Australian Convenience Store News - Pet Food - Pet Food a Purr-fect Product

Think back a few years and large bags of dry dog food were a common sight on service station forecourts. Not any more.

It turns out that many operators had over-faced the offering, disproportionate to its volume of sales and the space it deserved - and not just outside but also on the shelves. Product sitting around without earning is bad category management, but that doesn't mean it should disappear altogether. In reasonable quantities, pet food will make a contribution to the bottom line but the trick is getting it right.

"No-one is going to buy a week's worth of food for Rover or Tibbles at a c-store," says one industry expert who didn't want to be named.

"But if they drop in to get some bread and milk and suddenly remember there's nothing in the cupboard for man's best friend, they will grab a can. For that reason you don't need to stock the whole range, nor do you need to aim for the budget brands.

"Check the margins and stock the premium stuff and just allocate the amount of space it deserves against the return it provides you. If the customer needs it, they'll buy it."

Nestle Purina Petcare's Cathal Walsh agrees with the sentiments expressed. Mr Walsh, who is the company's business development manager, says a petfood offering is a vital inclusion in a c-store's range.

"This is not a spontaneous purchase, but it is something that should be in stock if you aim to cater for all your customers' needs - Australians love their pets! Go for a premium product and make sure you have a range - even if it's small - of dry and wet product for cats and dogs. Products like our Fancy Feast single serves are ideal because the 85g cans don't take up too much shelf space and are very fast sellers, as you'd expect from the market leader."

Premium products have another advantage - they are gaining in popularity as the trend towards healthier eating amongst the human race ensures that pet owners have become more concerned about the nutritional needs of their animals and the quality of what they're eating.

An Opportunity for Building Sales

From a situation where the product had almost disappeared from route, most pet food manufacturers now realise it's a very viable opportunity for building sales. The result is a number of products that are easy to store and manage, with a margin that makes it worthwhile.

Industry figures (across the board) show the market trend is towards dry food with the growth in the category being driven by dry food (for dogs and cats) and treats. 'Wet' categories are, in general, declining.

Recent figures on dry cat food showed a 26.6 per cent rise in the market (four weeks to May 12). Go Cat is the leader with 34.3 per cent of market share with Whiskas and Cat Meow further back.

'Wet' cat food can be segmented into single serve and multi-serve, and the single-serve segment is driving the market with MAT growth of 23.2 per cent. Within this market, Fancy Feast is the leading brand (premium), followed by Whiskas singles (mainstream) and further behind is Dine Petite Gold (premium). The multi-serve segment (the traditional 400g cans) is still the larger segment but is declining (-3.4 per cent growth) and in this segment, Whiskas is the major brand with a 50 per cent share.

In dog food, the split between wet and dry is 66 to 34 per cent. As with the cat food sector, dry food is driving the overall growth with a 7.3 per cent increase in sales compared to 2.5 per cent for wet. The brand leader in dry dog food is Meaty Bites, which has a 30.5 per cent share but declining. The next brand is Lucky Dog with a 17.9 per cent share and increasing.

Wet dog food is dominated by Pedigree (34.4 per cent) and My Dog (18 per cent). Treats is the segment that is experiencing the strongest growth at 19.7 per cent over the MAT period. Within this group, Schmackos has a 41.7 per cent share followed by Lucky Dog Bones (biscuits) with 11.1 per cent.

The figures would suggest that having a small section of the store dedicated to some premium pet food brands would be the best way to keep the pet-owning customer satisfied, as well as your accountant.

Utilise PoS & Promotions

Because the manufacturers are now much more aware of the potential of C-stores as an outlet, you'll find the majors have a wide selection of POS material to alert your customers of what's in store.

The beauty of the trend to dry food and premium wet food brands in cans is the ease of storage and display. There are no food handling issues to be concerned about. They also do not require premium positioning on the shelves, but POS pointers to their availability will help drive the sales.

"Obviously, pet food is not the type of product you would have next to the checkout but it makes sense to let your customers know you have a range available," says Nestle's Mr Walsh.

"Utilise the POS material your supplier has to offer and keep in touch with any special promotions that are underway. Route is now recognised by the petfood industry as a really good avenue for our products, so it will be getting a lot more attention. Take advantage of that and use the products to improve your bottom line."

A little bit of history

Interestingly, history has it that the very first commercially prepared pet food was a dog biscuit made by James Spratt of Cincinatti, Ohio, who introduced it to the US and the UK in 1860. The first canned foods for dogs were introduced in the US; a British company began production in 1930, canning a meat and cereal mix. Since then, pet foods have expanded to include canned, dry and semi-moist to meet a wide variety of nutritional needs.

According to the most recent figures, Australians spent around $2.1 billion (total, including non-grocery) on feeding their pets last year. Figures from the UK from last year suggest our British counterparts spent just under $3 billion on feeding their animals, while the US market is worth a staggering $US11billion.