Executive Interview: Q&A with Sharon Sherman President/co-founder - PetGuard

One of the most recent categories in the Health Food channel to experience double digit growth is pet products, and as a cofounder of Pet Guard 25 years ago, Sharon Sherman is largely responsible. She also has a history of industry leadership: Sharon has been very active in the NNFA SE division (SOHO) for well over 30 years, beginning as a retailer in 1972. After many years on the regional board, she now serves on the Natural Products Association (formerly NNFA) national board.

You started as a retailer in 1972. How did you evolve into the manufacturing end and start PetGuard?

Growing up in a household with pets and watching my mother daily prepare healthy meals for our family and for our pets, I learned early-on to be a passionate believer in the relationship between wholesome natural food and good health for people and their pets.

Moving forward and dating back to the 1970’s, as a health food retailer, I regularly participated in a local radio call-in show that discussed the growing interest in all-natural foods. Callers were expressing concerns not only for the chemicals, preservatives and pesticide residues in their own foods and the impact upon their own health but the quality of products available for their pets as well.

The PetGuard Company is actually an extension of my experiences as a health food retailer and a consciously aware pet parent. Daily, I would listen to customers expressing quality of life concerns and reflected upon the similar comments I was hearing from radio callers. Consumers were pleased that there was an increasing availability of all-natural foods and supplements for humans. All-natural products to address the preventive health needs of the family pet were non-existent, however. We saw a clear need to provide a healthful alternative to the pet foods, supplements and grooming aids that were available at that time.

These conversations and reflections upon the wonderfully healthful meals that were prepared for our pets as I grew up became the genesis for all-natural and chemical-free supplements and foods for pets, products with the same high quality, all-natural ingredients that are so helpful to humans.

Out of this need, we developed the vision for formulating the finest in all-natural dog and cat foods, supplements and grooming products. In 1979, PetGuard was formed to address this need and set the standard for quality pet food and supplements, products that would strengthen the immune system based on formulations using human-quality, all-natural ingredients, free of animal by-products , fillers, artificial sweeteners, colors and preservatives.

At the time, this was a novel idea and raised quite a few eyebrows within the pet industry. There were non-believers, of course, but over the years, consumer interest, education and the unprecedented growth of the natural foods industry have validated that the need existed then as it does today.

This category is growing in the health food channel. How has that sector of the industry evolved?

The growth of all-natural pet foods has been gradual and mirrors that of the natural foods industry as a whole. Within the past several years, however, mainstream consumers have become very concerned about health issues related to feeding the family highly processed, chemically driven foods. These concerns have created the opportunity to educate and stimulate greater awareness of the relationship between nutritionally sound, additive-free food not only for the family but for the family pet as well. Educating consumers about the values of natural pet foods and the beneficial impact on pet health has helped to raise the consciousness level of how people feed and care for their pet companions.

What challenges does the pet products industry face in the health food channel? What advantages do you have?

As a former natural foods retailer, I see PetGuard’s distinct advantage is that we have the background to understand the consumer’s health concerns and buying habits as related to the natural foods industry. The PetGuard commitment is to offer the appropriate products and support to the small business owner and emerging natural foods retailers nationally.

Early on, many believed that those who championed natural foods represented a fringe movement promulgated by the few. Today, the tremendous growth and demand for natural and organic products has mainstreamed, having a major impact on redirecting consumer attitudes towards positive health maintenance, a demand for safer and more humane farming practices, more abundant natural food selections and fewer processed foods for themselves and for their companion pets.

For a growing number of consumers, the desire to purchase natural and organic products is a front-burner issue. It is estimated that nearly seventy percent of US consumers purchased organic foods in 2005. Assuring that agricultural interests can meet future demands for raw ingredients is imperative to provide a growing customer base with the products they want at a reasonable price. All-natural and organic farming is very labor intensive. Cultivating additional acreage for ‘clean farming’ is a slow and expensive process, given the lower yields per acre and especially lacking the government subsidies enjoyed by many multinational agribusinesses using traditional farming methods.

Internally, it is important that the industry maintain its own levels of high standards of integrity and protect itself against attempts to dilute protective regulations already in place, redefine terms or alter the ingredients that truly qualify as all natural foods.

There are significant differences between the ingredients in all natural pet food and the ingredients in what has been traditionally called ‘mainstream’ pet foods that have lined the shelves of every grocery store for decades. As Ann Martin wrote in Food Pets Die For, most of those formulations are based upon meat by-product ingredients, which may include animal lungs, spleens, blood and intestine. Lung organ, for example, possibly riddled with pneumonia or tuberculosis, would be unacceptable for human consumption but can be used in pet foods. On the other hand, some so-called pet foods, branded as being natural just may meet the labeling standard but the ingredient list will indicate the quality of their ‘natural’ product. It seems that reading the ingredient panel on every product becomes more and more important every day. While I was in the grocery the other day, a kind demo person was offering samples of a new ‘natural’ dog food. A quick check showed the first ingredient was ‘milled corn’, certainly natural but hardly nutritionally complete.

