In convenience stores, pet owners are very important customers because they spend 30% more per week than non-pet owners. The statistic comes from him! and the reasoning behind it is that if you have a pet then you’re usually in a bigger household with a bigger family and therefore are spending more.
It’s a similar story in the cash and carry/wholesale sector where him! research has found that retailers buying pet food visit a depot more than three times a week, which highlights the high demand in their stores for pet food products.
In retail, petfood owners intend to spend Â£9 during their visit to a c-store but only actually end up spending Â£7.18 because they can’t find what they want. Again that trend is mirrored in wholesale with petfood-buying retailers intending to spend more per visit than they actually do. Figures from him! reveal that depots receive less than 60% of their customers’ intended petfood spend because many of them cannot find the products they want. They arrive intending to spend Â£85 specifically on petfood but, on average, leave the depot only having spent Â£50 on petfood. Out-of-stocks is the main reason for these failed purchases.
On top of all this, him! also found that only one in three cash and carry customers buying petfood noticed a petfood promotion. This highlights an opportunity for suppliers and operators to improve awareness and communication of promotions in the depot.
None of this comes as much of a surprise to Batleys’ operations director Martin Race. The cash and carry chain does very well on petfood, indeed 16 of its 18 depots have special petfood departments and the reason there are two that don’t is only down to lack of space. Much of the product is sold to the independent petfood specialists.
Race says that unfortunately the c-store sector has been slow to catch onto the profits that can be made from petfood. “Petcare and petfood are not perceived as important enough categories in c-stores and to date there’s not been much information around to persuade retailers otherwise. Petfood is quite a lucrative business but it can be difficult to get it right. There’s a big top-up opportunity for c-stores to cash in on but they’ve been slow to catch on. Take pouches, for instance. They sell very well in the superstores but distribution through the c-sector is very low.”
Race says there’s hope on the horizon because “petfood suppliers are beginning to recognise the importance of c-stores at long last”.
It is Masterfoods which is at the forefront of this progress with its new Easy 4 You category initiative for wholesalers.
Masterfoods’ trading director for the convenience sector, Trevor West, explains: “The Â£1.4bn petfood market offers a massive profit opportunity to wholesalers and retailers, however opportunities are being missed when customers come in to stock up on petfood. Simplifying and reducing the number of lines at fixture will benefit both wholesalers and their shoppers.”
That’s exactly what Easy 4 You does â it whittles down the petfood category to just 19 lines. These 19 petfoods are not the top sellers but rather constitute an optimum range for a half metre bay.
West is keen to stress that Easy 4 You is a category initiative not just a Masterfoods initiative. “The launch of Easy 4 You follows work we did with Costcutter when Masterfoods worked out a recommended petfood range for 500 of their stores. Having developed the range the key for us was to communicate it across the trade.”
This communication started with briefings to wholesalers last December, where West says it was warmly received. That’s been followed by a leaflet drop to retailers, extensive use of point of purchase information in-depot and the launch of a website â www.easy4you.com.
In-depot, Easy 4 You comprises two bays that are separate from the rest of the petfood aisle. Masterfood’s chosen 19 lines are only situated in the Easy 4 You section â they can’t be found elsewhere in the cash and carry.
“The idea is for retailers to have the 19 lines as a starter then build on that range,” says West.
He’s well aware however that there are some big obstacles to overcome. The single-serve pouch is the main one. Launched first in cat food, pouches were billed as convenient and hygienic and meant owners could feed their cat a different flavour at every mealtime. Owners loved the idea â pouches now account for 60% of all cat food sales â and supermarkets were swift to catch on but c-stores dragged their heels and are still dragging them.
Sales of single serve cat products grew by 8.8% last year to Â£25m so there’s obviously a market for them. “Pet owners prefer pouches as they’re easy to use, convenient and provide a fresh meal every time,” confirms West.
More and more pet owners are trading up to multipacks, particularly of pouch cat food, where 12 packs are the fastest sellers. West says: “C-stores have been slow to stock multipacks too as they seem to think that their customers won’t spend Â£3.19 on a 12-pack of catfood, but they will.”
The treats category is another profit earner that the experts say c-stores are missing out on. West says: “Treats are very profitable â they’re an impulse purchase so they’re always incremental business. Many dog owners prefer to buy treats at their local shop, however some convenience stores have not yet taken up this opportunity to gain incremental impulse sales.”
One of the newest treat lines on the market comes from Bakers Complete, the complete dry dog food brand from Nestlé Purina. The launch was inspired by the fact that Nestlé Purina’s research found that 54% of shoppers want to purchase the same brand for their dog’s main meal and treats.
