Industry participants discuss how they differentiate “natural” from “green” and what they do to get their customers to understand the terms and buy more product.
Natural, organic and green products make up a fast-growing segment of the $50 billion-plus U.S. pet market, accounting for more than $90,000 in annual sales at the average pet specialty retailer, according to Pet Product News International’s 2011 State of the Industry Study. The only factors slowing the growth are affordability and accessibility, surveys by the market research firm Packaged Facts found. Natural Pet Product Merchandiser brought together two retailers and two manufacturers to talk about the product category—specifically differentiating and blending “natural” and “green.”
|Laura Calascione, lead product developer at PawGanics
||Ken Niedziela, editor of Natural Pet Product Merchandiser|
|Biff Picone, owner of Natural Pawz|
|Chris Roberts, owner of Barkwheats
||Sherri L. Collins, editor of Pet Products News International|
|Chip Sammons, owner of Holistic Pet Center|
Chip, your store is called Holistic Pet Center, which would seem to indicate that your customers know exactly what you sell. Is that true or do you have to do a lot of educating about what is green and what is natural?
Chip Sammons: Nobody really knows what is green or natural because there are no legal definitions. Everybody has their own perception. A guy came in the store last year and said, “Chip, there’s a store just like yours that opened in Happy Valley.” And I said, “Wait a minute, there’s no store like this store because we’re unique.” I went to that store and upon opening the door I saw that 30 percent of what they had I can’t carry based on what I perceive to be natural and green ingredients.
NPPM: Biff, how do you get customers to buy into the words “green” or “natural”?
Biff Picone: I think you need to make sure that education is first and foremost with your employees. A lot of stores try to be natural, but when you look at them, a high percentage of what they sell is not. As far as the green thing, it’s hard to define. We look for products that are eco-friendly.
For example, we have a cleaner that works very well but does not harm the environment or have the chemicals that a normal cleaner would have. And we also use a lot of products that are recycled, which is also eco-friendly. I think more people relate to that than just a standard, “We’re green.”
NPPM: PawGanics makes products for both the human and pet markets. Is there an underlying difference between the product lines?
Laura Calascione is the lead product developer for Pet Labs 360 and PawGanics, the Hicksville, N.Y., makers of safe, effective and sustainable solutions for pets and pet owners. Her experience in the consumer goods industry includes key innovations in natural supplements, grooming and remedies.
I’d like to think that there isn’t. We have our BabyGanics line, which is sold in the juvenile retail sector, and we have PawGanics, which is focused for pets. Anything that we do with either brand, we want to make sure we take into account the safety and efficacy of our products.
With babies, there are concerns about their immune system, and they are very vulnerable. Likewise, your dog is lying on the floor all day long and is intimately exposed to any toxic chemicals and cleaning solutions. We try to make sure that we provide alternatives that help mitigate any concerns that a family member would have.
NPPM: It sounds as though your products would be considered more green than natural. Is that true?
Calascione: Natural is essentially how you define it—whether an ingredient is naturally derived. Green is more of a mindset, something that’s more eco-driven, whether it means avoiding ingredients like phosphates or using materials that are readily biodegradable or using packaging that is either recyclable or made from recycled materials.
NPPM: Barkwheats is an unusual company in that it supports natural, green, sustainable and fair trade. Does it bother you, Chris, that some retailers may blend the different terms?
Chris Roberts: It’s always a concern. It’s definitely a tricky thing to educate the retailers I work with on the differences, and how to tell people what those differences are and how to make them care about the differences. Barkwheats has started doing farmers markets and fairs and festivals.
We do one really big fair here in Maine that’s all about sustainable living and local agriculture. About 60,000 people come through in a weekend, and there are still people who just don’t understand it yet and don’t really care about what we do.
Biff Picone has more than 25 years of experience in business development and management. Started in 2005, Natural Pawz has grown to eight stores in the Houston area. In 2009, Pet Product News International selected Biff and his wife, Nadine Joli-Coeur, as among the top 10 people to watch in the pet business.
So it’s tough to keep persevering and pushing through to try to get to those people. It gets interesting from an education aspect to figure out how to make people understand and care more about where things come from and how they’re produced and who’s producing them.
