What Impact Will COVID-19 Have on Made in the USA Pet Product Sales?
Manufacturers discuss the pandemic's impact on the category and explain the benefits and challenges to producing products domestically.
Manufactuer Roundtable Participants
• Adam Baker, president and founder of pet toy manufacturer SodaPup in Boulder, Colo.
• Janie Smyser, owner of Abbottstown, Pa.-based K9 Granola Factory, which manufactures dog treats, supplements, candles and more
• Jerry Moffett, vice president of sales and marketing for dog toy manufacturer Ruff Dawg, a division of Jefferson Rubber Works, in Worcester, Mass.
• Melissa Olson, vice president of sales and marketing for Green Bay, Wis-based Vital Essentials, which manufactures raw dog and cat food, treats and snacks
PPN: How do you think COVID-19 will affect the made in USA pet products category moving forward?
Adam Baker: I think there are two ways that COVID-19 impacts demand for USA-made products.
First, since COVID-19 originated in Wuhan, China, there is growing suspicion surrounding the Chinese government. Did they create the virus in a lab as a weapon? Did they respond quickly enough to protect their own population? Did they keep the spread of the virus hidden, leading to a far worse disaster? It’s hard to know what is real, what is politics and what is a conspiracy theory, but all of it leads to growing uneasiness about working with China (for businesses) and buying China-made products (for consumers). I think this discomfort will lead consumers to buy American-made products more often.
Secondly, COVID-19 led to major disruptions in the China supply chain. This revealed a major vulnerability for American businesses that were scrambling for a supply of goods. I believe that many businesses are rethinking their overseas sourcing strategy in light of COVID-19 and the potential for other global pandemics in the future. As a result, we will see many companies shift a portion of their manufacturing back to the states so that they are prepared for such events in the future.
At SodaPup, we didn’t experience any supply chain disruption at all. Since we are 100 percent American made, we’ve been able to continue shipping products throughout the global pandemic. All of our manufacturing partners are classified as essential, so for us it has been business as usual.
Smyser: I believe there will be a stronger impetus toward buying USA whenever possible, particularly in the treat, food and nutrition category. COVID-19 has made consumers even more acutely aware of the importance of having and supporting USA manufacturing. The fear born out of this recent pandemic is that we are unable to support ourselves and those we love, including our pets, by being dependent on foreign manufacturing sources. The growing sense of “country first” may be with us for the foreseeable future.
Jerry Moffett: With pet adoptions on the rise right now, food, treats and hard goods for pets should continue to remain strong, especially online sales. As for discretionary items, value will be even more important as time goes on and the country recovers from the current crisis. We have a rare opportunity now to reach a big group of first-time pet owners—it’s our challenge to inform them as soon and as persuasively as possible why made in the USA products are important and of value for them! If we can do that, we will be setting ourselves up for the success and growth we have come to expect.
Melissa Olson: We believe the impacts of COVID-19 will only increase the level of importance among pet parents seeking food and treats that are made in the USA and/or where ingredients are USA sourced. With the economy slowdown, Americans will want to support USA companies and will purposely purchase products clearly labeled “USA made.” There may also be lingering health concerns over purchasing products that are imported and whether the ingredients, product or even the packaging is safe to handle or serve to their pets.
PPN: What are the benefits and challenges to making products in the U.S.?
Baker: There are many benefits to making products in the USA. First, there is simply the pride of creating jobs in the communities where we live and operate. Maybe it sounds silly, but I wake up each morning feeling good about the contribution we’re making to our community. This intrinsic value adds to my quality of life.
The second benefit is that American-made is what consumers want, so our business continues to grow because what we do matters to our consumers.
Thirdly, domestic manufacturing streamlines and shortens the product creation timeline. There are no two-week product development trips to Asia. There are no time differences and no language barriers. More important, you save trans-oceanic transportation time. This allows you to buy inventory closer to the market so buying decisions are more educated with up-to-date forecasting information. It allows us to build to order quickly. It means we don’t have to fill an entire container before shipping. It allows us to chase demand rather than stocking up on inventory, and then marking down excess—which allows us to maintain full price longer, which helps preserve brand integrity and benefits our retail partners.
