retailers throughout the coming year.
Innovation - 15% of snacks and treats category sales come from new lines
Premiumisation - volume is up 4% in a market growing at 10% in value
Following other food trends, dental and health show the greatest growth across dog snacks and treats
Communication of words including 'free-from', 'added', 'low-fat', 'promotes', 'maintains' and 'vitamins' is driving purchase.
Atul Sodha, Londis store, Harefield, Middlesex: "Pet food is one of those categories customers expect to find in a c-store. Regardless of what retailers think of the category, it's one that a large number of shoppers want and need. People always find money to feed their pets. They will buy both branded and own label products, but it's the big brands that drive sales so I stock about 85% of branded products.
"I have two 1.2m shelves which contain about 20 lines. Products that have sold very well for me recently are both Whiskas and Felix cat food pouches. Like any category, it's important to look at your average weekly sales so you don't miss any tricks. I think it's also worth keeping an eye on which products are being advertised on television.
"I also stock a few treat products, but it's important not to overcrowd the shelves. You need to merchandise the category well so it doesn't look messy and overflow with different lines.
"I have a few customers who always go for the same product, so I make sure that I always have a few multipacks of the pet food that they are after."
MASTERFOODS recently launched Perfect Fit - its first new pet food brand for 23 years. The range consists of five variants: Active, In-home, Sensitive, Senior and Junior. Its clear and modern packaging is aimed at creating strong shelf standout. The range has been given a £4m marketing investment.
PEDIGREE is extending its can and pouch portfolio with a range of nutritionally balanced premium dog foods. Pedigree Better By Nature will be backed by £8.7m-worth of marketing support including TV and press advertising.
The new Better By Nature can was previously available as Simply Select Cuts and comes in five flavours. The pouch variant is available in an extra three flavours. They are available from the end of March.
PETS CHOICE has launched a new range of cat treats. Webbox Cats Delight cat sticks are available in beef & rabbit, salmon & trout, chicken & liver and turkey & lamb. The treats are sold as single sticks in packs of six, with cases containing 25 packs. Each pack has a rrp of 99p.
recently introduced a new treat range for cats and dogs. Omega-dent is made from pure fish with parsley and mint to boost its breath-freshening effects.
The crunchy treat also has a texture designed to keep teeth clean. It is available in fresh-zip seal 100g packs for dogs and 50g packs for cats.
The range also includes Omega-dent plus - pure fish flakes with herbs to sprinkle on food. Rrps from £1.99.
The female of the species...
Research from Mintel shows that women have a more indulgent side when it comes to the family pet. While just one in 10 men likes to buy gifts for their pet at Christmas or for birthdays, as many as one in five women do so. The research also suggests that 33% of men view their pet as part of the family, compared with 38% of women.
Source: Mintel pet food and pet care
Pet food shoppers' habits
? On average, pet food shoppers spend only 80% of what they intended to in convenience stores
? Two-thirds of all these failed purchases are due to poor availability
? More than 50% of shoppers will not return after being let down by availability twice
? Pet food shoppers spend more than £2,000 a year in c-stores - that's more than buyers of bread, milk, soft drinks, confectionery, newspapers and crisps
? In a week, the average pet food shopper spends £23.69 in the convenience sector, while the average shopper spends only £18.35
Source: HIM CTP 2006 and Masterfoods.