Ingredients suppliers and product developers can no longer afford to ignore the fortified pet food and supplements market. Shane Starling investigates opportunities in the booming pet care market
If the functional food and nutraceutical industry is driven by that human desire for greater health and well-being, it is only natural to want the same for our cherished pets.
No longer content to feed furry friends food that does little more than meet their caloric needs, pet owners' dietary concerns are driving a proliferation of functional pet foods and supplements designed to perform functions as varied as improving the sheen of an animal's coat, to combating eye degeneration and prolonging its lifespan. This is not to mention catering to its age, its sex, its size, whether or not it is pregnant and the amount of exercise it gets.
"Consumers are seeing the adverts on television; for example, a cat food claiming bone-health benefits, and then suddenly every pet food manufacturer is doing something for bone health," says Kaare Axelson, marketing director at UK-based ingredients supplier, Buckton Scott Group. "The pet food manufacturers then add the ingredient to all their products, and in this way the market [for functional pet foods] keeps getting bigger and bigger."
Bigger indeed. According to the UK-based Pet Food Manufacturers' Association, UK sales of cat, dog and bird foods were estimated at around $2.2 billion in 2001, while US cat and dog food sales in the same period topped $11 billion, according to the US-based Pet Food Institute. The functional slice of this pie is expanding.
Leverage R & D
For ingredients suppliers, the burgeoning functional pet food and nutraceuticals (shall we call them petraceuticals?) market is providing a lucrative means of leveraging research and development they might otherwise have carried out exclusively on ingredients for the human market. Other ingredients have been specifically designed for the animal world in the form of feed, or for pets themselves—usually dogs, cats, birds and horses.
According to Niall McStay, national sales manager at BASF in New Jersey, ingredients suppliers cannot afford to ignore the fortified pet food and supplements market.
"As people become more affluent, their pets become much more of a family member," he observes. "People have moved from feeding their pets table scraps to providing them with the best-quality food they can get their hands on. For this reason, the demand for nutritious pet foods that have recognition and visibility with pet owners has never been greater."
For BASF, this translates into greater demand for its range of antioxidants and vitamins. "We have seen that pet owners are attracted to foods with messages related to high levels of antioxidant vitamins. This has led to a trend in which pet food manufacturers are increasing their fortification levels of vitamins like A, C and E and ingredients like beta-carotene. Many functional food ingredients that have attracted attention on the human side have found their way into pet foods."
Minnesota-based Cargill Health and Food Technologies has been similarly enthused by the buoyant market. "We are surprised but encouraged by the fact that pet food companies are interested in adding more value to their pet food products in the same way that food companies have done for consumers," says Director of Sales and Marketing Steve Snyder. "Of particular interest to us is joint health, and we are doing a good trade in ingredients such as chondroitin sulfate and glucosamine."
Other ingredients that are increasingly finding their way into pet foods include pre- and probiotics, conjugated linoleic acid (CLA), lutein, hypoallergenics, sterol esters and isoflavones.
Many of these ingredients have clinical backing, but it does not necessarily follow that all ingredients proven effective in the human field will perform as effectively among pets.
"The question is: Are you taking consumer nutrients and putting them in pet foods, or are you are putting research resources directed specifically toward the pet food segment?" Snyder asks rhetorically. "Almost all functional foods and supplements designed for humans have undergone testing on animals at one point or another, but that does not necessarily mean that research is relevant for companion animals. The problem is, this kind of research isn't cheap and may increase the cost of the pet food nutrients," he adds.
British pet food industry consultant Terry Plant agrees. "When breakthroughs are made with human foods, then obviously people are quickly looking to see whether it works in the pet sector. The human food area is more developed because there are more companies involved and there is more academic research available, whereas research on pets is few and far between."
In the UK, this problem is compounded by the five principle veterinarian schools concentrating their research efforts on livestock and horses.
In Plant's view, the onus is on ingredients suppliers and pet food manufacturers to conduct their own research. "If a company is working ethically, it should have done sufficient feeding studies to demonstrate the alleged benefits of feeding that species with that particular product." Some pet food manufacturers run their own in-house evaluation programmes, he notes.
