Fresh Pet Fare Spurs Category Sales

JULIE GALLAGHER

WEST DES MOINES, Iowa — Refrigerated, meat-based pet foods are helping boost overall category sales at Hy-Vee, the retailer told SN.

Sold from cases positioned inline or on endcaps adjacent the pet food aisle, natural offerings from share leader Freshpet are driving category traffic and basket rings, said Patty Karbacka, a purchasing specialist at Hy-Vee here.

“We've even gotten letters from customers expressing how thrilled they are with the product,” she said.

The chain merchandises 18 SKUs of ready-to-serve dog and cat food that has been gently cooked to meet U.S. Department of Agriculture standards for meat handling, in 80 of its 220 stores.

One-pound slice-and-serve rolls made with meat, vegetables and brown rice, and retailing for $3.29, have emerged as a gateway product that shoppers buy before trading up to the more economical 6-pound roll for $13.

“Consumers buy the 1-pound [roll] to try out and then quickly migrate to the 6-pound, due to the cost advantage,” Karbacka said.

Other Freshpet Select products include meat and grains in meatball-style Bites; a Homestyle option comprising chunks of chicken or lamb with vegetables and grains in gravy; and Dog Joy treats made with slow-grilled chicken and beef.

See-through packaging reveals visual cues about the line's health and wellness positioning and helps reinforce that items do not contain corn, wheat, byproducts or preservatives.

“Consumers can actually see the rice and peas in the food,” said Karbacka who attributes Freshpet's popularity to the tendency of Americans to project human motivations about health and taste onto their pets.

Cognizant of the so-called anthropomorphism trend, Freshpet focuses on quality ingredients, high palatability and preparation methods such as roasting, said Brian Stoeckle, director of sales.

The brand was created to fill a dearth in the market for refrigerated pet foods. “Our team identified that a gap existed between what consumers wanted and what existing products offered. As a result the fresh pet food category is the fastest-growing segment in pet food,” Stoeckle said.

Hy-Vee stores merchandising the category are posting higher overall pet food sales than those that are not, noted Karbacka.

“Carrying Freshpet can increase the dollar sales in the category due to price point,” she said.

Analysis conducted by SymphonyIRI bears this out. It found that sales of dog treats in stores selling Freshpet Select were up 3.6% vs. 1.6% in stores that were not, during the 52 weeks ending March 20, 2011. Wet dog food sales rose 2% in stores with the brand and dropped 3.7% in stores not selling it. Freshpet Select is available in 4,700 grocery stores.

Part of the growth may be attributed to more frequent visits since shoppers do not stock up on fresh pet food like they would shelf stable offerings, Karbacka said.

Schnuck Markets, which carries Freshpet Select in 62 of its 105 locations, also considers the category a point of differentiation.

“Owners seem to enjoy giving it to their pets and pets seem to love it,” Category Manager Pam Hild told SN.

Schnucks and Hy-Vee will expand their respective offerings later this month with a handful of new launches including Freshpet Select Roasted meals for dogs and cats. The items will be cut into refrigerated cases provided by Freshpet, which requires exclusive use of the coolers.

“To continue to grow this performing brand, we want to make sure we are giving our customer new and exciting products to feed their pet,” Karbacka said.

In order to accommodate its pet sections, Schnucks uses a variety of chiller sizes and configurations. “Some are placed in-aisle adjacent to the wet food section while others are placed on endcaps or wing units,” Hild said.

Hy-Vee, which initially launched the units in 14 Lincoln and Omaha, Neb.-area stores in 2007, has since expanded to five times the number of stores. Cases are positioned mid-aisle or on endcaps, with most stores rationalizing wet pet food to accommodate them.