Picone: I think one problem is how do you define natural? The ingredients in most of the foods that we carry come from a natural source. It means there are not a lot of synthetics, not a lot of artificial, not as much additives. I think natural is such a broad definition. Organic, on the other hand, is a good label. People understand what organic is. There is a segment of people, not a very big one, that come in looking specifically for organic.
NPPM: Have you come across any pet products labeled “natural” or “green” that you question?
Sammons: Even though nitrates are natural, we don’t include them in any of our foods. And even though beaks, feathers and feet are natural on poultry, we don’t believe they’re a sufficient source of protein like many other stores do.
I would say the majority of products on the market that say they’re natural are not natural, because any product you have with a liquid, you’re going to have to preserve that somehow and the preservative of choice a lot of times is potassium sorbate. How many of us believe potassium sorbate is natural or a good ingredient to have? For me, it’s like, “Well, I’m sorry, I don’t believe in that,” whereas other people might believe in it. We all draw the line at different places, and I think that’s OK.
Calascione: There certainly is a level of frustration from a product development angle when you’re trying to ensure that every ingredient is as safe as possible. Another challenge is price point—sometimes these ingredients are just so cost-prohibitive.
Pet owners have always shopped for an effective solution that’s going to work. They’re looking for a quick fix. If their pet makes a mess, they want something that’s going to get rid of the stain and the odor so that when they have company, it’s not like, “What’s that smell?” I wasn’t on the natural bandwagon until about four years ago. I think we’re becoming more aware of what we’re putting into our bodies and what we’re putting into our environment.
NPPM: When it comes to choosing an ingredient, how do you balance its sourcing? Coconut oil, for example, is good for pets and is an excellent surfactant for cleaning, but what if it’s shipped from Fiji or The Philippines?
Roberts: There’s not a processing infrastructure in Maine, or in New England, to get many of the ingredients we use. Our buckwheat is grown mostly in Pennsylvania and upstate New York. The honey comes from Vermont. So we’ve had to figure out how to balance all that.
Once we had to go from farmer to farmer to farmers markets to pick up ingredients. We’d buy, say, fresh herbs and I’d have to dry and process them. We’d have maybe eight or 10 farmers bringing us loads of parsley every week, but if I needed more, I couldn’t get it.
We decided that in order to survive in the market, we had to source ingredients from suppliers that are Fair for Life certified, that we feel comfortable working with. And so that’s where our ingredient sourcing is now. The marketplace dictates a lot of what you can do for pricing, and we couldn’t price ourselves out and not be in business anymore. It’s definitely difficult.
Picone: We want to know the sourcing. There is a difference in whether an item is sourced in the U.S. or outside of the U.S. or North America. While it may look the same and have some of the same properties, it’s really not the same.
I think it’s important for a retailer to have good relationships with vendors and suppliers who understand sourcing philosophies. We have seen some good companies that, when they have changed their sourcing suppliers, ruined the formula. Our vendors know that we want to be informed about any changes in key sourcing products and ingredients because the changes impact health and palatability and the things that our customers see.
Chris Roberts is the founder of Barkwheats, a Maine-based developer of grain-free dog treats found in hundreds of stores. Raised in a family of restaurateurs, he brings a love of agriculture and sustainable farming.
I wear two hats because I have a retail store and we also make vitamins in an FDA-certified lab that we wholesale to different retailers. I really understand what Laura said about cost. It’s all about finding the best we can do for the price and looking at the ingredients.
I was talking to the financial manager of Natura Pet Products a couple of months ago. He was excited about having good sources right around where they make their foods in Nebraska. So, yeah, it’s all about good sourcing and then letting the customers know.
NPPM: What is the manufacturer’s role in educating retailers and customers about natural and green products?
Calascione: Education is an ongoing process whether it’s internally with ourselves or communicating outward. We are constantly looking at better ways to communicate our message and to get the point across to pet owners and also to the retailers. In this type of an environment there’s never enough education.
One thing we find challenging is communicating on a retail shelf. Many stores have a clean-floor policy or don’t want to incorporate signage. A lot of times it’s very challenging to get a message across.
