Great
Appetite for PL Pet Food
BY
KARSTEN KNOTHE
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| Lifestage and premium products
are part of Wal-Mart's Ol' Roy range. |
Private label growth driven by huge
variety and low prices - but there is little differentiation among
PL offerings.
Pets are an integral part in every day life in Germany. According
to Industrieverband Heimtierbedarf, the trade association of pet
food manufacturers, there are some 6.9 million cats in 14% of household,
4.7 million dogs in 13% of household, 5.7 million pets in 8% of
households, 4.9 million birds in 7% of households and 3 million
fish tanks in 6% of households. This amounts to a German pet population
of more than 22 million.
In 2001, Germans spent just under EUR 2,8 billion on pet food and
pet care products - just over EUR 2 billion on pet food, and just
under EUR 0.8 billion on pet care products. Almost 90% of pet food
sold was cat and dog food.
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| Shiny colours characterise
the design of Schlecker's AS range. |
Most pet food is sold outside the specialist channel. Grocery outlets,
drugmarkets, and discounters take an accumulated share of some 75%
of pet food sales, whilst specialist outlets including pet superstores
take only 25%. The situation is exactly reversed with regard to
pet care products, where the specialist channel dominates with a
decisive 80% of sales.
Private label products play an important role in pet food sales
- industry insiders estimate their share in monetary sales at some
30%, which means their share in volume sales is even higher. In
other words: more than one in three pet food purchases is a private
label product - with an upward tendency.
Clearly, the lower price of PL products is the main growth driver.
PL brands are substantially cheaper than manufacturer brands, whilst
optically they are only slightly - if at all - inferior. In addition,
PL pet food ranges have grown considerably to offer a choice comparable
- in some outlets even superior - to manufacturer brands.
Overall, the various PL pet food ranges differ little from each
other. The only exception is a different design approach by dm drogeriemarkt
and a greater variety of special products at Fressnapf - which is
to be expected as this is a specialist retailer. Otherwise, PL ranges
try to score points with low prices and appealing packaging, whilst
there are only few attempts to gain profile with unique products.
However, more activities are expected in this area in the future.
Package sizes for pet food in Germany have become fairly standardised,
although there is an increasing number of exceptions. Nevertheless,
wet cat food packs tend to come in 400g, 200g and 100g, whilst dry
cat food in 1kg packs. Wet dog food comes in 400g, 300g and 150g
packs, whilst dry dog food comes in 1.5kg packs. Some large dry
food packs are offered in the specialist channel and larger outlets.
As a result, price comparison is fairly straight-forward for consumers
as mostly it is a case of "significantly less money for the
same weight" rather than the more tricky "more weight
for slightly less money".
The Schlecker Range
Schlecker is a chain of drugmarkets who are present not only in
city centres, but also in many quieter residential areas and villages.
Some of the smaller and more remote stores can be rather disorganised.
Thus the true extent of their range becomes only visible in larger
stores or in the company's online shop. Schlecker's own brand for
its entire PL range across all product categories is AS (short for
Anton Schlecker). In line with the market average, PL sales account
for some 30% of pet food sales.
There are some 40 varieties each of both dog and cat food, most
of them wet products. Furthermore, there are 8 products for birds
and 8 products for small mammals.
The base colour for most dog products is a deep orange-yellow -
similar to Pedigree, and for cat food it is pink - similar to Whiskas.
Most snack packaging uses a bright orange or red. However, there
are modifications for different varieties - as well as outright
exceptions. For example, some cat food varieties come in packs dominated
by the yellow or orange -a colour mostly used for dog food.
In most cases, AS is the cheapest product on offer - the exception
are some 100g wet cat food tubs which at EUR0.35 retail at a higher
price than kitekat at EUR 0.30 These are Schlecker's most advanced
products - according to Schlecker they are comparable to Masterfoods'
premium Sheba brand in terms of quality.
Products with an additional benefit include AS Premium Menu Junior
(sold in 400g cans) for younger dogs, and AS Katzenkinder for kittens
(sold in 100g tubs and 195g cans). The association with children
is reinforced by the playful and colourful font used for the word
Katzenkinder.
Distinctive Packaging by dm drogeriemarkt
dm- drogeriemarket, another chain of self-service drugmarkets offers
Dein Bestes Your best, a range of 80 pet food products. This includes
about 40 different products for dogs, and 30 for cats. Among all
PL ranges seen by PLI (or indeed all ranges including manufacturer
brands except Sheba), Dein Bestes stands out with regard to packaging
as it is the only range which does not use a photo of a cat or a
dog on its packaging, but a drawing of a pet which is in equal measures
cute, funny and happy. The base colour of most dog products is orange
and yellow, whilst that of most cat products is pink/purple. There
are colour variations according to different flavours and varieties.
