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WEB EXCLUSIVE: Post-Recall Pet Food: Any Different?

In the year since the massive pet food recall that ensnared more than 100 brands, some in the pet food industry have made changes to reassure retailers and win back jittery consumers.
By Rose Gordon
Pet Product News International

This pallet of dog food has been tested and pronounced safe to be released. (Courtesy of Natural Balance)

When a handful of cats and dogs became sick after eating their usual bowls of pet food last March, no one could have predicted that it would lead to an overhaul of the U.S. Food and Drug Administration (FDA) or a safety import agreement with China, but then more animals became ill, some died and their owners got mad.

Lawsuits were filed and a parade of pet food industry players along with veterinarians and high-ranking FDA officials were called to hearings on Capitol Hill where some faced a public scolding from members of Congress. Pet food, however, turned out to be one of many product recalls that would begin with Chinese suppliers during the next few months.
 
Toothpaste, seafood and children’s toys all came under scrutiny. As the public struggled to keep up with the latest recall coming from China, and U.S. officials scrambled to post more inspectors at its borders, the pet industry worked to find a way back to business as usual—a business that is predicted to generate more than $16 billion in sales in 2007, up from $15.4 billion the year before, according to an estimate from the American Pet Products Manufacturers Assn.

“I think consumer confidence may be fragile right now, but it’s up from the immediate crisis,” said Bob Vetere, president of APPMA. “Everyone still has their alarms up … but it seems like business goes on. Pets have to eat. Overall I think the marketplace has adjusted.”

That adjustment didn’t happen immediately, though. It took several changes in the industry, as well as time, to bring the marketplace back to some sense of normalcy.

When the contaminants responsible for the pet food recall—melamine and cyanuric acid—were finally discovered after a few false starts, most everyone was shocked. It wasn’t an additive that anyone tested for; it wasn’t supposed to be there. Aflatoxins and other molds, salmonella, these were the things the industry was accustomed to looking for as part of its quality control.
“No amount of regulation could have stopped this adulteration,” said Duane Ekedahl, president of the Pet Food Institute, a Washington, D.C.-based association  that represents pet food manufacturers.

Testing, Testing and Retesting

China: Not the Only Boogeyman?

After last year’s pet food recall prompted increased scrutiny of Chinese-made products at the U.S. border as well as the store shelf, some say that fear is likely to continue.

Tony DeLibero, the franchisee of two Petland stores in the Detroit suburbs, says he continues to look for non-China products due to lingering concerns from his customers.

“A lot of the stuff we still get is made in China,” he said. “I think if someone took the lead on this they would do well just by that little tag that said made somewhere else.”

Although some customers still buy a package of food bearing the China label, he said they’re more likely to think twice about it.

China fatigue isn’t limited to the pet industry, though. 

“I think it’s not just with pet food, it’s with anything,” said Bob Vetere, president of the American Pet Products Manufacturers Assn. “If it says China on it, someone’s going to scratch their head a few times before they pick it up. That level of concern with Chinese anything is going to continue to affect the U.S. market.”

Less than a year before the 2007 pet food recall, however, spinach originating from California’s fields sickened people across the country. Natural Balance Pet Foods’ President Joey Herrick points out that two major pet food recalls in the last 15 years began with U.S. grains.

Since last spring’s pet food recall, pig ears from Chile were recalled due to salmonella, and botulism forced the recall of U.S.-produced canned dog food. A pet toothpaste recall, and, most recently, a recall of some bird and small animal treats that produced a melamine-positive batch test, however, both originated in China.

Although China remains in the spotlight, some say it isn’t possible to drop it entirely as a supplier.

“There are certain ingredients that we have to import,” Ekedahl said. “You wouldn’t have pet food on shelves if you didn’t import certain things.”

Vitamins and minerals, as well as some meats were two of the biggest products that those interviewed said still must come from China.

Many of Nature’s Variety’s diets have always been grain-free, and it sources grains for its Prairie Kibble Diets from within the United States, but domestic rabbit sources are inadequate so the company finds it in China, according to the company’s chief executive officer Sanford Goodman.

Natural Balance’s Herrick says all vitamins come from overseas.

