Category Report: Pet Merchandising

Americans spend billions of dollars yearly on the health and happiness of their pets. Owners buy their pets toys, clothes and generally treat them like another member of the family. Marketers are hip to this fanatical adoration, and are even changing the way they market pet products.The American Pet Products Manufacturers Association (APPMA), headquartered in Greenwich, CT, sees pet product marketers dressing up their products with the same types of packaging and promotions used for people products, says Tierra Griffiths, spokesperson for the APPMA.That may sound crazy, even a little creepy, but it's working. "The pet products industry is growing at an amazing pace. The category in recent years has outpaced the toy and candy industries for humans, with sales in pet products doubling over the past decade to reach $36 billion last year -- and it just doesn't seem to be slowing down," Griffiths says.And with all these dollars pouring in, pet product manufacturers are ramping up their P-O-P offerings. Josh Roth, vice president of Pet Pantry Warehouse, the pet specialty store, which opened its Greenwich, CT-based location in 1945, and will be adding a second store in New York later this year, says pet product manufacturers have become more savvy. "They're getting a lot more sophisticated in terms of P-O-P," he says.Griffiths agrees, saying that the pet industry as a whole is fairly young and is growing up fast. "You'll continue to see growth in these types of products," she says. "And I really think you'll continue to see them mimicking whatever's popular with humans."Pet P-O-P Gets InnovativePerhaps due to the overall success of the category, merchandising pet products has taken a leap forward. "For us, P-O-P is really critical in converting aisle shoppers into purchasers of our product," says Mark Grambart, CEO of Contech, a Victoria, British Columbia-based company that makes electronic products for pets. For its Water Dog -- an outdoor presence-activated automatic drinking fountain for canines -- Contech devised a demonstration P-O-P display that activates when someone walks in front of it. "This allows the consumer to see how the product works and also draws attention to the product," says Grambart. Pets International, Elk Grove Village, IL, makers of Super Pet, uses P-O-P to showcase its Critter Trail products for small animals. "One of the things we've done is use P-O-P to solve a problem for some retailers who only have one or two planogram changes a year," says Jason Casto, director of marketing. "Since we launch one new cage or home each year, we created a freestanding shipper that holds six to 12 cages that the retailer can place next to their existing sets of Critter Trails."In addition to point-of-purchase displays, Super Pet offers retailers a small-animal department makeover, where the company's field sales staff resets the department -- from 4 to 16 feet. "We put up P-O-P header cards on all of the shelving units and then add shelf strips to really dress up the section and tie the whole thing together. As a brand marketer, I benefit from the extra exposure my brand name gets in that department, in addition to the increased listings," says Casto.Equally innovative, Chomp Inc., Tampa, FL, has claimed new territory for pet products by taking its line of pet "candy" products, such as Sniffers, Yip Yap and Pit'r Pat, into the front ends of grocery stores. The company developed four different racks, in both vertical and horizontal orientation, to fit into the general merchandising section in the checkout aisles. "We developed a rack that actually fits on top of the section and covers it, so that you can put product on both sides to service two registers at the same time," says Jack Drasner, senior vice president of sales. "That's been a very successful program."Catching Fido's Eye Pet product manufacturers have also changed the way products are packaged. "Our entire approach to Castor & Pollux was to have innovative packaging," says Shelley Gunton, co-owner of Castor & Pollux Pet Works, Clackamas, OR. "When we started the company, we spent an enormous amount of time and money working on the branding and packaging to represent us on the shelf." The award-winning Castor & Pollux packaging has a retro look coupled with custom shapes, such as Head to Tail dog shampoo bottled in a model red fire hydrant. "Our packaging has really paid off for us because it stands out on the shelf," says Gunton.For Chomp's line of dog and cat treats, bright colors and die-cut stand-up pouches in the shape of a dog's head draws the consumers' attention. "Our packaging in bright blue, pink, red and yellow bags was developed to look like 'candy' for animals, to humanize the products," says Drasner.For Greenies, a toothbrush-shaped dental chew for dogs, S&M NuTec developed a variety of package sizes and a window "that plays up the distinctive branding identity of Greenies," says Marcy Johnson, director of marketing for S&M NuTec in Kansas City, MO. "Our packages always feature the toothbrush-shaped green bone and high-end graphics with green as the primary package color. ... Pet treats are extremely elastic -- the more treats a consumer has in the household, the more they feed them to their pets. Our packaging strategy is part of our overall brand strategy to increase consumption and grow the entire category."Ultra Pet Co., Anderson, SC, also utilizes vibrant packaging for its treats and litter, along with floor displays, shelf talkers, floor signage, door signs, fact cards and box inserts to promote its new line of dog treats, Zen Puppy, which combine herbs, botanicals and chelated minerals in five formulas. "What grabs the consumer's attention is friendly colors and friendly animals, whether real or graphically created," says Jennifer Shipman, associate marketing manager. For Backyard Nature Products, recent consolidation of its line of wild bird products under one brand name -- Birds Choice -- inspired new packaging. The products now sport "color-coded labels, hang tags and boxes to correspond with the feed that is dispensed," says Ruth Bloedorn, marketer and accountant with the Chilton, WI-based Backyard Nature Products. For example, a Nyjer seed dispenser has a yellow label, a suet dispenser has a gold label, and a sunflower, peanuts or blend feeder has a green label. "We hope to gain more shelf space by going with one name for all of our products and by having consistent labeling to educate the consumer," says Bloedorn.With its focus on small animals, Super Pet uses its packaging both to grab a child's attention, since small animals tend to be kids' pets, and to educate the parent about the product. "It's kind of a balance between colorful and fun, and educational," says Casto.Labels That Speak LoudestWhat to put on the label is an important packaging decision. "I think it's very important to communicate the benefits of the product instead of the features of the product," says Contech's Grambart. His company's Water Dog label