Posted: September 26, 2013, 4:35 p.m. EDT
By Kathleen M. Mangan
Today’s natural treat market is marked by various claims and philosophies, seemingly infinite segmentation and novel ingredients, such as kangaroo, chia seeds, hemp seed oil and pomegranate, and the sector’s growth profile is spurred by two consumer-driven reasons.
"Pet owners are more educated and want to buy more healthful products, and they’re buying more treats as the economy recovers,” said Bob Vetere, president of the American Pet Products Association. "Treat manufacturers are trying to meet this demand and differentiate their offerings.”
"Our research illustrates there are numerous variables that a pet parent takes into consideration when making their food and treat buying decisions,” said Timothy Fabits, vice president of Long Beach, Calif.-based Redbarn Pet Products Inc. "The all-natural, grain-free aspect has resonated strongly within these categories, as more and more pet parents are seeking products that fall within the premium category.”
Julia O’Kelley, licensed animal nutritionist and co-owner of Sedona Pet Supply in Sedona, Ariz., said her customers are always asking about the newest products, so she recently brought in six additional natural treat lines. Her biggest treat sellers are USA-made jerky, fishy treats and freeze-dried raw salmon for cats. She’s seen huge increases in grain-free and jerky treat sales, and growth in weight management and mini treats.
Consumers educated about pet nutrition seek healthful treats for their pets. Petropolis
Terri Grow, owner of PetSage in Alexandria, Va., devotes an entire room to natural treats, strategically located so customers must walk through it on their way to and from the food room to encourage impulse buying. One wall features grain-free and meat treats, while the other wall features biscuits (with barley and oats; not wheat, corn or soy) and freezers with frozen bones and yogurts. She said at least one bag of treats is part of every sale.
When choosing stock, Grow looks at trusted brands, ingredient sourcing, the philosophy behind the product, where it’s made, the packaging, and the care and precautions the manufacturer takes. She said the customer’s decision comes down to palatability to the pet, the health benefits and the price point.
She encourages treat protein rotation to help prevent intolerances.
"I’m skeptical of new treat products,” said Tazz Latifi, owner of Petropolis in New York, who’s working on her animal nutritionist license. "The industry is inundated with little companies, and they all claim their products are natural, but that doesn’t mean they’re healthy or appropriate for every pet.”
Latifi promotes organic, USA-sourced meat treats, especially for poultry, to avoid antibiotics and hormones.
"I like simple treats with limited ingredients from trustworthy companies,” she said.
To offset the higher price, she tells clients to give better-quality treats in less quantity.
New Product Demand
New products drive pet owner interest, said David DeLorenzo, president of Dallas-based Vetscience, maker of Fruitables Pet Food.
"Innovation that is meaningful is an advantage for brands,” he said.
New to the company’s Skinny Minis Soft & Chewy Dog Treats line are Rotisserie Chicken and Grilled Bison flavors combined with pumpkin or sweet potato in a low-calorie treat.
But massive product variety can overwhelm consumers, said Chris Meiering, director of marketing at Zuke’s in Durango, Colo.
"It takes away from the consumer’s ability to become loyal to a brand,” he said.
His company encourages retailers to build a brand block for Zuke’s to enhance consumer recognition and decision-making. He points to a research study showing that when at least nine Zuke’s SKUs are presented, they all do better than just four.
Zuke’s offers natural semimoist, jerky and biscuit treats, some with supplements for joint and urinary tract support. Just launching is the Skinny Bakes line of low-calorie, crunchy treats. The company is also adding Duck and Roasted Pork flavors to its Mini Naturals line of low-calorie, semimoist training treats.
The biggest trend in natural treats is the grain-free segment, according to O’Kelley, who has seen sales of these products quadruple in the past seven years.
Grow said they’re her biggest sellers, too, but she thinks there’s a misconception in the industry because often manufacturers are trading grains for potato, sweet potato and tapioca.
"They’re still carbohydrates,” she said.
It’s in the Numbers, Naturally
Natural dog and cat treats are taking over a larger part of the treat segment, according to the American Pet Products Association’s 2013-2014 National Pet Owners Survey.
A breakdown of dog treat sales from 2010 to 2012 shows big gains in natural treats from 23 to 30 percent of all dog treat sales. There was also a gain in supplement-fortified treats from 11 to 15 percent. The biggest sales losses in the same two-year period were meat treats from 67 to 52 percent (although these are still the biggest seller in the dog treat category), and nonmeat treats from 38 to 27 percent.
In cat treats, a breakdown of sales over the same period reveals natural treats accounted for 21 percent of sales in 2012, with supplement-fortified treats up from 12 to 14 percent, and weight control treats up from 2 to 4 percent. The biggest cat treat sales losses from 2010 to 2012 were meat treats, cut in half from 65 to 33 percent; non-meat treats, down from 15 to 12 percent; and organic treats, down from 17 to 5 percent.