Bakers Meaty Treats consists of eight treats, biscuits and chews that combine meaty taste, texture, smell and visual appeal.
The launch is supported by a Â£1m investment package, which includes a dedicated TV ad campaign in August, a new-look website and cross sell on Bakers main meals.
Meanwhile the growth in cat treat sales has been driven by the introduction of products such as Felix Hairball Fix which, although a treat, also reduces the common hairball problem. Unlike dog owners, cat owners need a reason to treat their pets, as they don’t generally treat them for good behaviour or fun. Nestlé Purina reports that providing a treat that also has functional properties has given the sector a real boost.
Convenient packaging, healthy options and lifestage products will be the key drivers of growth in 2005.
Katie Chavush, Nestlé Purina’s customer marketing manager for the convenience channel explains: “The rise in the number of people who want to eat healthily is having a significant impact on the petfood market, with healthy options for both cats and dogs becoming a major feature in most product ranges.
“In addition, today’s consumer is keen to look for a lifestyle solution that is relevant to their pet’s requirements, for example: kitten, adult, senior and sensitive. Finally, and again tapping into the âyou are what you eat’ ethos, pet owners are increasingly seeking pet food that looks similar to what they might prepare for themselves, satisfying the feel good factor.”
The future of the petfood market certainly looks rosy for wholesalers, not least of all because of the time and money manufacturers are putting into managing the category in the sector. Masterfoods is not the only one to be supporting wholesalers. Nestlé Purina says it always endeavours to provide a smaller case size for the cash and carry sector and it has promotions tailored to meet the sector’s specific needs.
Retail giant Asda was the principal sponsor of National Pet Week 2005 which took place in May. Such is the UK’s love of its pets that other charity events are popping up all the time.
Butcher’s Pet Care, for instance, is launching a new initiative with the RSPCA, designed to raise cash and promote fitness.
The Mutt Strutt will be held at re-homing centres across the UK, with thousands of people taking part in sponsored dog walks in aid of their local RSPCA.
Butcher’s is sponsoring fundraising packs and every participant will receive a Butcher’s dog toy and a money-off coupon to encourage trial of the brand.
Butcher’s marketing controller for UK and Europe, David Costello, comments: “This is an opportunity for Butcher’s to reach thousands of dog owners and raise money for a great cause.”
Butcher’s has a two-year association with the RSPCA, which includes the Mutt Strutt, sponsorship of their re-homing packs and food drops to local centres.
Meanwhile the petfood company is hoping to smash the Guinness World Record for the biggest ever dog walk via its Butcher’s Great North Dog Walk.
More than 5,000 dogs joined in last year, representing 131 breeds, which was enough to make a new world record. Now, in the face of stiff competition from America, the challenge is to keep the title in the UK.
Brian Porter, Nisaway category controller
The petfood market continues to grow, driven specifically by dry cat and dog food. There is a slight decline in sales of the cheaper brands and a growth in more expensive premium food. This is probably a result of the consumer advertising, which suggests more expensive brands are better for the well-being of their pets.
The packaging and advertising of today’s petfood is moving towards consumer emotions. The petfood is portrayed as being an integral part of loving your pet and vital in the dog/cats well-being and overall health. This is a move which will increase sales of the super premium products.
Jeanette Richens, petfood buyer, AF Blakemore
Our best sellers are cans â Pedigree 400g for dogs and Whiskas 400g for cats; and we sell more dog food than cat food. Our pet range is basically Pedigree, Nestlé Purina and Butcher’s and we concentrate on cat and dog food although we do have a very small range of fish and budgie food. Landmark does an own label cat litter and some own label dog meal and mixer so we stock that too.
We’ve chosen Pedigree as our category partner and are trialling its Easy 4 You programme in our biggest three depots. We have the products in two bays in the depot with the special branding and signage to help the retailer find what they want. It’s early days but sales are already up 22%.
Cans are still a very important part of our business. To be honest we’ve found it difficult to get retailers to pick up the pouches but Pedigree and Nestlé Purina have been heavily promoting them so hopefully they will.
Nestlé Purina’s top 10 merchandising tips for cash and carries
Clearly separate cat and dog food and make sure that different types of petfood are well segmented
Place premium products at an easy-to-reach level
Brand block products for quick shopper recognition
Place larger packs on the bottom shelves
Stock the best selling ranges across cats and dogs
Concentrate on brand leaders
Ensure that products are well stocked â consumers are very brand loyal and will not hesitate to shop elsewhere
Use POS to highlight new products and promotions
Use clear shelf edge labels to make identifying products as easy as possible
Review your range every six months