How Pet Specialty Retailers are Investing in Private Label
Woof Gang Bakery’s private label brand was launched in spring 2014 to increase margins on some of the most popular items in-store.
Private label products—brands produced by manufacturers to be sold under the name of a supplier or retailer—have come a long way in recent years. Today’s private label products have evolved from their generic roots and now represent an opportunity for pet specialty retailers to stand out from the competition, increase consumer loyalty and take on the traditional big-name brands with their own lines of exclusive products.
Millennial consumers are a driving force behind the recent success of private label products, largely because they are less brand conscious than older generations have been and make their purchasing decisions based not only on the perceived quality of a product, but also on its price.
With millennials now spending approximately $600 billion each year in the U.S., retailers are shifting their focus to target this key demographic.
So what impact has the private label trend had on the pet industry? According to the 2016 Private Label Yearbook from the Private Label Manufacturers Association (PLMA), private brands are performing well.
The report combines annual sales for more than 700 product categories in major retail outlets throughout the U.S., including supermarkets, drug stores and mass merchandisers.
PLMA’s analysis of sales data for 2015 places private label pet care products at No. 17 in a list of the top 20 private label categories by dollar volume sold at drug stores. The figures show a dollar volume of $78.3 million—44.4 percent of the $176.2 million category total.
Private label pet food was also a top performer over the same period, placing at No. 19 in a list of the top 20 private label categories by dollar volume in all outlets combined. Private label dollar volume for pet food reached $1.7 billion—an 11.8 percent share of the $14.3 billion total for the category.
PLMA’s statistics show that private label pet products command a significant portion of overall sales for major retail outlets. And with the trend set to continue, an increasing number of independent pet specialty chains are taking note.
To find out more about the private label trend, Pet Product News spoke to three pet specialty retailers that offer their own private label product ranges.
Pet Supplies Plus
Pet Supplies Plus is the fourth-largest pet retailer in the U.S., with 375 stores. The company, which has headquarters in Livonia, Mich., offers a wide range of private label products across all departments in its stores. These include everything from dog food to cat toys and aquarium décor.
Private label products play an integral role in the ethos of the company.
“We measure success not only through sales, but through happy neighbors and pets,” said Erika Klein, Pet Supplies Plus’ private label manager. “We have a lot of those, so private label plays a big role in our measured success.”
Pet Supplies Plus is committed to the research and development of its private brand, working with manufacturers in the U.S. and abroad to carefully design products that differentiate the stores from their competitors and delight customers, Klein said. Emphasis is placed on safety and quality, at a price point that makes sense for the consumer.
When promoting its private label products, Pet Supplies Plus “considers our field employees our biggest assets,” Klein added.
This straightforward approach centers around educating staff on the range, and encouraging them to share the benefits of the products with customers.
Pet Supplies Plus’ private label products have been well received by consumers, according to the company. Bestselling items include everyday basics such as PS+ tennis balls and rawhide chews for dogs. High-quality puppy pads that feature absorption properties found in human-grade sanitation products are also a popular purchase, Klein noted.
Woof Gang Bakery
Woof Gang Bakery has 81 stores, and it is the 11th largest pet retailer in U.S., with headquarters in Orlando, Fla.
The company’s private label brand was launched in spring 2014 to increase margins on some of the most popular items in-store.
“The goal was to take everyday items that sell in our stores and add the Woof Gang Bakery name, which would elevate the products and make them exclusive,” said CEO Paul Allen. “We focus on items like bully sticks, antlers, and additional bones and chews. Our pink treat bags were a redesign of a product we were already selling.”
The private label program has been a central part of Woof Gang Bakery stores since its launch. The products are promoted with unique merchandising concepts that are reflected in every store. These concerns are among the company’s key marketing materials, and stand for the quality and value that customers can expect from Woof Gang Bakery stores, Allen said.
The company’s private label range is the end result of a thorough research process that took into account factors such as branding, quality, variety and analysis of the products already popular with customers, Allen added.
To promote its private brand, Woof Gang Bakery has invested in sample treat bags, which are distributed to local businesses and apartment complexes, encouraging people to visit their local store. In addition, all Woof Gang Bakery locations give out “free treats for a year” to the first 20 dogs at a store grand opening.
Healthy Spot is a growing chain of specialty pet stores in Southern California. The company currently has 10 stores, with another one set to open later this year.
Healthy Spot offers several lines of private label products, including healthful chew treats, eco-friendly pet bedding, eco-friendly pet waste bags, as well as fun items such as toy glow balls and pet apparel.
The products play a small but important role in the overall success of the business.
“Private label helps us close the gap where there may be a lack of innovation,” said Mark Boonnark, co-founder of Healthy Spot. “It also helps us provide additional fun ways to interact with our customer base, as there is a trust and demand for products under our brand.”
The company sees private label as an opportunity to differentiate itself from the competition by creating innovative new products that match customer demands and preferences. Boonnark identifies the research and development phase of creating private label products as in keeping with the company’s core values.
“With our mission to inspire healthy pet lifestyles, we pride ourselves in sourcing the highest-quality products with brands that share the same ethics and business values,” he said. “This is no different from our private label strategy. If we are putting our name on it, you can trust that integrity will be first and foremost and that the bar for quality standards will be set very high.”
Healthy Spot is developing new private label lines to release in the coming months. Currently, the most popular private label products in store are the baked and triple-washed bully sticks, designed to eliminate unwanted odor, Boonnark said.