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Roundtable: Going Organic

Natural Pet Product MerchandiserIndustry experts discuss the challenges and benefits of marketing organic products.

While some retailers have always focused their businesses on organic or natural products, many are currently weighing the benefits and challenges of bringing organic products into their inventories. With that in mind, Pet Product News International sought input from  organic industry experts to give retailers an overview of some of the top issues affecting the organic sector and tips for making organic work in any store.

Panelists Moderators
Nancy Cook, VP for technical and regulatory affairs for the Pet Food Institute  Sherri L. Collins, editor, Pet Product News International
Stephanie Volo, president of Planet Dog 

Brian Hutchins, news director, BowTie Inc.

Andrew Kim, co-owner of Healthy Spot Boutiques Kerri Danskin, editor Natural Pet Product Merchandiser
Sharon Sherman, CEO of PetGuard

Pet Product News International: Nancy, can you give us an update on the current controversy over whether including added nutrients makes a food product ineligible for organic certification?

Nancy Cook: Pet food is the fastest growing product in the marketplace. Organic pet food has the opportunity to be one of those fast growers, but that can’t happen without rules that allow all producers to produce to the same standards. I had the honor several years ago of participating with several folks, including Sharon Sherman, in the Pet Food Task Force for the National Organic Standards Board (NOSB), and made recommendations [that] were passed from the Standards Board to the National Organic Program (NOP) in 2008.

The Task Force did a wonderful job of dealing with the things that had to happen for safety and regulation. NOP has had the proposal that NOSB approved since November of 2008. The producers of organic pet food have been working from guidance provided by the NOP to produce pet foods while there hasn’t been specific federal regulation on what organic pet food was supposed to do.

Sharon Sherman, PetGuard
Sharon Sherman, PetGuard

Sharon Sherman: In 2004, the NOSB recommended there be a task force and they selected a broad range of individuals [including] companies, regulators, veterinarians, consultants, retailers and certifiers. It was many meetings in which we would consult with the veterinarians, consult with the regulators, to look for their recommendation, and focusing on the needs that are required for dogs and cats. Pet food must have specific nutrients. This is their only meal. This is the only way for them to receive those nutrients that is organic. They can’t choose their fruits and their vegetables [like people can]. So everything was carefully crafted.

Cook: We’ve been working on [the question of whether adding vitamins and minerals to organic food disqualifies it from organic certification] for several weeks. The problem is that what the NOP is asking us to do is to go backwards, to produce products that can’t be complete and balanced. NOP has the authority to clean up that issue and not cause disruption to the industry, if they leave things as they are until they can take that document that was prepared so carefully by the Task Force, write it into an interim rule, and go through the proper rule-making process. Some certifiers have been informed of this, some have not. Some have been informing their companies that NOP is going to be not allowing accessory nutrients like taurine, which is required for cat food, and is necessary for many dogs to have adequate nutrition.

Sherman: I think they could be unaware of the science behind the need for taurine in a cat’s diet.

Cook: The application of what they’re asking us to do will mean that no nutritionally complete and balanced pet foods will be eligible for certification until the regulations are amended, and that will cause a major disruption in the marketplace.

Stephanie Volo, Planet Dog
Stephanie Volo, Planet Dog

Stephanie Volo: What is the reasoning behind it?

Cook: Sharon, I can’t answer this because we don’t make organic pet food, but I believe that you were given guidance in 2007, that the human food rules were those that you were supposed to follow. Is that not correct?

Sherman: Exactly.

Andrew Kim: So is the primary concern the supplement pack, or the additional vitamins, minerals, or amino acids that need to be added into the formula tips the 95 percent ingredient total so that you can no longer receive the certification?

Sherman: No, because in most cases, that’s only the five percent that’s on the back end. It’s the actual ingredients of taurine [and other nutrients that are] being added to the diet to deem them nutritionally complete.

Cook: It’s unreasonable that they would take this action first, without consulting the Task Force; second, without consulting more than just a few people in the industry; and third, by putting any information out piecemeal. It makes liars out of all the people who have invested an awful lot of work in formulating safe, healthful pet food products for the organic market.

PPNI: Andrew, what would happen if the organic food that you sell was no longer certified?

Kim: It would have a tremendous impact. There’s a lot of distrust, and I think that’s why the organic pet food market has grown so rapidly. For that to take a serious step back would really shock the consumer and affect the buying.

Volo: I agree with Andrew.

Sherman: I do too, and the fact that we have the organic certifier on the label has moved this industry at a faster pace.

Cook: Absolutely.

Volo: They are looking for certification because that’s what they believe in. If that’s removed, it will get them to be more suspicious and really have a major effect on that part of the industry.

