Natural Foods Merchandiser

Customers roll over for healthy pet treats and toys

by Shara Rutberg

"They're delicious! I've been eating them all morning," says Norman Levitz, co-founder of Wagatha's dog treat bakery, between bites of fresh-from-the-oven Wheat and Lactose Free Breakfast Biscuits. The certified organic and kosher dog treats are made from human-grade ingredients from recipes designed by Levitz, a former culinary instructor at Johnson & Wales University. "Our production line's up to human standards. And that's a big part of it for us. We want our consumers to be able to trust that they're buying a quality, nutritious product. And, they're delicious. We eat them all the time."

With a jolt from last year's pet food recall, the category's growth reflects the public's growing interest in natural products.

Not everyone may be into snacking on dog biscuits, but consumers are gobbling up pet treats and toys like a Lab let loose at an unattended picnic spread. Similar to last year, pet treats and snacks make up one of the fastest-growing categories in naturals stores. In 2007, the category, which includes everything from shakers of organic catnip to caramel-chicken-flavored popcorn for dogs, raked in $11.5 million, an increase of about 16 percent, according to SPINS, a Schaumburg, Ill.-based market research firm focused on naturals. In the past few years, the number of new organic and natural pet products, including toys, has shot up like a tabby up a tree. According to Rockville, Md.-based market research firm Packaged Facts, the number of new products introduced exploded, growing from 92 items in 2000 to 288 in 2006.

With a jolt from last year's pet food recall, the category's growth reflects the public's growing interest in natural products. "The way people have been looking at pet treats mirrors how they treat themselves," says Mark Shuster, vice president of marketing at Old Mother Hubbard, the Tewksbury, Mass.-based manufacturer that has been baking pet treats for 80 years, including the Wellness line of dog treats. "People who may have been eating Fritos five years back are now eating fruit bars. And they're taking that same thought process to how they're treating pets."

Fetching ingredients
"People who buy our treats know food," says Jasmine Lybrand, founder of Seattle-based Wet Noses, which bakes certified organic dog biscuits. "They're looking for quality ingredients. And they're looking for ‘Made in the USA.'"

Just as critical is what consumers are not looking for. After last year's scare, which involved tainted wheat gluten, more people are looking for wheat-free products. "Wheat flour and wheat gluten are two totally different animals, but they're linked in customers' minds," says Levitz, who notes that many manufacturers have been emphasizing their wheat-free ingredient lists. "And we don't want any barriers to prevent customers from bringing our biscuits into their homes," which is the main reasoning behind the Manchester Center, Vt.-based company's kosher certification (not dogs with separate bowls for milk- and meat-based kibble).

Pets, like people, can suffer from food allergies. "Corn, wheat and soy are the three things dogs seem to be most allergic to," Lybrand says. Other ingredients, like lactose, can cause a lot of upset furry tummies. "It's all about digestibility," she says. Food intolerances account for the rising popularity of the fish- and potato-based diet for dogs, says Brett Gibson. Gibson, the president of Anchorage, Alaska-based Arctic Paws, makers of Yummy Chummies salmon snacks for dogs, tries to locally source his ingredients whenever possible because of his personal ethics and consumer concern. This summer, he's switching from wheat flour to flour made from Alaskan-grown barley.

While most companies look to pets' main entrees for functional foods, there is a growing segment of more purposeful pet snacks.

Biscuits with benefits
Today, there are treats formulated to help your kitty shake those sassy hips or help reduce your hound's dreaded biscuit breath. While most companies look to pets' main entrees for functional foods, Shuster says, there is a growing segment of more purposeful pet snacks, like Zuke's Cat Hip Action and Dogswell's Breathies treats for dogs. Omega-3 and -6 fatty acids are getting more attention in the food aisles for pets as well as people. "There's definitely more of a focus in the market on them," says Gibson, whose wild salmon Yummy Chummies are packed with omegas.

The main function of pet treats, however, still seems to be happy tail-wagging. And that requires yumminess. Flavors have gotten more and more gourmet, and that requires a lot of taste-testing. Wet Noses' sweet potato curry treats are one of the company's fastest-growing flavors. "It's mild curry powder and dogs love them," Lybrand says. "We know a lot of picky dogs," referring to her product-testing team, but it often comes down to Bailey, a black Lab mix, the "Mikey" of mutts. Lybrand figures if Bailey likes it, so will the masses.