“What people don’t realize is the last vitamin C plant in the U.S. closed in 2005,” he said.

Taurine, an essential amino acid for cats, which Natural Balance adds to both its dog and cat foods, comes mainly from only two countries, Herrick adds. 

“There’s only two places you can get it in volume: Japan and China, but Japan hasn’t taken on any new customers in a while,” he said.

Julie Dye, marketing director of Only Natural Pet Store in Colorado, said the negative “knee-jerk reaction” to all things China-made is unfortunate.

“Unfortunately there’s been this blanket emotion toward China … it wasn’t as if that everyone who ever had an association with China was bad,” she said. “A lot of people have great standards in China.”

What’s important, she added, is pet food industry being “able to prove themselves now.”

Although he couldn’t quantify how many companies are now testing for melamine and cyanuric acid, Ekedahl said he suspected that since the recall “virtually every company” had put some measure in place to ensure these additives didn’t end up in pet food again, whether that means performing  the tests themselves or working with their suppliers.

Vetere said a lot of pet food companies—whether involved in last year’s recall or not—were implementing stricter quality control and testing overall. Some companies even posted those testing results online or found other ways to promote their new, or old, safety measures.

Natural Balance Pet Foods of Pacoima, Calif., put a half -million dollars into a product safety program it calls “Buy with Confidence,” and it says it isn’t a temporary fix.

“This is something that we started and that we will do forever,” Joey Herrick, president of the company that bears Dick Van Patten’s name, said.

The program allows consumers to view test results of Natural Balance pet food by simply typing in the “best by” date on the package into its online database. Results from an independent laboratory and Natural Balance’s laboratory are returned on seven tests, including the additives involved in the recall, cyanuric acid and melamine, as well as aflatoxin, DON (Vomitoxin), and three more added this past December: Ochratoxin, Zearalone (ZEA) and Fumonisin.

Herrick hired a chemist, a biochemist, an additional plant manager and someone to work full-time entering test results into the online database. Expensive equipment purchases were also necessary to implement the program, Herrick said, including a $12,000 oven and $50-a-gallon water for use in one of the tests.

“Nothing leaves our warehouse unless it’s been tested,” Herrick said. “And I think it’s a great thing for consumers.”

Natural Balance also requires similar tests on the raw ingredients from its manufacturers, producing a “double-testing system,” according to Frank Koch, executive vice president of the company. Despite the expense, Herrick said it’s worth it.

“The first thing that it offers us is that at night we can sleep,” he said.

The second benefit might be financial, he added, saying that confidence in the brand has helped its sales reps.

“The last quarter has been the best one in our company’s history, and we attribute a lot to the fact that we handled the recall correctly,” he said.

Since its launch in August 2007, about 2 million people visited the Buy with Confidence website, Herrick estimated.

Additional Measures

Other companies also worked to make their testing processes more transparent since the recall.

Natural Pet Products of Santa Clara, Calif., publicized testing results for melamine and cyanuric acid directly after the recall in May 2007 and again in June and July. In September 2007, Stella & Chewy’s, a primarily raw food company based in Wisconsin, began posting on its website independent laboratory test results for E. coli and salmonella from each batch of its food.

That same month, Mulligan Stew Pet Food, which only completed its national product launch a couple months prior to the 2007 recall, began affixing an ingredient guarantee logo to its pet food cans and posting signed affidavits from it and its manufacturer online, guaranteeing the ingredient list of each batch. During the recall, Mulligan Stew said some of its products were errantly produced with rice protein concentrate, one of the ingredients that was contaminated, so the company recalled it.

“That was kind of the first wake up call for us,” said Diane Peterson, national sales and marketing director for Mulligan. “We wanted No.1 to protect our brand but No. 2 to provide that level of confidence to the consumer. They’re a lot more skittish now.”

Instead of dropping its manufacturer, Mulligan requires it to sign a piece of paper ensuring that each batch is made with only pre-approved ingredients. The list goes between the two companies each month, and each signs off on it. In addition, a Mulligan-appointed operations manager ensures the plant test and an independent lab tests for melamine and cyanuric acid, Peterson said. At press time, 185,000 cans of Mulligan Stew were stamped with the new Formulation Guarantee logo.