highlights the fresh water your pet will drink instead of the product's sonar-activation or three-foot working area. "People always want to know what the product can do for them," he says.Shipman of Ultra Pet agrees. "People do not necessarily want technical information, but they want to know it's a safe product for their pet, and, in the case of litter, that it's environmentally friendly," says Shipman. "We put things in an easy-to-read format to make it easy to find out the basics of the product in a short time.""The first thing consumers want to know is, 'What is the benefit of this product for my pet?'" says S&M NuTec's Johnson. "Pets are considered members of the family, and thus buying decisions are made using the same emotional criteria consumers use when they choose products for themselves." Greenies' labels always answer the questions: Do they taste good? Do they provide value? Are they made from wholesome ingredients? Are they good for my dog? Are they made by a company I trust?Super Pet uses real photos of the animal the product is designed for on every label, in addition to a Super Pet Tip about that animal. "We try to offer consumers information to make their experience more rewarding," says Casto.Castor & Pollux connects with pet owners by featuring Castor the dog or Pollux the cat "talking" to the owner about why to buy the particular product. "A lot of the copy is somewhat tongue-in-cheek, designed to make them smile," says Gunton. Keeping it on the ShelfCapturing shelf space for products can be a consistent battle. For Super Pet, setting up product on the shelves falls to its field sales staff, not the retailer, creating an advantage for the small animal company. "That tends to be a huge thing with pet store retailers," says Casto. "They really appreciate that as a brand, we're willing to invest our time in their stores to make sure the product is set up properly. For that, they reward us with extra shelf space."United Pet Group of Blacksburg, VA, implemented a merchandising strategy called the Tetra Nutrition System that "expands our shelf space, enhances the store's appearance, simplifies maintenance and gives the store a professional authoritative image in fish nutrition," says Molly Montabert, the company's trade marketing manager for the independent and wholesale channel. The Tetra Nutrition System features header signs, aquarium background graphics, on-shelf nutrition guides and shelf strips.The Independent AdvantageWorking with independent pet specialty stores can give niche products more exposure than the big box retailers provide. Pet Pantry Warehouse's Roth sees pet specialty retailers as a "big driver in the industry. There is a large swath of products not offered to big box retailers, which includes a lot of holistic-type foods, so we're able to carry a large selection of product not carried in Wal-Mart, Petco or PetSmart. That gives us the competitive edge.""Small, independent pet stores are a major part of our business, so what we design in terms of display and P-O-P is initially focused on this channel," says Johnson of S&M NuTec. "We stay cognizant of the space limitations that those retailers must deal with, and we provide them with small footprints with maximum product fills to give them the best margin per square foot."Ultra Pet creates specialized P-O-P depending on the store and space. "We're willing to adapt to what they need," says Shipman. "We've been very flexible."Backyard Nature Products only sells its products to independent pet stores. "We're only involved in the specialty wild bird feeding market," says Bloedorn, "so it makes sense for us to only be in specialty stores.""It's important to understand individual stores versus Costco," says Contech's Grambart. For example, he says Costco is more concerned about shoppable pallets and theft while independent stores "want to convey their knowledge of the product."Promotion NotionsPromotional offers garner additional interest from retailers and consumers. Backyard Nature Products offers trade show specials, catalog discounts and an early fall booking discount program because fall is the busiest time of year for the products. "We tried a couple of package specials at our last trade show, which flopped," says Bloedorn. "That taught us that the size of the discount doesn't matter if the retailers are required to take a certain amount of certain products. Retailers want to pick and choose their favorite products."Promotions targeting consumers also are popular with pet product manufacturers. Castor & Pollux works with Petco on a series of different promotions, from in-store demonstrations to sampling food items. The company also offers holiday season gift packs as specialty items to give "retailers an assortment of gift items that they can offer dog and cat owners," says Gunton."Creating merchandising events at the point-of-purchase creates value with the consumer," says Johnson. S&M NuTec runs several thematic promotions throughout the calendar year to increase volume and awareness for different Greenies package sizes.Ultra Pet gives consumers coupons or rebates, in addition to running a litter rewards program that invites consumers to save UPC codes for free litter coupons. "We do a lot of consumer events to promote our products," says Shipman. "We usually coincide our deals with the store to provide an extra incentive to buy our products."United Pet Group recently launched its "Quest for the Tetra Treasure Sweepstakes $10,000 Giveaway" promotion. Under the brand name Tetra, United Pet Group offers aquarium, reptile and pond products ranging from food to filters. "These consumer sweepstakes displays aid in providing a significant sales boost for our retailers, as well as promoting our core products to consumers," says Montabert.Pets Go OrganicToday's pet owners want to feed their pets wholesome, natural and even organic food and treats. "We see stronger growth in kosher, organic, all-natural and vitamin-fortified food segments," says APPMA's Griffiths. "Like most trends in the pet industry, this mimics what's going on in the human food industry." "This segment of the pet treat category is exploding and will continue to grow and expand with a proliferation of new product offerings," says S&M NuTec's Johnson.Just over two years ago, Castor & Pollux launched Organix, a line of 70% organic feline and canine food, and Organix Dog Cookies and Organix Cat Treats, a line of 95% organic treats. "It's the fastest growing segment of our business," says Gunton. "It's very difficult to launch organic food because of the lengthy certification process and because of the fierce competition for the supply of organic ingredients."Ultra Pet's cat litter contains all natural ingredients, and its new line of dog treats, Zen Puppy, has herbs and botanicals. "People are looking for products with herbs and botanicals to treat themselves and want the same types of items for their dogs," says Shipman.

Category Report: Pet Merchandising

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