PetGuard’s all- natural food ingredients are disease free and essentially are ingredients that in another form could be found on any family’s dinner table. PetGuard natural formulations use fresh, wholesome antibiotic-free meats and hormone-free chicken products, not diseased meat by- products and certainly no products contaminated by parasites or artificial preservatives. More and more consumers are becoming aware of these differences just as they recognize if the main ingredient in their family’s dinner is ‘milled corn’, their dinner is nutritionally invalid.
Nutritionally conscious shoppers must recognize the mindfields of new, so-called ‘all-natural’ products many of which are actually wolves in sheep’s clothing. Consumers need to consider not only ingredient quality but also avoid being deceived by a company’s clever marketing. As pet parents, we all must discern if those behind the products are simply product marketers or genuinely committed to quality products for optimum pet health.

What kind of growth have you experienced?

PetGuard’s success can be measured in a variety of ways. Domestically, the pet category has received significant interest, driven by consumer awareness and the ever expanding customer base. Natural food retailers have begun to expand their pet sections and retailers, who in the past did not recognize the need, are beginning to realize that caring for their customer’s pet naturally is more than just a statement. Each PetGuard product has been created out of a need, not a marketed driven effort to ride the wave of a trendy health topic.

Seventy million homes in this country feed at least one pet. Pet food sales for 2006 are estimated to be over $15 billion and a projected increase of 5-6% per year through 2010. PetGuard has been at the forefront of the natural pet food market and has helped fuel industry growth. Over the years our facilities and staff have increased to parallel industry growth. In 1979, PetGuard products could be found in a few independent natural foods stores. There are now over 10,000 health and natural food stores, nutritionally concerned pet stores and holistic and mainstream veterinary clinics nationally that feature PetGuard products.

Again this year, according to the SPINS data, PetGuard remains the category leader. We are also very pleased to learn from Vitamin Retailer Magazine that in the pet supplement category, PetGuard’s Yeast and Garlic Supplement, which was the very first PetGuard product to be marketed back in 1979, has been honored by the health food industry with the gold medal VITY Award for the fifth consecutive year as the best selling pet supplement product in its category.

PetGuard products are also now entering the Asian market and are being exceptionally well received. Consumer concerns regarding food issues, human as well as canine and feline, are very much a concern throughout Asia as they are in our country.

How are pet products regulated?

The Association of American Feed Control Officials (AAFCO), an arm of the FDA, is the regulating authority for pet food products. The purpose of AAFCO is to offer consumer protection by enforcing the laws regulating the production, labeling, distribution and sale of animal feed to assure that equitable and uniform standards are met relative to the safety of product ingredients. AAFCO formulates policies and develops regulatory and enforcement guidelines and coordinates communication among members as it regards compliance issues within the industry.

How is the pet sector the same and/or different from human-targeted retail product sales?

In our minds, there is no difference. Pets rely on humans for their care. Today’s consumers more and more are learning about the values of healthy eating and focusing on foods that are hormone-free, products with pesticide-free grains, for example. It is this same mindset that is reflected in the products they are seeking for the family pet. Humans are targeting PetGuard products with the same healthy ingredient list they are seeking for themselves to maintain pet health and optimum growth and longevity.

What does it take to be a ‘successful’ product in this sector? How much consumer messaging and what type is required? How much ‘science’?

It is certainly more complex than simply introducing a new product which in today’s environment tends to be a rather arduous task. After twenty eight years, I have learned the value of extensive research of ingredients and ingredient sources and the importance that each nutrient serves as a part of the overall nutrient profile.

Keeping abreast of emerging issues, maintaining focus, having compassion for pets and listening to consumers will reflect on a product’s success. Blending the AAFCO nutritional requirements with the highest efficacy in ingredient formulation sends a very clear message to consumers about product quality.

Where will the pet products category go in the next several years?

Continued attention and expansion of the products available so pets can enjoy the same health benefits as humans is paramount. Demographics are changing, with older citizens, smaller families and a larger singles population. More and more, the lives of consumers are being enriched by the companionship of a family pet. As these population sectors increase, the demands to provide healthy foods for these pets increase as well. Consumers are concerned with the relationship between nutrition and their health. Minimizing toxic chemicals in our environment and sensitivity for improving our lifestyles extend to our pets as well. There is science backing what we pet lovers have always known: People need pets. Pets promote family bonding and help relieve daily stress.

How is this sector preventing some of the credibility issues facing the rest of the natural products industry?

The USDA has established a taskforce to set standards for organic pet products. One goal would be to maintain credibility and integrity in the formulation of organic pet foods. I have served on this task force for over a year and am encouraged by the overall commitment to develop high standards to mirror the standards for organic foods consumers presently enjoy. AAFCO, an arm of the FDA, regulates labeling and distribution of pet products. The governance by these agencies helps to minimize controversy. However, actual ingredients may vary from manufacturer to manufacturer as does the ingredient quality. Many approved ingredients would be deemed unacceptable by the natural foods retailer. For this reason, it is important, especially with so many companies entering this category, that retailers read the ingredient panels of products before placing them on their shelves and support those companies that reflect their own natural foods philosophy.

How important are external relationships? (vets etc.) Who manages these relationships?

External relationships are extremely important. PetGuard’s customer service department manages outside communication with consumers and veterinarians and works closely with retailers from promotions to answering questions regarding specific products. PetGuard is active within the natural foods industry and the holistic veterinary communities nationally to promote animal health awareness. PetGuard supports the efforts of local organizations nationally who promote the ideal of humane treatment of animals. Also, PetGuard is very active on the regional and national levels, serving on various boards and committees focused on issues that affect the natural foods industry.

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