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Consumers pamper pets with good health

BY Barbara White-Sax

Pet supplies may have had limited growth this past year, but the stars of the segment are healthcare-related products. Pet supplies saw a 2% increase, bringing sales to $11.1 billion, according to Packaged Facts. The market research firm projects that this year, pet supplies will grow 4% over 2012 sales.

Like their owners, the pet population is graying. Pets are suffering from age-related conditions — including joint, coronary, cognitive and immune system-related, as well as diabetes and cancer — and consumers are snapping up products that can make their pets healthier.

"We are certainly seeing more health-related and preventive health products on the market that help pets maintain healthy lifestyles," said Bob Vetere, president of the American Pet Products Association. The explosion of health-related products coincides with a drop in veterinary visits recorded in the past few years, suggesting that pet owners are preemptively caring for their pets’ health issues with pet OTC products.

Such products as Nylabone — a rawhide chew alternative that is fortified with vitamins and minerals — are driving growth in the pet products category, according to a recent report from Mintel. Mintel expects chews, toys, grooming products made with natural ingredients and other supplies that contribute to the health and well-being of dogs and cats to drive sales in the pet supplies segment.

Dental care products are growing in popularity as consumers become more aware of how important gum care is to a pet’s health. Brian Collier, a spokesman for Naturel Promise, manufacturer of the Fresh Dental line of pet dental care products, said oral care products are the fastest-growing segment of the pet business.

Since 80% of dogs show signs of periodontal disease by age 3 years, Collier said the category has a huge upside because currently only 10% of pet owners purchase pet dental care products. Those who do purchase oral care products buy four to six oral care products a year, a number that significantly outpaces turns on other pet grooming products, said Collier.

Naturel Promise’s line of dental products contains a brushless gel, dental spray, water additive, liquid floss and a brushing gel, which retail for between $6.99 and $9.99. The products contain all-natural ingredients, a key selling point in the category.

In the pet food segment, the fastest growing area of pet food is natural and organic products. "It’s the first section that sold out in our show, and it’s clearly the hot performer in the food arena and will continue to be so for the foreseeable future," Vetere said.

Vetere said another hot segment within the category is convenience products that allow people more flexibility in feeding and caring for their pets.

 

 

The article above is part of the DSN Category Review Series. For the complete Pet Care Buy-In Report, including extensive charts, data and more analysis, click here.

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Meet Bob Miller

BY Antoinette Alexander

Bob Miller has a knack for turnarounds. In 1999, he took over Rite Aid as chairman and CEO, helping to stabilize the drug store chain at a time when Rite Aid was on the brink of bankruptcy, and many analysts were projecting Rite Aid would fold.

Miller joined Rite Aid soon after building Fred Meyer into a supermarket powerhouse. Kroger acquired the Midwest chain in a $8 billion deal in 1999.

Miller assumed the reigns of Albertson’s LLC in 2006 and has since resurrected that business as well. Miller actually started his retail career at Albertsons, spending 30 years working his way from store manager to EVP retail operations.

Miller has been credited with driving the deal between Supervalu and Cerberus.

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Supervalu to focus on ‘right-sizing’ going forward

BY Antoinette Alexander

When Supervalu announced this past summer a review of strategic alternatives, its goals were to improve its business, better position the company for the future and create the best opportunity to deliver shareholder value. This effort has led to the sale of 877 stores to AB Acquistion.

Following the sale, Supervalu will consist of its wholesaler business, which serves 1,950 stores across the country; Save-A-Lot with approximately 1,300 stores across 35 states; and Supervalu’s regional retail food banners Cub, Farm Fresh, Shoppers, Shop ‘n Save and Hornbacher’s.

The new Supervalu will be a $17 billion business comprised mostly of its distribution business (47% of revenues), Save-A-Lot (25%) and 191 regional supermarkets (28%). According to DSN estimates, the chain will generate about $381 million in annual pharmacy sales.

"We had viewed Jewel [which was sold] and Save-A-Lot [which was not] as the most attractive banners. While not deleveraging, the transaction will remove some of the weakest banners, including Shaw’s/Star Market and Albertsons," stated Citi Research analyst Deborah Weinswig in a recent research note.

At the helm of the newly formed Supervalu is former OfficeMax chief Sam Duncan. Duncan, who has more than 40 years of retail experience, served as president and CEO of ShopKo Stores prior to joining OfficeMax. He succeeds Wayne Sales, who served as the company’s president and CEO since July 2012.

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