Others, like British niche pet food producer Denes Natural Pet Care Ltd., consider themselves too small to be engaging in extensive scientific research."We don't have a big technical department, but obviously we take note of the science that is being carried out," says spokesperson Jill Winch. For this reason, the company takes a conservative position when it comes to fortification, preferring to sell 'medicinal' products in the form of supplements. "We do add herbs to our foods, which helps with good health, but it's not medicinal in any way because the herbal quantities are too low. They can help with aroma and taste rather than targeting specific conditions," she continues. Dandelion leaf, parsley and garlic are some of the ingredients Denes adds to its foods.
When formulating foods, manufacturers need to remember that not all pets are the same—what may be good for Fido may not be so good for Felix. "Cats don't have a very high turnover of protein compared to dogs because they are less active," says Axelson. "So there are certain things you can give to dogs that you couldn't give to cats. Acids, by way of example, don't tend to go too well in cat food."
Custom Blends Fetch Profits
The benefits of sound research go beyond validating the safety and efficacy of pet foods and their ingredients. There is a potential marketing boon as well. Consumers have never been more interested in, nor more skeptical of, the contents of the products they buy, whether for themselves or for their pets. With this in mind, the provision of solid science is often the affirmation they are looking for when choosing between products, and research has shown that more and more consumers are willing to pay a price premium for the conscience-easing knowledge they are feeding their pet food that does exactly what it says on the label.
McStay says: "The companies that have done best are those that are able to back up their marketing messages with sound research—which means trials on the animals in question. Consumers will definitely pay for what they see as a better product."
For this reason, companies like BASF have tailored their operations to meet the peculiar needs of the pet food industry. "Our forte is providing custom-blended premixes," McStay says. "These contain a range of nutrients, primarily vitamins, but also other functional ingredients like beta-carotene that pet food manufacturers specify and we customise into a mix."
Such customisation has assisted BASF's exporting ambitions. "The pet food industry is highly developed in the US. We have access not only to very good nutrient technology, but also low-cost and high-quality ingredients," McStay points out. "So the US has been good at taking that technology and exporting it. US producers have been there to fill a worldwide need, and we have seen healthy ingredient demand growth in Asia, South America and Europe."
Products designed to meet a pets age-specific needs is another growth area. According to Anthony Almada, a nutrition and exercise biochemist and founder of California-based industry consultancy IMAGInutrition, this market reflects the increased understanding pet owners have of their animal companions' needs.
"Foods now are tailored to the life-stage of an animal," he says. "For instance, older dogs do not need as many calories. They are less active and require less protein. So we can boost calcium to help the bones. This is the thinking behind many pet foods now."
And it's not just age. "Segmentation of the market is becoming more prevalent," says Axelson. "Take dogs. You have small dogs, medium, large. You have puppies, young dogs and old dogs. There are sporting dogs, working dogs, domestic dogs. All have peculiar needs and now there are products to meet these needs."
Capitalising On Trends
With the proliferation of ingredients and products, there are many new bonds forged between pet food manufacturers and ingredients suppliers. "Talking to food manufacturers has given us many insights into understanding the pet food market, [especially] the fact that consumers think about their pets in the same way they think about their own health," says Snyder.
Such bonds are no doubt helping manufacturers get it right when it comes to pet supplements, a small but growing market sector ($26 million in the US in 2001, according to Mintel International Group Ltd., offices in London and Chicago).
"There are many health problems that can be avoided by adding supplements to pet food," Axelson says, noting that pet owners are increasingly willing to add nutrients to prepackaged pet foods, something that doesn't bother a manufacturer like Denes. "We like to separate the medicinal products from our food products anyway," says Winch. "We have a range of herbal medicines and supplements, and we think it is better for those to be administered separately rather than included in food because the dosages can be more closely monitored and can be tailored to the individual animal."
Another trend is being driven by consumer desire for convenience. Single-serve pouches of dry foods are increasingly in vogue with consumers who don't want their kitchen smelling of pet food or half-empty cans left in the fridge.
Formulating dry foods brings its own unique dilemmas. "Dry products are ex-truded products, so pet food manufacturers have to think about how the various ingredients perform after they have been heated and extruded," says McStay.
And of course, under most legislatures, pet foods labels cannot have claims to prevent, treat or cure any ailment a pet may have.
Not yet, anyway.
Buckton Scott Group: www.buckton.com
Pet Foods Mfr's Assoc: www.pfma.com
Pet Food Institute: www.petfoodinstitute.org
Denes Natural Pet Care: www.denes.com