Industry participants discuss today’s natural products marketplace and share advice on how retailers may strategize, compete and succeed.
About one-third of all products sold in the grooming, dog and cat categories are natural in origin, according to Pet Product News International’s 2011 State of the Industry Study. The average pet-related business that indicated sales derived from dogs and dog-related products reported that natural dog products accounted for $51,400 in receipts in 2010 alone, not an insignificant sum. Natural Pet Product Merchandiser invited two manufacturers and two store owners to talk about how retailers can maintain market share in a competitive environment.
NPPM: How is business today?
|David DeLorenzo, president of Vetscience LLC/Fruitables Pet Food
||Ken Niedziela, editor of Natural Pet Product Merchandiser|
|Christine Hackett, CEO of Petropics LLC|
|Michelle McConnell, co-owner of Amy’s Natural Pet Pantry|
|Sebastian Tronolone, co-owner of Sebastian’s Healthy Pet Food and Supply|
I see an uptrend in the pet industry. I don’t think there are as many peaks and valleys as in most industries. I will say it was better a few years back, but I feel it’s on an upswing right now.
Michelle McConnell: It’s up over last year and has consistently been growing. In spite of the economy, we’re still seeing growth.
NPPM: What is Fruitables doing to grow its market share in the world of natural pet food?
David DeLorenzo: One key strategy is to increase our distribution among retail stores where we aren’t represented currently. The second strategy is to continue to innovate and bring new products to the market every year.
NPPM: What about Petropics and its Tiki brand?
Christine Hackett: We’ve been very aggressive in launching a comprehensive customer loyalty program that not only addresses the retailers that support us but also dips into the customer ranks with frequent buyer programs. We’re fighting for shelf space like we’ve never fought before.
NPPM: How does Amy’s Natural Pet Pantry get customers in the door, and more importantly, how do you get them to return time after time?
David DeLorenzo is president of Vetscience LLC/Fruitables Pet Food, a Dallas manufacturer of pet treats and supplements. He is a graduate of Arizona State University, completed the Food Industry Management Program at the University of Southern California, and has more than 25 years of sales and marketing experience in consumer packaged goods.
We advertise in a couple of local pet-related magazines, we get a lot of word of mouth, we have a website and Facebook page. So we use modern techniques to get people in the door. The way we get them to return is that we offer excellent customer service. Everyone here has really good product knowledge. We are also located in a really good area. That helps a lot. We’ll run coupons, like 10 percent off a product, but for the most part we don’t have a lot of coupons.
NPPM: How does Sebastian’s cultivate its customer base?
Tronolone: Customer service is No. 1. Without customer service you’ll never get any repeat business. Along with the frequent-buyer programs that we offer, we also bring people in through advertising. We advertise on TV, radio, newspapers and local throwaway papers. I think our best return comes from TV commercials.
NPPM: TV commercials?
Tronolone: We do 30-second spots. My sons are in the film business, so they produce the commercials for us.
NPPM: Let’s talk about product exclusivity. What percentage of Fruitables’ sales are to the independent stores and how important is that strategy?
DeLorenzo: It’s about 90 percent of our sales. The balance of it is export, people that buy online and people that don’t buy from our distributors. We find that the customer service in the independent channel and the one-on-one relationships that the stores have with their customers gets the word out effectively for us as a manufacturer.
Hackett: Your big-box stores are going to throw you on the shelf if you’re lucky to gain space, but they’re not going to build your brand. They’re not going to be there for your personal endorsement, that day-to-day, face-to-face customer interaction that a brand like ours especially depends on. We are committed to independents only. Without that partnership we wouldn’t be where we are today. Some brands that were specialized at some point, like ours, are now being sold both in the independent and big-box chain markets. Retailers I meet at trade shows show feelings of hurt and betrayal because they know that they helped make these brands what they are.
NPPM: Is selling almost exclusively to independents an advantage or a disadvantage for a manufacturer?
DeLorenzo: It’s a little of both. It’s an advantage that you can get your message out there through word of mouth and the early adopters. The disadvantage is that a lot of companies are much larger than us in size and scale and are selling in far wider venues than we are. They can do things that we can’t from a marketing perspective.
Christine Hackett, CEO of Petropics LLC, spent 17 years in store management. Seven of these years were spent working with one of the nation’s largest pet chains, where she specialized in small animal nutrition and formulation. Christine and her husband, Robert, are celebrating six years in business together and 13 years in pet nutrition, providing Tiki Cat and Tiki Dog Gourmet Whole Foods internationally.
How important is exclusivity at Amy’s Natural Pet Pantry?
McConnell: Probably 95 percent of our products are available only at independents. I think what also sets us apart is we do not carry anything made in China that dogs or cats can chew on or eat and even sleep on. That sets us apart from some of the other natural retailers in the area.
NPPM: Why China?
McConnell: Because of the potential for toxicity that we saw with the pet food recalls a few years ago. You hear of so many toxins in products from China that you don’t know are present until they start to cause a problem.Our customers appreciate that.
NPPM: Does Sebastian’s have the same policy?
Tronolone: I’m on board with Michelle. Our store in Sunriver is in an upscale resort area. People who purchase from us read labels, and if they saw “China,” it would go back on the shelf. So we bring absolutely nothing in from China. I’m sure there are good products from China, but it seems that the media has put “Beware” in front of the public.
NPPM: Your reaction, David?