“The consumer is the winner here and the pets,” Peterson said. “Because they know many steps are being undertaken that is assuring that quality for them.”

The cost for the new quality assurances has been negligible, although it does create a bit more paperwork, she said.

“What it’s done is brought our company a level of credibility, which I think the industry needed, and it’s helped our company grow,” Peterson added.

(NOTE: The companies mentioned in this article represent only a portion of those manufacturers making changes. Also, several of the larger companies declined to comment for this article including Menu Foods, Procter & Gamble and Del Monte Pet Products, the latter two of which preferred to defer to what the Pet Food Institute might have to say. Some other companies, including Colgate-Palmolive’s Hills Pet Nutrition, Nestle’s Purina, Nutro and Mars Petcare did not return phone calls in time for publication.

APPMA’s Vetere says that in addition to new testing, some companies began additional record keeping, requiring more of their suppliers and even putting representatives in overseas plants. Nature’s Variety of Lincoln, Neb., is one such company. In July 2007, it added a staff member to oversee its China operations full-time, focusing on the rabbits it uses for some of its diets, according to Sanford Goodman, chief executive officer of Nature’s Variety.

The new staff member, a Ph.D. Penn State and Kansas State graduate, “is visiting facilities, doing testing, observing testing, working on enhancing protocols and he reports back to us,” Goodman said. Even before the recall (which Nature’s Variety was not involved in), however, Goodman said the company personally inspected plants in China before choosing to use them.

“What we’ve done is intensify that effort a little more,” he said.  “But we’ve never used any wheat gluten or rice protein concentrate, our products are not subject to melamine spiking.”

What’s changed most in his business is communicating more about its grain-free and U.S.-sourced products, Goodman said.

Increased communication, particularly on ingredient and source issues, from supplier to manufacturer and manufacturer to retailer certainly seems to play a starring role in the pet industry since the recall.

Spending More Time on Communication
At Bio Biscuit in Quebec, Canada, Marie-Claude Dubuc, director of marketing, said that although the company does not buy its ingredients from China, it had to explain its business practices to customers more than in the past simply due to its relative proximity to Menu Foods, the manufacturer that initiated the recall.

“We had to change the message on the website,” she said. “We explained where we sourced our raw materials, saying we aren’t involved with the recall. We had to manage a lot of phone calls at the time.”

Her private-label customers are also more apt to ask for certain physical guarantees.

“All of our customers are asking for certificate of origins of raw material,” she said. “It’s been beneficial for us.”

Robert Kelly, president of Bil-Jac Foods in Medina, Ohio, said that his company has always produced and talked about its gluten-free meals, but since wheat gluten was implicated in the recall, he spends a little more time and money letting people know about it.

“We did a little more advertising this year, because we’ve been asked about it more,” he said. “All of sudden, people listen differently because it was in the news.”

To further ensure product safety, Kelly says he spends more time in the company’s two U.S. plants inspecting finished products and ingredients than anywhere else.

“We’ve got great people, but I’m always overlooking them,” he said.

Although his company wasn’t involved in the recall, Kelly said it definitely affected the entire industry.

“Everyone’s asking more questions than they did before,” he said. “It’s just a matter of paying attention of what’s going on, and I believe everyone in the industry is doing that. It changed the atmosphere of the way we do business in the pet food industry.”

APPMA’s Vetere sees these as positive changes for the industry.

“I think that you’re seeing people be more aware and asking more questions,” he said. “If there was a positive impact of the recall I think it’s this overall increase in awareness and diligence.”

“Natural” Foods Still Grabbing More Marketshare?

In the immediate aftermath of the pet food recall, many manufacturers producing pet food marketed as “natural” or labeled organic or grain-free saw sales grow rapidly as consumers looked to alternatives from their mainstay brands. Some experienced tremendous growth, quoting figures of double or triple-digit increases.

“I think the rising tide lifted us as it did many others in the segment,” said Nature’s Variety’s chief executive officer Sanford Goodman said. “We definitely experience a boost in sales.”

