According to Natural Category Buyer (March 2002) sales of natural and organic pet foods increased rapidly in the late 90s, sales now appear to be leveling off. Sales of pet foods and pet products (like supplements) were $177 million in 2001, up 1 percent vs. year prior (Natural Foods Merchandiser, June 2002). Twenty six percent of that was totally organic; the remainder was natural. This niche is small compared to the
conventional pet food market, which topped $11 billion in 2001 according to Functional Foods (Sept 2002). This market is highly profitable and has significant potential for growth.
To understand the market, it’s important to know a little about the consumers. "People think of their dogs and cats as part of the family," says Burton Miller, DVM, a holistic veterinarian and director of animal health at Nature's Answer Pets in Hauppauge, N.Y. "They want health for their pets in much the same way as they want health for their children." Miller suggests that, while natural pet foods currently account for a relatively small segment of the overall pet food industry, more pet owners are demanding higher- quality products. Michael Gagliardi, president of Integrated Pet Foods in Exton, PA, agrees with Miller's assessment of the changing market. "Just 15 years ago, grocery stores represented 95 percent of all the pet food sold," says Gagliardi. "Today, that number is below 60 percent. The premium market went from just one percent of the market in the early 80s to more than 30 percent today. People want quality for their pets, and if they can't find it in the conventional stores, they'll go somewhere else for it." (March 2002 Natural Foods Merchandiser)
How do natural pet foods differ from conventional pet foods? The natural brands use natural preservatives such as vitamins C and E, which are more expensive and usually allow for no more than a one-year shelf life. The products also differ based on the quality of meat, vegetable and grain products used in them. The Association of American Feed Control Officials, which oversees product labeling and ingredient regulations for pet food, is ambiguous when it comes to its definitions and lenient when it comes to its allowances. "The premium brands that are sold in the natural foods stores go well beyond what is considered '100 percent complete and balanced' [by AAFCO]." says Gagliardi. For instance, meat in some conventional products may come from what is referred to in the industry as the four D's—animals that are disabled, diseased, dying or dead before they reach the slaughterhouse.
The definition of animal by-product is another sticky point for many pet food
manufacturers. By-product can refer to any part of the animal. Pet food that includes heart, liver, kidneys or bone is considered acceptable by veterinarians. But other
ingredients, such as feathers, beaks, feet, teeth or hooves are not acceptable. Because of the definition's broad allowances, the term by-product is negative; so many premium manufacturers avoid it. Instead they list the specific animal parts used (March 2002 Natural Foods Merchandiser).
Appendix E
Natural/Organic Pet Food Sold Over the Internet
www.ecobusinesslinks.com/all_natural_pet_food.htm www.petfoodinstitute.org www.fas.usda.gov/agx/organic/Buyer/Animal.htm www.happypaws.com www.thepetcenter.com www.greenpeople.org www.gooddogexpress.com www.naturespet.com www.pawadvantagepetfood.com www.performancepetfoods.com www.ntegratedpet.com www.newhope.com www.naturesvariety.com www.wholefoods.comDoes a private label and brands found in natural/organic stores include: • www.wysong.net
• www.treatoria.com (natural supplements) Other Companies without Web Sites:
Precise Tel 888-4-precise Nacogdoches, TX Northwest Pet Tel 800-973-6444 Clackamas, OR
Appendix F
Natural Product Distribution Channels
In 2001, natural product sales topped $34 billion, according to the Natural Foods
Merchandiser (June 2002). At +6.7 percent, the annual growth rate has leveled off vs. the double-digit growth of the 1990s. However, when compared to the +0.1 percent second half 2001 performance of the top 10 supermarket chains) it is still impressive
(Supermarket News, April 22, 2002.)
There are a limited number of natural product distributors that handle the majority of food and nonfood products distributed to natural product retailers. Over the last few years, significant consolidation has occurred... There are only two full line national distributors: United Natural Foods, Inc. and Tree of Life. Other smaller distributors like Nature’s Best and Millbrook are either regional or offer a limited line.
Natural product retailers account for the lion’s share of sales at $16,244 billion (+8.3 percent), followed by conventional (Retail, Drug and Mass) at $9,995 billion (+5.5 percent), multi-level marketers at $4,953 billion (+1.9 percent), mail order at $1,301 billion (+9.3 percent), practitioners at $1,275 billion (+10 percent) and internet sales at $352 billion (25.5 percent). Two of the top fifty retail chains in the country carry exclusively natural or organic pet food products, Whole Foods Market, #27 according to Progressive Grocer (April 15, 2002) and Wild Oats Market, #46.
http://www.unfi.com/ http://us.treeoflife.com/ http://www.wholefoods.com/ http://www.wildoats.com/
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