Sherman: It will erode the whole category.

Cook: We need to understand that this is not just pet food. There all kinds of products in the organic marketplace that are going to be put at risk by what they’re doing. This is just one example of where they have had what they need to do the work, but have elected not to do it. The Task Force worked hard to build a rule that’s basically a drop-in rule so they didn’t have to spend a lot of time and effort rewriting it.

Sherman: It was very explicit. It was like a labor of love and commitment for the industry, and where we wanted to see it go. The ramifications are huge.

Cook: There are two things we need to think about here. One is how far we bring it out into the public. That’s why we just wanted to make sure that this group understands that we don’t want to scare anybody. The products that are in the marketplace are good, safe, healthful products.
Sherman: There’s nothing wrong with them.

Cook: This is an argument over procedure.

PPNI: Stephanie, do you see the organic market growing for the non-edible goods like collars and clothes?

Volo: Since day one, our mission was that if we came out with a new product it would be made out of eco-friendly materials or all-natural or organic. When we decided to do treats, it took us about two years to actually find the right partner, because we didn’t want to do it in a way that didn’t match our philosophy or our mission. Things that are going to go into a dog or cat’s mouth are definitely priority. People are definitely more educated now. In our store, we have consumers that want to be educated first and foremost. They won’t make a decision unless they know that it’s the real deal.

Kim: I completely agree. We’ve been able to carve out our entire market niche based upon a more discerning consumer. We launched with brands that were smaller in the marketplace that we felt met certain criteria. We tried to partner with the consumer, not the manufacturer. That’s how we’ve built our reputation and have been able to grow in this environment. The challenge is staying on top of the current news and trends, and educating the consumer. The organic consumers are the most educated, but are also the ones who spend the most money. So I think it will affect not only the food side, but—

Volo: The accessory side as well.

Kim: Yeah, all the way down the line.

Volo: I agree wholeheartedly.

PPNI: How do you reach out to potential customers who are considering natural products, but aren’t sure whether they need natural and organic, or just natural?

Kim: The consumer is becoming a lot smarter. I think natural, as one customer says to me, means nothing. It’s just a word that people slap on to packaging these days to sell. There’s no strict criteria. The seeds were already planted where the consumers were starting to look more at the packaging, the ingredients, where is this being made, and then [the food safety scare of 2007] just awakened that fear that they didn’t really know what was going on. Now they’re clinging more tightly to the seal, where things are being made, what ingredients are being put in, not only my dog’s food or treat, now it’s what material is being used that my dog is chewing on—this toy all day, or this collar.

Cook: The difference between human food and pet food is that there is a definition and a tightly controlled requirement for [using the term] “natural” in pet food. If you have synthesized ingredients in a pet food, the only way you can use them is with a disclaimer saying something like natural with added vitamins, minerals, and other trace nutrients.

Kim: I think the challenge though is the average consumer is not educated with the differences and the nuances of labeling from one industry to the other.

Cook: That might be one place when the new FDA rules come out that we can all help educate everybody.

PPNI: Would consumers appreciate being sure products aren’t marked as organic if they contain non-organic ingredients?

Sherman: That’s why basically the Task Force came into being. That’s why we were approached to craft the standards, because there was so much confusion in the marketplace.

Volo: I think any clarification would benefit the consumer.

Sherman: I think [regulation] was rather successful in eliminating a lot of folks that were calling their product organic when it truly wasn’t.

Cook: Pet food in the United States is one of the most highly regulated products that you’ll ever see. It’s more highly regulated than anything you or I eat. You have an average of 34 essential nutrients for dogs and cats, and if you look at a dog or cat food, you’ll find anywhere from 30 to 60 ingredients in there to make that product complete and balanced. Those are all separate ingredients that provide a function. We work closely with the regulators, as well as with the folks in the organic manufacturing area, to make rules that work for the Task Force, and for the folks that it was involving, and we hope that those are working. That’s what the world has been working toward, is the items that USDA and NOP accepted two years ago.

Volo: Well that’s why it’s so confusing.

Sherman: It’s ever-changing. In other words, the science is there, and so when AAFCO [American Association of Feed Control Officials] gives a recommendation, they tell you what’s needed and what’s not needed. Organic customers are label-readers. We’re really, in the pet industry, trying to meet their needs.

Volo: With budget cuts and changes, is this becoming less of a focus?

Sherman: No. The largest-growing segment of the organic food movement is the pet food sales. So there’s very much a market for these products.

Volo: That’s why it just seems so confusing to me that they [the NOP] are in essence going backwards.