DeLorenzo: It’s very consistent with what I’ve been hearing from retailers. One of the things that we do is put a little flag and “Made in the USA” emblem on the back of our packaging. Retailers and distributors said it is becoming more and more a question they’re receiving from their customers.
NPPM: Great customer service is obviously an important selling point for the independents. What is Sebastian’s philosophy?
Tronolone: Treat people the way you want to be treated. And if I find that’s not happening with my employees, I’ll bring it to their attention in a way that will make them be progressively better.
DeLorenzo: That’s a very basic, yet so overlooked, point in business. We try to do the exact same thing with our retail customers, with our distributors, with all our suppliers. It just is good business practice and good interpersonal human practice to do that. People know where you’re coming from and they trust you.
Michelle McConnell is co-owner of Amy’s Natural Pet Pantry, an Osprey, Fla., holistic pet supply store specializing in eco-friendly products. She previously worked as a veterinary technician and pet trainer.
We greet people as soon as they come in the door. Both Lisa [co-owner Lisa Hoffman] and myself are very good at reading body language, so we let people browse if we think conversation is going to annoy them. If we don’t know the answer to a customer’s question, we take his or her phone number and find out. And honestly, people are surprised at those callbacks sometimes. You do that and you’ve got a customer.
NPPM: How does Petropics help retailers succeed?
Hackett: We help the retailer understand our product and category and how to build their business within the category. We produce a lot of POS materials, tools that retailers can use within the store to educate their sales team but also at the shelf level so the customers can make quick impulse decisions. We just invested in a gravity racking system that’s free to retailers who commit to the full Tiki Cat line and Tiki Dog line. The system helps them manage their shelving, has authority signage on the fixture and provides the pricing so the retailer doesn’t have to stamp each can. We also share our marketing research and specifics about the categories and trends. In some cases, we’ve gone in and merchandised stores to help them build a shop within a shop. Even the sales reps talk to these retailers and figure out how we can better educate them and partner with them to not only place product but also how to take it to the next level.
DeLorenzo: Fruitables tries to support retailers as much as we can. We’re a very lean organization. I spend a lot of my time answering emails and phone calls from retailers and consumers. We put materials together with the category in mind and with the goal of growing the retailer’s total business, in addition to showing the differentiation and the innovation that our brand is bringing to the table.
NPPM: Is manufacturer or distributor input important?
Tronolone: If you don’t have help from the distributor, that’s one thing, but if you don’t have help from the manufacturer, that’s another thing entirely. All the help you can get from a manufacturer just snowballs your business. Patti Salladay from Northwest Naturals in Portland came out and put on a great raw diet show. Any time I can get help from a manufacturer’s rep, I take it.
NPPM: Companies such as Bed, Bath & Beyond and even L.L.Bean have entered the pet marketplace. Are you worried?
McConnell: I don’t see it as a problem. The more that’s out there, the more we as natural retailers have the opportunity to educate people and set ourselves apart. And, in the end, it’s just showing that pets are becoming more important in the world and being taken better care of.
Sebastian Tronolone and his wife, Elly, established Sebastian’s Healthy Pet Food and Supply in 1993 in Salem, Ore. They opened a second store in Sunriver, Ore., in 2009. The Salem store is managed by their son, Sebastian Jr., and daughter-in-law, Nina. Sebastian Tronolone is a former manufacturer’s representative for Precise Pet Products.
Let everybody jump in the pool and swim around. If you think there’s room for you, come on in because all it does is expose me even more. I love competition.
NPPM: What about Internet competition?
Tronolone: I run my business the way I’ve been doing it for 20 years. I’m not saying it’s the correct way, but for me it’s a successful way. We do have a website, so whatever I want to say, I put it on our website. I know my customers, I know my base.
McConnell: We don’t really worry about Internet shoppers, either, because it goes back to customer service. We often get people in here who say, ’Oh, the price was better on Amazon, but we still had to pay shipping.’ Unless it’s somebody repurchasing something, we don’t really consider that competition.
DeLorenzo: Fruitables is sold through some online retailers, but the feedback I get from the brick-and-mortar stores is that there isn’t a lot of real price differential. When you look at the shipping and handling, it kind of evens out in the end.
NPPM: What advice do you have for natural pet retailers trying to run a successful business?
Tronolone: Any entrepreneur is taking a chance. But I would say, if you want to get in, first do the research. Before I opened the first store, I worked for one of the dog food manufacturers, so I know the ins and the outs. And have a year’s worth of money in the bank before you even open that door.
McConnell: You have to have knowledge. You have to have products that you trust. You have to be able to convey that knowledge to people without offending them, without sounding pushy or bossy. You need to have good people skills, too. Product knowledge and customer service are the two most important things you can do to establish the client base, to keep them loyal and to have them tell people.
DeLorenzo: First and foremost, ensure that you are differentiating your offerings. Many retailers I speak to in the independent trade do it with customer service. From the product side, look at products that are truly innovative and look at variety within a product line, and try to reduce redundancies. The other thing is to display and merchandise products in a fashion that makes it easy for the customer to decide.
Hackett: Independents have many advantages when it comes to that customer walking in the door. Make sure you have a strong identity, a strong purpose, and make sure that message is being portrayed so customers feel valued when they walk in that door. And bring a little joy, make it fun.
Editor’s Note: The transcript has been edited for length and clarity.
This roundtable discussion originally appeared in the September 2011 issue of Natural Pet Product Merchandiser.<HOME>
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