Herbal bladder-control capsules for dogs. All-natural anti-anxiety chews for cats. Joint-relief supplements for horses. Take a walk through any pet store, natural foods store or veterinarian's lobby and you'll discover that the complementary medicine revolution is slowly making its way to the animal world, in large part through the sale of dietary supplements for dogs, cats, horses and other animals. You'll also see that many of the companies long dedicated to creating dietary supplements for humans now make products for animals as well and are doing a pretty good job of penetrating the pet supplement market.
Animal supplements represent “a relatively cluttered category with very few strong leaders and the potential to grow as fast as or even faster than human nutrition did. That, to me, means opportunity,” said Tom O'Leary, a dietary supplement industry veteran and the brain behind Rainbow Light Nutritional Systems' new GreenDog Naturals line of canine supplements.
Twenty-five-year-old Rainbow Light is one of the latest human supplement companies to venture into the animal category, joining such industry leaders as Thorne Research, Standard Process, 21st Century HealthCare and FoodScience Corp. in a young, promising market that many say looks a lot like the natural foods market did 15 years ago. But, as more human companies consider moving into the pet world, veterinarians and pet product pioneers warn that the transition is more complex than some might assume. Facing an uncertain and convoluted regulatory environment, a veterinary field that is cautious at best when it comes to understanding and recommending animal supplements, and a patient population that is vastly different from humans, companies wishing to extend their brand to pets have their work cut out for them. “It's definitely a good time to get into the business,” said Dale Metz, CEO of FoodScience Corp. and a founding member of the National Animal Supplement Council (NASC). “But if you are a human supplement company and you think you can just take your existing product and put it in a capsule for an animal, that is not the case. It's complicated.”
A Promising Market
Despite a sluggish economy that has sent many industries grinding to a halt, all things pet continue to be on a roll — including supplement products. As many as one-third of dogs and cats are already taking some form of supplement, with the average dog owner spending $77 per year on vitamins, and the average cat owner spending $31, according to the American Pet Products Association's 2007/2008 National Pet Owners Survey. Nutrition Business Journal estimates show that sales of animal supplements increased 7.4% to $1.4 billion in 2008. Joint-care and other condition-specific supplement products designed for the aging pet population fared particularly well last year.
Such numbers have lured dozens of human supplement companies to the animal segment in recent years. “Capitalism, pure and simple, is driving human supplement companies to move into the animal supplement category,” said NASC President Bill Bookout. “It's an opportunity to expand and leverage their capabilities laterally across other industry segments to meet other market demands.”
Essex Junction, Vermont-based FoodScience Corp. — which started in 1971 with an immune-support product (Dimethylglycine or DMG) for people — now has three pet divisions: U.S. Animal Nutritionals caters to the equine and companion-animal markets with a wide range of supplement products sold online; Vetri-Science Laboratories sells joint-support supplements through veterinarian offices; and Pet Naturals, launched in 2002, sells everything from bladder-support products to anti-anxiety capsules at retailers. In all, Metz estimated that pet health products constitute roughly one-third of the company's 640 SKUs, and half of its sales.
In 2002, food-based supplement maker Standard Process unveiled its own condition-specific animal supplement portfolio, sold exclusively through veterinarians. The line now features 10 canine products, six feline products and two equine products. Pet-specific supplement sales constitute 2% of the company's overall revenue and are growing at an estimated 15% annual clip, outpacing combined sales of its two human lines, which saw an increase of 11.5 % in 2008. (Standard Process sells whole food supplements for humans and is also the exclusive U.S. distributor for MediHerb's herbal supplements).
The need for effective integrative alternatives is driving the company's pet supplement sales, said Tom Cameron, DVM, veterinary technical support for Standard Process. “We are running into a real logjam of animals that are chronically ill and are becoming less and less responsive to drugs, and there is a frustration among both practitioners and owners,” Cameron said.
