ALPO AND KROGER TEST RESET, BOOST SALES

LISA A. TIBBITTS

ATLANTA -- In a controlled test with Kroger Co., Cincinnati, Alpo Petfoods found that remerchandising shelf sets led to a 29% sales increase in the dog food category.

By influencing pet owners to use canned and dry dog foods together as the "salad dressing on top of the salad" the resets yielded growth in a previously flat category, according to Martin L. Baum, director of marketing at Alpo, Allentown, Pa.

The reset departments showed a 29% increase in overall category sales, without any further promotional support, said Baum, speaking here at a conference on category management sponsored by The Marketing Institute, a division of the Institute for International Research, New York.

Alpo research found that 92% of consumers use both canned and dry dog foods to customize meals for their animals. Armed with that knowledge, the company developed a marketing strategy centered on increasing consumers' purchases of canned food, Baum said.

"If dry usage is at 92%, promoting dry isn't going to get you anywhere," said Baum. "If only 8% are using canned exclusively, why would you want to merchandise those apart from the dry dog food?"

Alpo developed its category approach, which begins with reorganized shelf sets, because canned purchases have declined over the past two decades. In 1970, 26.2% of the dog food "share of stomach" was canned, compared with 10.4% in 1991.

Dry foods have replaced canned foods as the preferred diet for canines, primarily due to convenience, lower cost and less odor. Unfortunately, the growing preference for dry food has meant a lower ring for retailers.

Alpo conducted a matched panel test at 14 stores in Kroger's Nashville division between January and July of 1994. Half the stores sported shelf resets, where canned food was merchandised on shelves above dry dog food. The remaining seven were monitored as control stores.

During the test, Baum said that Alpo instructed its brokers to deliberately avoid any extra promotional efforts, because it wanted to learn how much the shelf set changes alone would affect usage.

Alpo showed increased sales during the test period, as did its category competitors, when compared to the control group of stores. Sales per store of Alpo products for four weeks averaged $1,136 in the control group. That figure was boosted to $1,509 at stores with resets.

Alpo's major competitors in the category also shared in category sales increases, said Baum. One competing brand, Ralston-Purina, despite a sales increase, suffered a share decline because it manufactures dry food only.

Sales of canned food increased 39% and sales of dry increased 23%.

Based on Kroger's positive results, Hannaford Bros., Scarborough, Maine, has agreed to incorporate Alpo's shelf set concept chain-wide, said Baum, and several other major chains have agreed to test the program.