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Natural Pet Product Merchandiser Roundtable: Functional Foods and Treats

Industry participants discuss functional foods’ place in the retail sector, how to market the products and the best ways to get reluctant customers to make the switch.

Natural Pet Product Merchandiser
The concept of functional foods has been around since the 1980s, when the term was used in Japan for foods with specified health uses. Since then the idea has migrated beyond human food and into the pet food realm, where today functional foods and treats are accepted as those that offer health-promoting or disease-preventing properties—in short, foods that go beyond the basic function of supplying nutrients. Natural Pet Product Merchandiser invited two manufacturers and two store owners to talk about the product category.

NPPM: What are the trends in functional foods at the ingredient level?



Gary Bursell, CEO of Steve’s Real Food Ken Niedziela, editor of Natural Pet Product Merchandiser
Jennifer Fadal, owner of Wag Natural Pet Boutique
Dale Greenbury, president of Full Petential Sherri L. Collins, editor of Pet Products News International
Lisa Pearce, owner of Green Pawz Pet Supply
Dale Greenbury: The trends closely follow the trends popular on the human side. So you’re looking at things like probiotics, which are being heavily promoted on the pet side of the business right now, and natural antioxidants like superfoods, superfruits, noni, acai, blueberries. Anything that’s becoming more mainstream on the human side of the industry is carrying over into the pet side.

Gary Bursell: I agree with Dale. Natural ingredients are a big item. Pesticide-free is important. You want to use meat that’s hormone-free, antibiotic-free. All the things that human beings are looking for in foods they’ve transferred to their animals.

NPPM: What about at the retail level?

Jennifer Fadal: Coconut oil is relatively new in the pet market and definitely becoming more mainstream at the retail level.
Lisa Pearce: Coconut chips are very, very popular. A lot of treats are trending toward the brain-nourishing sides with Gingko biloba and DHA [docosahexaenoic acid]. Also, no byproducts, chemicals, artificial ingredients. People are looking for products rich in antioxidants and apples, cranberries, sweet potatoes—anything that is added benefit.

Fadal: One of the biggest trends in my store is grain free, not only in food but in treats. A lot of folks just want a treat to be as clean as it can be and if it has anything else added they want vitamins or antioxidants.

Pearce: Especially for training treats, people want to buy a small simple treat that’s not full of calories but is rich in nutrients. Maybe an all-meat treat or a simple low-calorie treat for training.

Gary Bursell
Gary Bursell, CEO of Steve’s Real Food in Murray, Utah, has been in the pet food business for more than 30 years. He was a comptroller at Nabisco and then vice president of American Nutrition.
NPPM: Are pet owners concerned with any particular health areas?

Bursell: Allergies are a big issue with a lot of pet owners.

Fadal: I’m in Florida. Skin and coat issues are No. 1 year-round.

Pearce: Another popular area is gut health. People come in with gassy dogs. They want the fruits and veggies, maybe the omega 3s and 6s, flaxseed—anything that helps the digestive track.

NPPM: Dale, pretty much all of FullPetential’s products are functional foods or treats. What are your best sellers, Dale?

Greenbury: On the treat side, our best-selling item is Luv Bites. It’s a cocktail of antioxidants and a very natural treat. It’s a shelf-stable product so it does have a little bit more sugar in it. But it has antioxidants from blueberries, vitamin C, vitamin E, pomegranate, and you’re looking at lutein for eye health. As a carryover, we’ve recently expanded the functional dog treat line and now have a skin and coat. It’s primarily a DHA-fortified product, the same type of DHA that would be used in most of your human infant formulas.

NPPM: Dog owners are probably well aware of functional foods and the need for beneficial foods. Do you think the cat marketplace will ever catch up?

Pearce: You know cats; it’s just a completely different market. People like that inexpensive little treat because a lot of cats are picky. I would like to see it expand, but I’m not sure if it will ever expand like the dog market.

Fadal: Well, in my store it’s expanded over the years. A lot of my cat owners that feed cheaper commercial brands of dry food have cats with IBD [inflammatory bowel disease]. If they’re smart cat owners, they’re looking for a good answer. We try to move them onto either raw food or wet food, and that usually solves the problem. So I think the market is growing and cat owners are searching for more natural answers.

Bursell: The cat is more of a carnivore than the dog. So that affects what they’re going to eat and cats interact with people differently than dogs do. I think dogs display more problems than cats do. Most of the cat problems I see have to do with the urinary track, because they’re eating carbohydrates, and it’s just not the right diet for a complete carnivore.