In 2004, Nordic Naturals unveiled a line of omega-3 fish oil supplements for dogs and cats. The company now has four SKUs and reports “consistent double-digit growth” for its animal products, said National Sales Manager Monique Wellise. RZN Nutraceuticals — maker of the Arthri-Zen brand pain relief botanical capsules and creams for arthritis and the Migra-Zen brand products for migraines — entered the market in 2006 by launching a veterinary line for dogs and horses. Rainbow Light joined the fray in February of this year with the introduction of its food-based, organic GreenDog Naturals line, which features Whole Dog Daily, a multivitamin; Healthy Motion, for better mobility; and Omega Glo-Coat 3-6-9, for heart health and healthy coat. Other major players in the pet supplement market include Nutramax Laboratories, a pioneer in the use of glucosamine/chondroitin in both animals and humans, and DVM Pharmaceuticals, a subsidiary of Teva Pharmaceuticals of North America.
Yet experts say that, unlike with human supplements, there is still plenty of room for more players in the animal supplement market. “Fifteen years ago, if you wanted to buy [supplement] products for humans, you would have had to go to a boutique health store. Now you can walk into Costco and find them,” said Metz. “That is not the case with the pet side. The market is not nearly as developed.”
Industry veterans add that once a company has earned loyalty and name recognition for its human supplements, it has a big head start when it comes to distribution and branding of a pet line. For instance, Rainbow Light, with a quarter-century of history behind it, has already been able to place its new GreenDog Naturals line within hundreds of independent natural food stores and Whole Foods Markets — virtually everywhere its human products are sold — just months after rolling out the brand. Fern Weiss, the grocery purchasing manager at Wedge Co-op in Minneapolis, told NBJ that her store plans to add the Rainbow Light line to its pet supplement selection this fall. “At that point we will probably discontinue a combination of the slower sellers in the Dancing Paws and Halo Purely for Pets supplement lines,” she said. In addition, when it comes to marketing a new animal supplement brand, the machine is already in place for human supplement companies. “We have an extensive plan that involves public relations, education and advertising in many of the same vehicles where we already advertise Rainbow Light's other products,” said O'Leary.
He and others stressed, however, that although the transition from human to pet products may seem a simple one in terms of marketing and branding, you can't fake true knowledge about pet health. This is why Rainbow Light, Nordic Naturals and Standard Process all brought seasoned veterinarians on board to help them safely formulate their products and help communicate their worth to pet owners and fellow veterinarians who might not yet be convinced that they are needed.
“Companies can ride on their brand loyalty to a large extent if they want to migrate from the human aisle to the pet aisle, but a lot of research needs to be conducted before they launch,” said Wellise, of Nordic Naturals. “They should consult with a veterinarian, ensure that pet health is the key consideration, and stay committed to high standards for the sake of the industry as a whole.”
Animal Expertise Crucial
NASC's Bookout — who is the founder of Genesis Ltd., a Valley Center, California-based maker of dog and cat supplements — said the involvement of veterinarians and other animal experts in an animal supplement company is so important that he advises consumers to make this a factor when deciding which products to buy. “It is important for consumers to deal with companies that have expertise in dealing with animals because animals are not just little people,” Bookout said. “So I always suggest that when a consumer evaluates a company that there is no substitute for calling the company directly and asking questions. Who formulates their products? Do they have veterinarians on staff? Do they have people who are knowledgeable about animals?”
As Mike Uckele, founder and CEO of the animal supplement company Uckele Health & Nutrition, noted, having animal expertise when formulating species-specific supplement products can be a matter of life or death for an animal. “The different nutritional requirements among species that are safe for people may not be safe in other animals,” he said. In addition, companies transitioning from human to animal supplements “may not have experience or expertise with extrapolation dosages,” Uckele cautioned. “They also may struggle with palatability, a fundamental issue with animals.”
Another challenge is educating consumers that animals are not just smaller versions of humans. “Many people still assume that it is OK to give their pets human products, but dogs and cats are of a different species and the wrong ingredient or the wrong dose can be very dangerous,” Wellise explained. In formulating its pet line, Nordic Naturals removed the rosemary oil antioxidant found in its human products, because rosemary oil can be harmful to small animals. It also reformulated its products to take into account species, life stage and weight, and designed new AAFCO-compliant labels to instruct pet owners on dosage.