Bob Vetere, president of the American Pet Products Manufacturers Assn. agreed.

“A lot of people jumped into the organic and natural market and that helped that segment,” he said.

Julie Dye, director of marketing at Colorado-based online retailer Only Natural Pet, said she also noticed tremendous growth in grain-free products and interest in the organic market even over those labeled as “natural.” Some of her product lines had quadruple growth. In addition, in 2006 the company carried about two lines advertising as grain-free and now it’s more like 10, she said.

Dye expects that as more companies become interested in the growing opportunities in the natural market, there will also be new ways to distinguish the products, such as a labeling and third-party verification system. As demand for things like organic chicken increases, expect prices to rise, too, she noted.

Also noting the expense of some of these “natural” products, Vetere said he believes many pet owners did not and cannot commit permanently to that market, particularly given the current gloomy forecast for the U.S. economy.

“I think as people feel more comfortable, a lot of folks have gone back to their own spending habit. This isn’t to say natural and organic didn’t and doesn’t continue to enjoy higher sales,” he said.

As early as two months after the 2007 pet food recall began, a survey by the Pet Food Institute, a Washington, D.C.-based association that represents pet food manufacturers, showed that as many as 70 percent of pet owners to respond to polling (done by a third party) said they were confident in pet food and would return to purchasing their primary brand.

Dye, however, says that once a pet owner sees the benefit of a particular product, she is unlikely to turn her back on it.

“Natural tends to be something that people don’t give up,” she said. “They’re going to stay with those products.”

Retailers Want More Assurances
Despite these changes, some retailers say they want more changes.

Michael Levy, owner and founder of Pet Food Express, a 33-store chain of pet stores in the San Francisco area, says his customers trust him even more in the wake of the recall due to his proactive approach during that time, but now he would like to see more transparency from manufacturers.

“I would like for manufacturers to reveal where their food is made,” he said. “A number of them already do, but not all of them. We would like them to document what they do for food quality and safety and provide testing and audit results on a regular basis, demonstrating that they’re in fact doing this.”

In fact, he discontinued two entire product lines from what he said are popular, mainstream diets, because the manufacturers couldn’t produce the test results he wanted. Levy says he will also begin in-house lead testing for all dog and cat chews and toys by May 31.

“We’re finding it very difficult to get really specific information on protocols and testing from various food manufacturers,” Levy said. “There are still a number of food manufacturers that make or have good quality foods that don’t want to reveal who their co-packer is, and I personally think that’s ridiculous.”

Julie Dye, director of marketing at online retailer Only Natural Pet, said the Colorado company also removed a company’s entire line of pet food from its inventory due to incomplete test results.

“I think a basic honesty is a real big deal,” she said.

In choosing companies to work with, Dye says Only Natural looks for a “transparency of the ingredients, of the manufacturing process… standing by their products…guarantees.”

Michael Levy at Pet Food Express in the Bay Area of California still hopes more companies will let people know where pet food ingredients come from.
To meet some of those challenges, the Pet Food Institute expects to release an industry guide on best practices, including quality assurances and testing protocols. Its National Pet Food Commission already submitted suggestions for industry changes to the government and the industry, Ekedahl points out, and the best practices might be ready as early as its board meeting in March.

“The general feeling is there’s going to be a local system that is certified to certify … and China is certainly moving this way,” the Pet Food Institute’s Ekedahl said. “The government has to assume the responsibility of qualifying products that are going into the U.S. … We are in the process of what will be major changes in legislature.”

One the biggest pieces of legislation is the Food and Drug Amendments Act of 2007, which established a mandate to implement federal pet food safety standards and an early warning system that identifies pet food contamination within two years.

Many in the pet food industry, however, say every day is a new opportunity to win back the consumer with safe products.

“I think one of things that we have to do going forward is being ever vigilant of new contaminants,” said Frank Koch, executive vice president of Natural Balance. “Every time we identify a new contaminant we need to get it into our testing.”

Nature’s Variety’s Goodman agrees.

“As we go through 2008, our plan is a continual improvement of our processes and products,” he said. “You can’t sit still; it’s always got to be continuous improvement.” <HOME> 


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