The rise in natural pet treats as a percentage of the overall treat category is even more significant, considering that more pet owners are purchasing treats in general. In 2012, 93 percent of dog owners purchased treats, up 12 percent in the past 10 years, while 73 percent of cat owners purchased treats, up 17 percent over the past 10 years, according to the APPA study.
How many owners are buying natural and organic treats? Research by Packaged Facts shows the numbers as 12 percent of dog owners and 6 percent of cat owners in 2012, according to its recent Natural, Organic and Eco-Friendly Pet Products in the U.S. report. -KM
Jerky and freeze-dried meat treats fall into the grain-free category. Grow said she’s a big advocate of pure meat treats for cats, as they don’t require carbohydrates.
"Cats love freeze-dried raw fish and meat,” she said, adding that there are more treats available for cats now, including some soft chews, such as Zuke’s G-Zees with glucosamine and Natural Purrz with cranberries.
"The cat market is quickly catching up to the dog market,” said John Gigliotti, CEO of Whole Life Pet Products in Pittsfield, Mass. "Historically, cat owners wanted healthy treats, but there were so few options that cats would eat.”
His company offers eight freeze-dried meat and fish treats for cats.
Novel Protein Trend
Novel and single-protein treats are other trends that have gained traction due to pet owners’ perception of growing food intolerances and allergies among pets. Notable new products include dehydrated haddock pressed into small heart shapes and sold as Quickies for dogs and Smittens for cats by The Honest Kitchen of San Diego.
Lucy Postins, CEO, said she expects to see further evolution of pure meat treats and novel proteins, so long as the protein source is humanely raised, line caught or from sustainable sources. For instance, she’s working to import dehydrated llama meat to support a Bolivian charity. She also sells dehydrated haddock fillets (Wishes), dehydrated Icelandic catfish skins (Beams), low-calorie biscuits and training treats with antioxidants.
Raw meat in freeze-dried and frozen treats is gaining in popularity, according to retailers. One new offering is raw frozen ground bones in the Pro-Treat line from Stewart Pet of Dayton, Ohio. Made of meaty beef rib bones with marrow that are ground and formed into sticks, they are a safer alternative to whole bones that can splinter, according to the company. They’re also available in dental and hip and joint formulas.
Glenn Godley, senior vice president of sales for MiracleCorp in Dayton, Ohio (Stewart Pet’s parent company), said there is brand loyalty and crossover from the company’s Raw Science and Raw Natural food lines, and far more pet owners who want to treat with raw. The company has an extensive offering of freeze-dried liver treats (Pro-Treat); freeze-dried meat with berries and flaxseed (Raw Naturals); freeze-dried meat with vegetables (Pro-Treat Plus); Healthy Licks All-Natural Frozen Dog Treats; Pro-Treat natural biscuits; and Obey training treats.
Because pet obesity is a growing problem, many suppliers are introducing low-calorie and mini-size treats. The Honest Kitchen’s new Quickies and Smittens have just one calorie each. Zuke’s new Skinny Bakes have less than 10 calories, and its Mini Naturals training treats have three calories.
Grow lauds this trend: "Treats are a big contributor to obesity.”
Safety Is Crucial
Safety is the buzzword that comes up with retailers and suppliers due to product recalls. Gigliotti started Whole Life Pet after the 2006 pet food recalls. His products have human-grade ingredients, are sourced from American suppliers, and are cooked and then freeze dried for shelf stability without chemicals in the company’s own manufacturing plant, he said. Whole Life tests every batch and quarantines it until independent lab results come back, and consumers have access to all test results by batch number, which is printed on the packages, he added.
"I wanted to create a brand that is healthy, produced with integrity and sold with transparency,” said Gigliotti, who works directly with suppliers, pioneering the farm-to-friend and pier-to-pet concepts. His new Pier 6 freeze-dried fish treats feature under-utilized fish from the fishermen on Boston’s Pier 6.
His company has 18 treat offerings, including the only certified organic freeze-dried treats, he said.
Gigliotti said the pet food industry can expect more FDA inspections.
There is a huge demand for more specific labeling, including ingredient sources, GMO notifications, identification of allergens in manufacturing plants and where products are made, DeLorenzo said. He added that USA made is important to many customers, and some retailers are creating USA-made sections in their stores.
"Made-in-the-USA positioning also has become a highly sought-after feature in the purchasing process, especially in light of the recent issues our industry has been forced to address on products manufactured in China,” Fabits said. "This trend has occurred very rapidly over the past two-year span. Pet parents have become very adept at determining ingredients and points of manufacture, which have a direct impact on their feeding/treating purchasing patterns. The influx of information on the Internet also has had a significant impact on purchasing habits, as well."
Vetere said he thinks the proliferation of natural treats will dial back in the future.
"We’re starting to reach a leveling point in the growth curve, and some of the more exotic products may drop off that consumers are not buying into,” he added.
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