The Thomas effect
Beyond the big bags of food or kitty litter, which are only purchased every month or so, consumers might grab toys and treats for their pets every time they're in the store. "Unlike children, dogs need toys all their lives," says Jean Chae, director of new business development at Brooklyn, N.Y.-based Simply Fido, creators of plush organic dog toys.

Last year's recalls of kids' products such as Thomas the Tank Engine toys had a spillover effect in the pet toy market. "The big question became, ‘Where is it made?'" says Ryan Buck, customer service specialist at West Paw Designs, which makes eco-friendly dog and cat toys in Bozeman, Mont.

The team at Simply Fido is doing everything organically possible to overcome consumers' fear of products manufactured in China. The company built its own factory in Shanghai to ensure the integrity of its floppy dog toys and the organic baby toys it produces on the same line. "We're one of the few eco-friendly factories in China. We only produce organic products," Chae says. The company uses organic herbs to dye organic cotton and hemp in a factory with a built-in water purification system that turns the water used in the process into drinking water. The toys go through metal detectors and UV light sterilization as added precautions.

"Sadly, there's not a strong regulatory agency for pet products. People can make anything and put it out there. It's scary," she says. "Like babies, anything you give a dog goes straight to their mouths; they love to shred things and can end up eating toys."

Simply Fido's toys are 100 percent biodegradable. Other companies have developed their own recycled and recyclable material. In 2000, West Paw created Zogoflex, the super-durable stuff they use to make their toys. The rubber-based material is completely recyclable. Customers can send back worn toys for recycling. The company's newest Zogoflex creation, the Tux, a tripod-shaped object with an opening in back for treats, has already sold out of its first production run. The company's fleecy cat toys are made from 85 percent recycled post-consumer plastic bottles. Planet Dog's Recycle BALL and Recycle BONE are made from Orbee-tuff (the company's eco-friendly material) scraps left over from the manufacture of other toys. They sport a "Reduce. Reuse. Rewoof." swirling-arrow logo. Hyper Products crafts its Woodys, dumbbell-shaped floating fetch toys, from sustainably harvested rubberwood, says Ward Myers, president of the Wayzata, Minn.-based company.

"There's not a strong regulatory agency for pet products. People can make anything and put it out there. It's scary."

Toys that can be packed with treats, like the Tux, Planet Dog's line of Orbee-Tuff products with Treat Spots, and FatCat's line of soft toys that can be refilled with the company's Zoom Around the Room organic catnip, bring customers back to the store for more "stuffing."

Once they're in the store, there are lots of ways to attract their attention to packs of treats. "Baskets, shelf extenders, clip strips, multiple placements around the store, anything you can do to take advantage of the fact that treats are mostly impulse products. There's so many cross-merchandising opportunities," says Wellness' Shuster, who also suggests displaying packs near checkout. "These are impulse buys that are a way to reward pets, and a category where customers can trade up and still not break the bank. Plus, they're a great gateway to the brand. Displays like the clip strips take up so little space and can be a very profitable thing for store owners because they utilize space that otherwise would not be used."

Margot Kenly, founder of Blue Dog Bakery in Seattle, says there is, however, a danger to be aware of regarding pet treats. "I've had more than one buyer tell me, ‘The biggest problem I've had with dog treats is my husband!'" she says. "'He just keeps giving the dog more!'" For those who have trouble resisting puppy-dog eyes begging for Blue Dog's peanut butter and molasses premium treats, Kenly created the 100-calorie pack, containing 10 quarter-sized snacks. Rather than fighting pet obesity, "It really comes down to convenience," says Kenly. "You can take them in your pocket, keep one in the car, one in your bag and give one to your family, and tell them: ‘This is all Boopsie can have today.'"

Pet Treats and Snacks

Pet Treats and Snacks 2

Natural growth-top 5

Natural sales-top 5

Natural Foods Merchandiser volume XXVIII/number 6/p. 40,42,44

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