Store Brands

FEB 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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www.storebrands.info / February 2017 / Store Brands 5 9 Category Intelligence: Pet Care Products Top dog Premium natural products, stylish accessories could help unleash spending on store brand pet care items By Carolyn Schierhorn s with most other categories, millennials are having a tremendous impact on pet care products, including food, treats, chews, toys, outfits, accessories and related items. In its February 2016 report "Millennials as Pet Market Consumers," Rockville, Md.-based Packaged Facts identified 43 million pet owners among 18- to 34-year-olds in the United States — 31 percent of all pet owners in this country. Approximately 74 percent of millennial "pet parents," as the pet care industry likes to call them, own a dog, while nearly 50 percent own a cat, states the American Pet Products Association (APPA). A 2014 study by Arlington, Va.-based Wakefield Research revealed that 76 percent of millennials are more apt to "splurge" on their pets than on themselves, including on premium pet treats and fancy beds. "The humanization of pets is leading to an explo- sion of innovation in pet products," observes Mike Thomas, vice president of development for Dallas- based QT Dog, a supplier of private label natural dog treats, bowls and festive cravats. "It seems that if you make it for people, you can make it for pets." When shopping for pet products at supermar- kets, mass merchants, club stores and drugstores, consumers of all generations do look for value when purchasing store brands. But to grab market share from pet specialty stores and turn the pet aisle into a destination, retailers should develop a tier of standout premium own-brand offerings, advise the category's private label vendors. In the pet food subcategory — a $24 billion segment, according to the APPA — the leading trends mirror those in the human food industry, with consumers increasingly seeking healthful, natural, organic and limited-ingredient products. "All-natural, organic and USA-made are all major drivers for pet product developers," Thomas says. In addition, health-conscious consumers are looking for dietary supplements and products with wellness or functional benefits for their pets, says Chris Ruben, chief marketing officer for New Hamburg, Ontario-headquartered EuroCan Pet Products, who notes that his company has been manufacturing natural dog treats such as braided bull pizzels for 25 years. Consumables with character Pet food, treats and non-food consumable products hold particular promise for private branding, points out Heather Govea, vice president of private label for Bern, Kan.-based C.J. Foods Inc., a manufacturer of pet food and treats. "The pet consumable category is less mature than other private label [grocery] segments, which presents a great opportunity for retailers," she emphasizes. "The premiumization of pet food, for example, is an ongoing trend in the pet industry that is carrying over into private label." Having a top-tier line of own-brand food, treats, chews or even pet shampoo allows retailers to attain better margins than they can with national brand products. It also makes a statement about a retailer's concern for pet health and well-being. "While price points are still a driver within private label pet food programs, we are seeing that consumers can and will pay for a product they perceive to be 'better than,' " says Govea, noting that her firm manufactures grain-free, limited-ingredient and other premium pet foods. Similarly, Phoenix-based Leclerc Pet Care manufactures a full line of grain-free organic baked goods containing "all human-grade ingredients," says Lindsay Muzychenko, sales director for U.S. pet care at the company. "We also have launched a human-grade dog granola bar, which provides a great convenient, individually wrapped item that pet parents can take with them on trips, on hikes, etc." Single-ingredient items are actually more Do put more imagination into packaging and displays. Don't fail to recognize that some consumers will pay a premium for better quality.

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