Roberts: I get the message across in stores mostly with little bits of signage and with cheat sheets kept behind the counter for employees. We have a little bit on the packaging, but mostly there’s a lot on our website that can point people.
Probably the biggest piece of education that I do on a daily basis is trying to figure out better ways to convey to people that our product is, in fact, free of grains, free of gluten. People feel really good about being able to call me on my cell phone or talk with me if they have a customer who has a question.
Picone: The vendors and suppliers who put effort into training, into promotion, into working with our salespeople are the ones who have the greatest return. A lot of suppliers think that because their product’s on the shelf, it’s going to sell itself. We find that the people who do the research, promote their products and articulate them in a very straightforward way get a good response from our salespeople, and that gets our salespeople excited about talking to the customers.
It really does start in some respects with the vendor, and we appreciate vendors who do their homework and do the things to find out about their product and tell us the story of their product and the differentiation and advantages that they offer. Because it does pay off. And any vendor who’s not doing that is shortchanging their product.
NPPM: What do you want the most from manufacturers in terms of helping you educate your staff?
Sammons: It’s all about the relationship with our vendors. Natura Pet Products recently sent 13 of their people to the Northwest to talk to a half dozen retailers. And they said, basically, “What are we doing right? What are we doing wrong? What do your customers want?” They were intrinsically concerned about doing better and making us happy.
We need that relationship with different vendors, the people we do business with. And one of the most effective things in my store is when these vendors, manufacturers, manufacturer reps actually talk to my employees instead of me, because a lot of times I’m not on the floor.
NPPM: What have you seen in the natural and green market recently that excites you, or what would you like to see?
Picone: What really excites us is the emergence of more grain-free foods. As we’re finding, grain-free addresses a lot of problems and helps a large number of animals. The other thing that excites us is the variety of proteins being made available. We’re seeing more things in the fish base with salmon and whitefish. Ingredients like chickpeas excite us because we know that it’s making the foods a lot better and a lot healthier for our pets.
The other thing we’re looking for is the emergence of a lot of small companies in the non-food area that are really going to the healthy, natural mantra and are bringing out some products that show good promise.
Chip Sammons is owner of Holistic Pet Center, which he founded in 1988 in Clackamas, Ore. He is the author of “Flea Control: A Holistic and Humorous Approach,” and he hosts a one-hour radio program, “Pet Nutrition & News,” every week on Portland, Ore., radio station KPAM.
What excites me is companies like Natura and Champion that actually listen to us on the front lines. And like Biff said, there are more and more smaller companies that get it about natural.
Roberts: We’ve talked to many retailers and customers, and people want meat stuff. So we’ve got a line of smokehouse treats that hopefully are coming out soon.
Calascione: We see a lot of things trending from a supply standpoint, including natural preservatives. Previously, some natural preservatives were potentially 10 times the cost, and to get the same level of effectiveness you had to use double the amount or even 50 times more than what you would normally use. I think we’re starting to see some advancement in preservative systems.
And I think in regard to raw materials, suppliers understand that it’s a real opportunity. It’s allowing us to get some raw materials that are becoming much more effective and certainly more price-friendly.
NPPM: Is there anything you would like to add?
Sammons: I think the greatest danger in the pet industry is the fact that so many people call themselves natural when they’re clearly not. It’s really incumbent upon each one of us to help educate people to know what is natural and what isn’t natural.
Picone: I agree 100 percent with what Chip said. Some of the big-box stores are trying to promote themselves as being natural and having natural products. They’re trying to market to some of our customers, but it’s really not the same. And it just puts us more on guard to make sure that we step up with all the good practices that we have and the advantages and the customer service and being closer to the customer and to the pets and how we select products.
It’s become more important than ever to make sure that we’re able to differentiate ourselves and show our customers that there is a difference.
Roberts: As everyone knows, education isn’t easy, but it’s necessary. Just keep pushing the message out—that’s the biggest thing.
Calascione: One area that we certainly wish to put more focus on is the education and transparency of our products and our differentiations of what we’re trying to do. And that includes communicating not only at a store level but also at a consumer level, and just simplifying it.
Editor’s Note: The transcript has been edited for length and clarity.
This rountable originally appeared in the December 2011 edition of Natural Pet Product Merchandiser.
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