Jen Fadal
Jenn Fadal is the owner and founder of Wag Natural Pet Boutique, a natural and holistic pet store in Tampa, Fla.
Greenbury: We are seeing a big increase in the desire for supplements because of issues with the bowel, hairballs—those types of things. We stayed out of supplements for cats for a number of years until we got a critical mass of people using our dog products for their cats. So we fine-tuned one of our dog products specifically for cats and it’s been a big seller. It’s not near the volume of the other product, but it is expanding.
Pearce: We’ve been open only a year and a half, but I’ve seen the supplement section grow tremendously in the past six months. We get a lot of cats in with urinary issues. People are looking for a cranberry relief.

Fadal: My cat owners who come in are willing to try anything, much more so than the dog customers. They’re willing to try any new can of food. Anything I really recommend they’re willing to try.

NPPM: How do you educate pet owners on the properties of functional foods?

Bursell: We educate store owners. They educate their customers, and then the customers come back and the stores do well.

NPPM: Lisa, you did a great deal of research on helpful products and pet nutrition before you opened your store.

Pearce: Yes. I work with a couple of holistic vets, and I did a lot of reading and talking to people in the industry. I’m not a vet, but I try to teach my customers to read a label and identify the good foods and the bad foods. I even get out my laptop and go over the food they brought in and look at the pros and cons. Or if they’re looking for a certain food that I don’t carry, I’ll get out my laptop and look up the ingredient panel and try to teach them what’s good on that panel and what’s not.

Fadal: When we opened our doors 5? years ago we had a very limited knowledge. Over the years we developed strong relationships with holistic vets, and we’ve attended seminars and done a ton of web research and reading industry publications. We educate ourselves every day and that enables us to give the right information to our customers. And as soon as they use our recommendation and see the direct result on their dog or cat, then they’re sold because they actually see the difference. And now we have a lot of vets that are referring us and even coming to us with questions on nutrition.

Greenbury: We rely primarily on the store owner or the store staff because there’s only so much you can do in your packaging. It’s rare to get a consumer who sits there and studies your products before they make a purchase. Most of our consumers let their friends know what the product has done for their pet. At the store level, we try to educate them on the features and how the products compare to the competition. One of the things that we see when we talk to folks is there is a lot of good information out there and some information that’s not as scientifically founded. That’s one of the hazards of the internet.

Bursell: We do a lot of education through the website. That’s primarily what it’s for.

Dale Greenbury
Dale Greenbury is co-founder and president of St. Louis-based Full Petential. He has a background in microbiology and is a former technical sales manager with AFB International, which makes natural flavorings and functional ingredients for the pet industry.
Greenbury: Right, so do we. Unlike Ralston Purina, we’re not in a position to do a national ad campaign about one feature or benefit of our product. But we do spend a lot of time trying to provide educational materials for the consumer.

Bursell: We do a separate distributor and retailer manual because they have different motives.

NPPM: Speaking of the Internet, which is harder to deal with, the undereducated skeptic or the overeducated, I’ve-read-everything-on-the-Internet customer?

Pearce: Definitely the Internet person. I’d much rather have someone come into the store with a blank slate.

Bursell: The hardest customer is the one who is feeding Science Diet and buying it from a vet who sells it.

NPPM: Talk about your marketing techniques.

Fadal: We do shelf talkers a lot of the time and call out one or two of the health benefits for the food or treat. That helps stimulate conversation and questions. We do a ton of events, and we have a wellness day every year with holistic vets in the store. We have reps from various food lines and our staff demonstrate and explain food and treats. At each of our events we tie in a wellness aspect and highlight one or two or more items.

Bursell: A primary way to sell raw products as well as any products in the independent market is the SuperZoo show, the Backer show and the Global Pet Expo. 

Greenbury: We provide merchandising ideas on where things can be put in logical places in the store.

NPPM: How do you get customers to buy into the concept of functional foods?

Pearce: If someone comes in who is feeding one of the big-name brands, my laptop is a huge tool for me. Having the ingredient panel right there kind of teaches them what’s in their food or what their food is lacking. I show them some of the products in my store, the higher animal proteins and that there’s not a bunch of fillers.

Fadal: We do that and we also give samples. Sample, sample, sample all day long. Once you get them to sample it with their dogs I would say probably eight out of 10 times those people return and buy the food. If I give them enough samples, sometimes the dog will immediately will start to digest better and the owner will notice a stool improvement and come back in and buy. If you have the conversation and give them the sample, it’s pretty darn easy to switch them over.

NPPM: How do you handle FDA labeling requirements in terms of health statements? 