Sherman: Well, with Nancy’s help, hopefully she’ll be able to reach them to have them understand why those nutrients were added to the diet.

Kim: Is the crux of the issue just the taurine content?

Cook: There are other amino acids and vitamins on the human list that aren’t on the approved animal list. You’ve got to be really dedicated to make pet food. Every time we get somebody in the business from a food company [for humans], they walk around stunned for the first six months, because they say it can’t be this complicated. You remember those days, Sharon?

Sherman: Yes, because we started in 1979, and our first food in 1981, and we had “natural” on it. There wasn’t a definition for natural, so we had to remove the word off our label.

Kim: If the taurine and the other amino acids were added in as kind of a supplement that derived from various ingredients that met the organic seal, then wouldn’t the food still be able to meet that bar? As opposed to adding taurine as an isolated amino acid? What if it were derived from increasing the meat content, decreasing the grain content, versus adding taurine as an additional amino acid?

Sherman: The amino acids are there, but you have to ensure it. That label, and those vitamins and minerals that we add are the insurance, because, don’t forget, pet food is processed. So during the processing, some of that has to be replaced.

Cook: The other thing you have to remember is that the label on a pet food is a guarantee. It is not a typical nutrient label like what you find on human foods. [Pet food] must have certain levels of all of those nutrients, or you can’t call it complete and balanced.

Volo: But could it come from someplace else? Even if the price went up?

Sherman: It would be awfully hard to ensure it, and that’s what we’re all about.

Kim: So the processing of the food is what degrades the taurine content and so you have to re-supplement the food to ensure that it reaches the level where it won’t cause blindness.

Cook: Let’s think about what you just said. It’s not the processing of the food. It’s the cooking of the food. We do this every day. And it’s worse in what we make at home for our animals, because we don’t have any idea what we end up with when we cook various products that we bought.

We don’t know if the meat was fatter, the chicken was older, the peas were drier. Manufacturers have to look at their formulas all the time and make sure that they’ve got those ratios exactly the right level to provide the nutrients they’re guaranteeing.

Sherman: All the formulas are looked at, all the time, because, at the end, you have to meet your label.

Cook: You know it takes almost two years to put a new pet food on the market?

Sherman: I will vouch to that, and it used to not be that way, and in some cases it can take longer.

Cook: It’s because you have to prove that your product meets all the requirements that the states have put in place. Now that the federal government is taking over, those requirements are so extreme; it’s amazing.

Volo: That’s great for retailers, because we’re going to ask the questions to protect ourselves and our consumers.

Sherman: And people are going to rely on you as a source for information.

Kim: Correct.

Volo: Exactly. So where do we go from here?

Cook: We’ve got their attention. We’re meeting and trying to set up some meetings to figure out where we are, and whatever happens will be done in a fashion that works within the regulations that the government has. We’re going to try to help keep them open, so they can make sure people know what’s going on.

PPNI: So, Stephanie and Andrew, what advice would you offer retailers looking to enter the organic market?

Volo: It’s good to know that there are resources out there. Whether it be through BowTie, Pet Product News, or Natural Pet Product Merchandiser and obviously several others, there are several resources out there. We all just need to continue to make sure we are in the loop. We have to make sure we know everything that goes into what makes organic, certified organic, and only carry what we think is the best, and continue to teach people how to read the labels.

Kim: When entering this marketplace, you have to understand that your consumer is going to ask more questions. It’s an absolute requirement for the retailer to know the products they’re carrying on their shelves because your consumer’s going to demand more out of the products you carry. It’s a fast-paced market that has a lot of rewards, but in order to stay competitive, you need to stay educated and know what products are on the market, what are products in the pipeline, what are the topical issues. There’s nothing more embarrassing than having a customer come in who knows the market better than you do.

PPNI: Can each of you give us a final comment?

Cook: I appreciate the opportunity to talk about this issue. We look forward to working with the NOP. They have a really hard job. Any time you’re adding marketing rules on top of safety regulations it’s hard to make sure everything works equitably.

Volo: It would behoove us to continue these conversations. Having these resources and having a team of people that can continue to talk and educate each other and be able to spread the awareness out there to others is very beneficial for all of us.

Kim: Being part of a continuing discussion and education process would be great. Having up-to-date industry updates would be great, with regards to the organic pet food industry.

Sherman: It’s important that we continue offering as much education as we possibly can deliver so people can delineate between what is natural and what is organic and what is not. That’s important to maintain the integrity of the industry. I’m looking forward to becoming more involved in this issue, and it seems like we’re going have the general support of the community. <HOME>

This roundtable first appeared in the June 2010 issue of Natural Pet Product Merchandiser. Listen to the discussion here.

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