What Retailers want from the Pet Food Industry

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What Retailers want from the Pet Food
Industry
Rick Rockhill Vice President, DMM PETCO Dog
Consumables

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My Best Friends

• Sheldon and Owen

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My Background

• Vice President, DMM, Dog Consumables
• 12 years in Pet Industry with PETCO
• Merchandising, Inventory Management Store
  Operations
• Established PETCOs Natural Food Standards
  Advisory Panel
• Advocate for Natural and Organic nutrition
• Prior retail experience
• Pet Care Superstores
• Lids Corp
• Fannie May Candy/Fanny Farmer Candy Inc.
• Macys New York

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About PETCO

• 2009 1000 stores in 50 states
• PETCO.com highest traffic pet retail site
• Primarily focused on premium pet specialty
  brands
• On-site adoptions of dogs cats
• PETCO Foundation raised over 49 million for
  shelters and animals in need
• Source Compete.com, August 2008

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Were Not Just Selling Pet Food
Were in the Relationship Business
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What Do We Know About Our Consumer?

• Emotional CONNECTION to pet
• Desire to NURTURE
• Willing to pay for a QUALITY product
• INGREDIENTS matter more than ever
• SAFETY is demanded
• Critical to earn maintain her TRUST

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What Does Our Consumer Want For Her Pet?

• Confidence food is safe
• Convenience
• Freshness
• Extend life
• Healthy digestion
• Functional foods
• Ability to Nurture Nourish
• Value for price paid

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How Does Our Consumer Choose A Pet Food?
She is faced with the largest-ever assortment of
pet food brands.

• Difficult to compare
• Confusing terminology
• Complicated ingredient decks
• Conflicting messages

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What Does Our Consumer Know About Us?

• She uses on a variety of sources to evaluate us
• Retail experience
• Whats on the Bag
• Veterinarian
• Breeder
• Shelter
• Friends/Family
• Internet

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How Does Our Consumer Learn About Pet Nutrition?

• Brand Retail websites
• In-store demonstrators
• Blogs Message Boards to research what regular
  people say
• Online customer reviews

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Pet Parents Trust Other Pet Parents
Popular among pet parents- both online and offline
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What Does Your Website Say About You?

• She wants to find information about
• Company personality
• Brand info
• Safety standards
• Ingredients
• Corporate citizenship
• Commitment to animals
• Where to buy

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Retailers Need Your Help To Educate Consumers

• Honest ingredients and formulas
• Clear product claims
• Avoid misleading terminology
• Partner on training materials
• Ethical in-store demonstrators
• No negative selling vs. other brands

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Six Things Retailers Need From You

• Know your target consumer
• How is your brand perceived?
• What is your brand position role?
• Know your competition
• What is your point of difference?
• Utilize syndicated data for trends
• Decide how to explain your formula
• Ingredients matter!
• Have a distinct marketing strategy
• Comprehensive, well funded, well developed plan
• Collaborative Planning
• Partner with retailer to customize tactics
• Understand differences in retail customer base

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Lessons from Trends
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A Natural Revolution or Evolution?

• What is causing the shift of pet food preferences
  to natural?
• Lifestyle choices partially explain the growth in
  natural foods
• Consumers are aligning purchase decisions for
  their pet with a shift toward greener and more
  holistic lifestyles in general
• Consumer believes natural organic foods are
  safer
• Simple easy to understand message
• Clean familiar ingredients in formulas
• Novel alternative proteins
• Small company images
• Similar product benefits to super-premium brands

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...PremiumSuper- PremiumRawDehydratedHolistic
NaturalOrganicGrain Free
What is next in the evolution of pet food?

• Source Packaged Facts Natural Pet Supermarket
  Pet department close up, August 2008

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History Shows Innovation Drives Growth

• Consumers embrace new technology when it offers
  obvious benefits, solves a problem or meets a
  need
• Hairball
• Large Small breed
• Sensitive Skin Stomach
• Indoor Cat
• Breed Specific formulas
• Allergy formulas
• More appealing form and flavors
• Our industry needs meaningful new advances in pet
  food technology

Each contributed to the revitalization of the
premium segment
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We Need To Standardize The Basics

• We are seeking industry standardization
• UPC placement on bags
• Date code placement and numbering system
• Canned food case packs
• (ie. Coke/Pepsi)
• AAFCO ingredient definitions
• By-products
• By-product meals
• Meals

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We Need to Reduce Mutual Costs

• We must partner to drive out unnecessary costs
• Assortment productivity
• Demand management
• Supply Chain
• Distribution
• Commodities Raw ingredients

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We Need to Be Environmentally Conscious

• We need to go green together
• Reduce
• Reuse
• Recycle
• Review packaging carton use
• Sustainable practices in plants, distribution
  corporate

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Twelve Things Retailers Want From You

• Well defined brands with a unique value
  proposition
• Product features clearly communicated
• Innovative formulas with meaningful benefits
• Made with high quality ingredients
• Tested for safety
• Designed to keep pets happy healthy
• Made with sustainable practices
• Packaged and shipped for freshness
• Well marketed to drive customers into the pet
  specialty channel
• Informative training materials, websites and
  resources for the consumer
• Made by a vendor partner that cares
• With a mutual goal to deliver better than average
  profits

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My Advice to the Pet Food Industry

• Innovate or Die
• Invest in new technology
• Get close to your consumer
• Resist temptation to be all things to all
• Never, ever compromise on quality
• Keep Pet Specialty Special
• Strong Independents are lifeblood

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Thank You!