Despite such efforts, Todd Henderson, DVM, founder and CEO of Nutramax Labs, which makes the Cosequin line of animal joint supplements and has developed a strong relationship with the veterinary community because of the depth and quality of its animal-specific products and research, said he is still sometimes shocked by the pet supplement products that make their way to the market. “I have seen supplements out there that contain an ingredient that is safe for people such as garlic and then is marketed for use in cats,” he said. “Garlic can cause anemia in cats, but these formulators don't know that. That's a serious problem.”
Nature's Way Holding Co. (NWHC), which owns the Nature's Way and Enzymatic Therapy brands, said that, although it has evaluated the pet supplement market, it hasn't raced in due to the many complexities of this business. “This is a potentially large market for the future, but one that also has many considerations before a company enters the market,” said Matt Schueller, senior vice president of marketing for NWHC. “Each type of animal has different nutritional needs, safety considerations and dosage considerations. The market is probably not best developed by transferring directly over supplement products that have been developed for humans, and then giving them in their current forms, blends and dosages to animals.”
Perhaps the biggest hurdle facing human supplement companies working to penetrate the pet supplement market is the current rocky regulatory road animal supplement companies must navigate.
Scott McCunn, vice president of regulatory affairs at 21st Century HealthCare, said a lack of regulatory understanding can pose problems for human supplement companies attempting to break into the animal supplement market. “The problem is, many of these human vitamin companies do not understand the significant regulations that AAFCO [the American Association of Feed Control Officials] and the FDA [U.S. Food and Drug Administration] enforce to ensure consumers are informed regarding label claims,” he said. “The landscape of pet supplementation is better regulated and more tightly enforced in most instances than human vitamins and most human supplement companies that do not manufacture their own products are not prepared for such regulatory oversight.”
Nordic Naturals' Wellise agreed that the current regulatory environment for animal supplements can create roadblocks for companies. “One of the biggest challenges is the amount of time it takes to get all the regulatory issues in place,” she said. “It is a very heavy administrative burden.”
O'Leary, the self-proclaimed “K9 health advocate” for Rainbow Light's GreenDog Naturals product line, has no doubt that the market for pet dietary supplements is about to break open — and he sees human supplement companies, armed with years of experience in marketing and regulatory issues, playing a big role.
“In many ways there is a very strong analogy between a core natural foods consumer and a pet owner trying to put together a supplement program for their dog,” O'Leary said. “In both instances, you have a consumer with a very high willingness to spend who feels completely unqualified to shop the category. The key is to educate that consumer, and we are using a lot of the same tactics that we use to educate the natural food consumer.”
As the GreenDog Naturals product line rolls out its seven SKUs at hundreds of natural food retailers, pet specialty stores and 450 Petco stores across the country, Rainbow Light is embarking on a broad computer-based education campaign for store employees, and working on a five-minute video piece for its company Website. O'Leary is also trying to convince natural food stores to place such products not in the pet food aisle, but rather in the vitamin aisle, alongside human products. “The idea that you can sell a premium supplement which requires a special education sale next to a bag of dog food is completely unsupported,” said O'Leary. “It would be like selling a vitamin C supplement and putting it in the aisle next to the oranges.”
Ultimately, experts predict that the regulatory issues surrounding animal supplements will be sorted out and the body of research behind these products will grow (several clinical trials on animals are currently underway), and this will ease the minds of consumers and veterinarians and open the flood gates for more human supplement companies to make the leap into animal supplements. Said O'Leary: “[Rainbow Light] certainly won't be the last.”
The NBJ Bottom Line
In general, now appears to be an excellent time for human supplement companies to move into the pet supplement market, which is not nearly as saturated or competitive as the human market. Also, pet products seem to be somewhat recession-proof and still have room for growth in the natural retail market, which many human supplement companies have successfully penetrated. In speaking with most of the major supplement companies that have extended their brands into the pet market, we didn't find one company that wished it hadn't made the leap or that failed in its efforts to penetrate the animal market.
That said, the uncertain regulatory environment does bring with it heavy administrative burdens, which can and are being eased through membership in the National Animal Supplement Council (NASC)In addition, companies must take seriously the important differences that exist between humans and animals and bring in the veterinary and other resources necessary to formulate and market products that will be safe and maximally beneficial to dogs, cats, horses and other animals.