In the four years since the Menu Foods pet recall tarnished the reputation of dozens of store brands, private-label marketers have struggled to gain a foothold in the space.
Still fresh in pet owners' minds is the summoning back of 60 million containers of food sold under scores of private and national brands. The recall was slow, dragging out over months as more foods were found to contain sometimes-lethal doses of aminopterin, melamine and/or cyanuric acid. All told, 471 dogs and cats were reported poisoned, and 104 died. Retailers diligently pulled affected product, but the damage was done.
“Hundreds of our shoppers told us how betrayed they felt,” Wegmans Food Markets acknowledged in a statement posted on its website at the time. “The most important thing is to regain your confidence that these products, like others under our own brand name, are high quality and safe for consumption.”
The fallout at Kmart was so bad that the chain abandoned its store-brand dog and cat food business altogether. But its Champion Breed line seemed doomed before it got off the ground, with its introduction coinciding almost to the day, with the initial recall from Menu Foods. Kmart is just now getting back into the space.
Pet owners turned to natural, organic and locally sourced premium brands — at first because it was all that remained on shelves — but eventually since they trusted that it was safe. No price tag was too large for their pet, as food safety trumped all other concerns.
Even during the recession, while shoppers turned to coupons and value-priced store brands for their own food, the premium mindset persisted.
“I was surprised because I thought we'd see a lot larger private-label advance because of the recession,” David Lummis, senior pet market analyst for market research publisher Packaged Facts, Rockville, Md., told SN.
Shoppers didn't just spend on pet foods they deemed safe, but projected their own ideas about preventive health onto their pets. Nutraceutical pet treats was one area that thrived since they deliver supplements like omega-3s and glucosamine, which has benefits for osteoarthritis, Lummis said.
Despite a flurry of new private-label introductions in 2010, store-brand pet food lost 1.1 share point to branded varieties during the 52 weeks ending Jan. 22, 2011, in U.S. food, drug and mass channels (including Wal-Mart), according to the Nielsen Co.
BRAND PREFERENCE
Shoppers chose branded varieties even as dog food and cat food experienced some of the most dramatic price increases in Center Store at 4.1% and 3.6%, respectively, according to SymphonyIRI Group. National brands softened the blow with promotional activity up 3.8% in dog food in 2010 vs. 2009.
“When the going gets tough, the brand marketers have gotten going,” said Lummis.
As a result, dollar sales of corporate-brand pet foods plummeted 9.6% during the 52 weeks ending Jan. 22, according to Nielsen.
It's unclear whether Kmart's relaunch of its Champion Breed dog and cat food, treats and accessories minimized the decline. The 120-SKU line including Champion Breed Complete Formula dry dog food, 40 pounds, $14.99; Chew Strips for dogs made with real bacon and cheese, 6-ounce, $2.29; and Champion Breed Complete Formula dry cat food, 18 pounds, $9.99, was brought back last fall as part of the chain's renewed focus on corporate brands.
“We're back in the pet business,” Kim Coovert, Kmart's brand manager of own-brand food and drug, said at IIR USA's Private Brand Movement conference in October. “We felt we were lacking in this area because we have a loyal pet consumer.”
Lummis speculated that store-brand pet food sales might have been hurt by a recall at the Kroger Co. in late December. Certain types of Kroger Value, Pet Pride and Old Yeller pet foods were pulled from shelves in 17 states after tests revealed a naturally occurring toxic chemical by-product from the growth of fungus on corn and other crops called aflatoxin.
“It was product that we made at one of our manufacturing plants,” Brendon Cull, director of government relations and regulatory affairs for Kroger, Cincinnati, told SN.
Loyalty cardholders who'd purchased the pet food were made aware of the issue via automated telephone calls and messages that appeared on their register receipt tape on their next visit. The company uses its customer recall notification system for all class I (the most serious/dangerous) recalls.
“It's one of the key benefits of our loyalty card,” noted Cull, who wouldn't say what effect, if any, the recall has had on sales.
In Kroger's case it was pet food manufactured in-house that raised red flags, but for most retailers the safety of outsourced production has been cause for concern.
Wegmans fell victim to the Menu Foods recall, but after pledging to regain shoppers' confidence in 2007, another black eye marred its reputation just one year later. Along with brands from Wal-Mart and Sam's Club, Wegmans' Bruiser dog food and Buju and Ziggie cat food were recalled by manufacturer Mars Petcare after salmonella was found in its plant.
NEW SUPPLIER
For Wegmans it was back to the drawing board to find a new manufacturer that could help rebuild its reputation. In 2009 it found the right fit and awarded Dad's Pet Care maker Ainsworth Pet Nutrition of Meadville, Pa., a contract to supply its dry dog and cat foods.
“This new supplier for Bruiser dry dog food and Buju and Ziggie dry cat food was necessary because of a disappointing relationship with the previous supplier, including recalled products a year ago due to a strain of salmonella found in their facility,” said Mary Ellen Burris, Wegmans' senior vice president of consumer affairs, in a column.
Ainsworth complies with Safe Quality Foods 2000's Level 2 standards, one of the five global food safety standards endorsed and required by Wegmans. In fact, it was the first pet food manufacturer to become SQF certified, according to Steve Joyce, Ainsworth's director of marketing. Nine other pet food makers have since received certification, Bob Garfield, senior vice president of SQF told SN.
Another point of differentiation for the manufacturer is its long-term relationships with local suppliers and a process that requires holding product in its warehouse for 48 hours until safety testing is complete. The company's track record speaks for itself.
“We were one of the only companies not implicated in the [Menu Foods] recall,” said Joyce.
Indeed, its food safety record has helped Ainsworth win private-label contracts with Wal-Mart, Kroger, H.E. Butt Grocery Co., Ahold, Meijer, Loblaw Cos., Delhaize and other retailers who have more closely scrutinized their suppliers' food safety practices, noted Joyce.
“We try to get as many [retailers] in here as possible to see the plant and what our processes are,” he said.
If price tops all other concerns, the supermarket has likely come to the wrong place. “Some retailers are interested in the lowest cost, but generally that's not us,” said Joyce.
FOOD FOR ALL
LAKELAND, Fla. — A year's supply of people and pet food is up for grabs at Publix Super Markets.
As part of the “Publix Free Food For You and Your Pet” sweepstakes, three entries will be randomly selected to win $5,200 in Publix gift cards.
To enter, shoppers must sign up for the Publix Pet Program and live in the chain's operating areas of Florida, Georgia, Alabama, South Carolina or Tennessee. The sweepstakes runs through March 31.
“Register now to receive tips, valuable coupons and advance notice of special events,” states Publix in promotional materials.
— J.G.
PRIVATE LOSS
Private labels are losing share to national brands
| CATEGORY | PRIVATE LABEL % OF SEGMENT | SHARE CHANGE VS. YEAR AGO* |
|---|---|---|
| TOTAL Pet Food | 13.9% | -1.1 |
| Cat Food — Dry | 10.8% | -1.7 |
| Cat Food — Wet | 9.0% | -0.9 |
| Dog and Cat Treats | 10.2% | -1.2 |
| Dog Food — Dry | 19.1% | -1.2 |
| Dog Food — Wet | 11.8% | -0.8 |
* 52 weeks ending Jan. 22, 2011
SOURCE: The Nielsen Co.