Having said that, there are also barriers to working in the USA, which vary depending upon product type. We specialize in molded products, so the biggest obstacle is overcoming the high cost of molds. You need to sell a lot of volume quickly to overcome the initial mold costs. The second barrier is U.S. labor costs. For product types that have a lot of manual labor like sewing plush toys, using a U.S. labor force could be very challenging. For molded products like ours, however, the process is highly automated, so we are able to contain labor costs.
Smyser: Manufacturing capabilities, ingredient sourcing and cost are basic challenges to producing products that are completely sourced and made in the USA. For example, coconut oil and bananas … Obviously, they are not readily grown in the U.S. and need to be sourced elsewhere. Nutritionals required to be included in ingredient panels may not be readily available in the U.S. And the cost of manufacturing needs to be figured into the overall consumer price. People simply may need to be willing to pay more for made in the USA.
The benefits are many. Self-sustaining industries create more opportunity. Consumer confidence, particularly after the panic of COVID-19, is priceless.
Moffett: The challenges have always only been about cost. I think finally now a much larger swath of Americans is questioning where their products are coming from, who is employed to create these products, and whether these workers are being paid a living wage and treated ethically. The benefits of making products in the USA are becoming more and more important: job creation and retention, product safety, and the speed at which we can pivot to improve and create new products and get them to market without the uncertainty of tariffs, shipping delays or quality issues.
Olson: Being based in Green Bay, Wis., has been a huge benefit for sourcing and distribution. Since we’re centrally located, we have easy access to many protein suppliers who are also located in the upper Midwest. Our custom sourcing program requires initial and annual inspections of our suppliers to certify they are meeting our standards. Additionally, distribution throughout the U.S. to our distributors is efficient, which gets our product to market faster.
PPN: What are the latest USA-made products you have released?
Baker: We are constantly introducing new rubber, TPE [thermoplastic elastomer] and nylon toys. Our most recent new nylon product introduction is the Rocket Chew Toy, which is a part of our Spotnik collection. This collection is a tongue-in-cheek celebration of dogs in space, inspired by the Russian Sputnik satellite that launched Laika the dog into space back during the Cold War.
For TPE, we just completed our Wag! Ball. Because we specialize in the super chewer market, this ball is a 3-in.-diameter solid TPE ball. It is very durable and has the added benefit of floating. It also has really fun graphics with Buddy the Dog on one side and the expression “WAG!” on the back.
In our rubber category, we recently completed the Space Capsule design, which is also a part of our Spotnik Collection. This is a durable natural rubber treat dispenser and chew toy in the shape of the Apollo 13 space capsule. It’s a great way to keep your dog occupied during the long days of quarantine!
Smyser: At the recent Global Pet Expo in Orlando, Fla., K9 Granola Factory was excited to be awarded second place in the New Products Showcase for the launch of the Donut Shop for Dogs. We’ve expanded our line of delicious Gourmet Doggy Donuts to include new Donut Holes, Mini Donuts, Long Johns and Old Fashioned Chew Sticks in delicious donut shop flavors. They are custom baked fresh daily in our own bakery, and we use only human-grade ingredients.
“They look good enough to eat” was the comment we heard repeatedly at Global Pet Expo. And of course, our response was: “You could!”
Moffett: This year we introduced our Indestructible Dawg-Buster in two sizes. The extra large is one of the largest and toughest dog toys ever manufactured. Retailers can expect more indestructible toys to come from Ruff Dawg in the future!
Olson: Vital Essentials Freeze-Dried Hemp Chews for dogs are among the most recent products launched. Not only do we source our protein from USA suppliers, we source our hemp oil from a Wisconsin-based company. The hemp plants are grown in Wisconsin and the oil extracted and tested just 45 miles away from our manufacturing facilities. We have three custom terpene hemp oil formulations that are blended into our 100 percent beef chews to address specific health issues faced. The three formulations include Relax, Relief and Revive. You can find more information about the products at veraw.com.