Greenbury: That’s a huge challenge in our industry because there are well-documented things that you can’t say. So we are very careful with our statements on our packaging. People feel that a pet is less regulated than a human, but from our perspective it’s more the other way around.

Pearce: If people are looking for a certain something, whether it be antioxidants or something else in the food, the wording isn’t that important. They’re coming in looking for that pertinent ingredient, not necessarily all the words that go along with it.

Lisa and John Pearce
Lisa Pearce and her husband, John, opened Green Pawz Pet Supply in February 2009 in Ann Arbor, Mich.
Greenbury: I’ll give you an example. We have a product that has DHA and omega-3 fatty acids. The proper term to use from AAFCO, the American Association of Feed Control Officials, is “fat products.” Fat product is not the most appealing term to the consumer when you’re looking at a label. But, really, that product is 17 percent DHA, pure DHA.

NPPM: Talk about food crazes. Flaxseed oil appears to be going out of fashion. Is omega-3 next?
Fadal: Some people are like, “What are they going to come out with next?” But I think for the most part my customers are not really phased by the latest and greatest. They just want to know what’s going to work for their dog or cat.

Pearce: I think people are always looking for new things, new exciting things. People like coming in and seeing the newest and greatest and trying it.

NPPM: How much research does FullPetential do in terms of ingredients?

Greenbury: Quite a bit. My background is in microbiology, so we spend a lot of time with probiotics. We spent a lot of time looking at the functionality of those products, what makes them different and why. We use some specialized probiotics in our products that are not the same types you might see in a GNC-type product.

NPPM: Are there any other challenges facing the functional foods marketplace and the overall pet food arena?

Bursell: With raw foods, one of the things going on right now is pressure-treating. That has to do with sterilizing the product. And in some aspect that runs counter to what we’re trying to do. We’d like to keep some of the bacteria in that product. So I see that creating a divide in the raw food market right now. People who have gotten into trouble with recalls have had to go that way, I believe. You just don’t have a choice after the FDA is after you three times. I’m not doing the pressure testing because I think it degrades the product. 

NPPM: What challenges do retailers see in the marketplace?
Fadal: The biggest challenge involves veterinarian diets that vets throw their clients on for most everything these days. That’s my biggest battle because I know I can convert their cat or dog onto a functional food that will help whatever specific ailments they’re talking about. But sometimes they’re so afraid to deviate from what the veterinarian has said.  If I can get them to look at the ingredient label of that veterinarian formula, they’ll see it’s just horrible. I think if a company came out with a veterinarian-approved formula that was all natural or just good in the way of functional foods—that would be huge. I know a lot of the companies have limited ingredient diets, like Natural Balance and Wellness and California Natural, and some of the vets are starting to recommend those. But the vets need to get more educated and get away from those specific veterinarian formulas. 

NPPM: What do you see in the future for functional foods?
Greenbury: One of the things we would like to see is some sort of analog to the dietary health supplement for pets—something that would allow you to put products out there that are beneficial for the pet and make some statements about the actual functionality. I think people are looking for convenience and a way to keep themselves and their pets healthy, especially as pet costs go through the roof and dogs are living longer and as cancers and those types of things become more prevalent or more diagnosed. I think the functional food has basically endless opportunity. 

Bursell: I think you’ll see a gradual trend toward the desire for functional foods. Humans are criticizing what happens at McDonald’s and Burger King and rethinking our own diets, and we’re going to look down at our knees and see our dog and think about his nutrition in the same way. So I think there’s going to be room for growth in our industry. The raw food business is growing a lot. It’s a small segment of the pet food business, but it is certainly growing faster than the dry food segment and the canned food segment. So I see real growth in it as the intelligence level about nutrition increases. If you think about it, nutrition is a fairly new science. We’re still learning things every day. That education base is growing at a pretty good level, so that will help our business.
Fadal: I think the education is definitely spreading on a larger scale. I know a lot of these functional foods and all-natural foods are moving into Petco and PetSmart, but in a way that’s great because those stores have the dollars to really promote and educate. One good thing about the functional foods moving into bigger stores is that it will spread the word.

Pearce: My hope for the future would be that people become more aware of what they’re feeding and why they’re feeding it. And not just, “Oh, it’s in a green bag.” Everything that goes in that dog’s mouth counts. People need to be more aware of what they’re feeding and why they feed it.


Editor’s Note: The transcript has been edited for length and clarity.

This roundtable discussion orginally appeared in the December 2010 issue of Natural Pet Product Merchandiser.


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