In stores visited by PLI, Dein Bestes took about one third of shelf
space for cat food, and half of shelf space for dog food. But more
importantly, the variety and choice offered was noticeably greater
for Dein Bestes compared to any other manufacturer brand. This was
particularly so in snacks - a fast growing segment in the pet food
market, which is also regarded as a priority by dm-drogeriemarkt.
New products are particularly important in the area of snacks. New
Dein Bestes varieties launched in 2002 included snack sticks for
cats in salmon & trout and turkey & cheese varieties as
well as 8 packs of juicy sausages for dogs. Furthermore, dm drogeriemarkt
introduced a number of promotional articles including multi-packs
of the new cat snacks as an introductory offer and toys for cats
and dogs in a bid to generate additional impulse sales. Also, drogeriemarkt
re-launched its 400g tinned cat food range and extended it by the
Saftige Stückchen juicy bits variety. Now, each product is
based on a combination of red and white meat.
Thus far, Dein Bestes has only one life stage variety for kittens,
but none for dogs.
The Rossmann Range
Rossmann is another leading drugmarket chain with some 650 outlets.
Its PL range is Winston consisting of dog and cat food as well as
food for birds and small mammals. In outlets visited by PLI, Winston
took about half the shelf space for dog food, and one third for
cat food. Whilst the variety did not seem to be greater compared
to manufacturer brands, they were displayed more prominently as
they were spread out more. Once again, the base colour for dog food
products in yellow/orange and for cat food products is pink/purple.
The Winston range includes some products where an additional benefit
is clearly stated as a unique selling point. Examples include Winston
Schlemmer Menü Senior and Winston Schlemmer Menü Junior,
available in 150 g tubs for dogs and in 100g tubs for cats. Furthermore,
for cats Rossmann offers Winston Denta Croques, a wet product that
aids dental hygiene (sold in 100g slim cans), Winston Vitamin Drops
(sold in bags of 50 units) and Winston lactose-reduced cat milk
(sold in 200ml tetra packs).
Pet Food in Leading Grocery Chains
Metro AG is Germany's largest retail group in terms of turnover
and has several distribution channels. The company has two pet food
PL ranges. In the economy price range, there are a number of products
as part of Metro's TIP range (Toll Im Preis = Terrific Price). In
detail, there are 13 products each for dogs and cats, 3 varieties
of cat litter and 4 bird food varieties.
Metro's quality brand is O'Lacy consisting of some 40 products
for dogs, 30 cat food products, 5 cat litter products and 10 products
for small mammals - sold as O'Lacy Tiny. The packaging colour does
not follow the market leaders - instead it is blue and red for dogs
and black and white for cats. The base colour for O'Lacy Tiny is
light green. The sub-brand name Tiny is printed in larger fonts
than the core brand. The O'Lacy range includes some life stage products:
including dry food for puppies and older dogs, wet food for puppies
and wet food for kittens.
Rewe's main distribution channels for its PL ranges are its HM
and minimal supermarkets. It's main PL brand is the economy brand
ja! as part of the ja! range. This has a very distinctive and basic
design consisting of the word ja! printed in large fonts on a white
background.
In the medium price bracket, Rewe's brands are ProDog and ProCat.
Recently, Rewe's activities put greater emphasis on its ja! range,
whilst ProDog and ProCat took a back seat with shrinking shelf space.
However, this may well be reversed at some point in the future.
Rewe's PL brand versatility is greatest in its hard discount channel
Pennymarkt. Pennymarkt's dog food brands include Artus (mainly cans),
the slightly higher-priced Argos (mainly cans, bowls and dry dog
food) as well as Sporty (mainly bowls and snacks). In cat food,
Rewe's discounter brands are Bianca, Funny Cat, the slightly higher-priced
Saphir and the cat litter brand Noma. A key characteristic of hard
discounters is that products are left in their cartons or trays.
Similar to other hard discounters, Pennymarkt switched increasingly
to mixed trays containing several varieties rather than mono trays.
Edeka offers its domino range both for cats and for dogs. Domino
occupied about 25% of shelf space for dogs and 20% for cats in stores
visited by PLI. The design of domino for dogs is slightly reminiscent
of Chappie, whilst domino for cats has some similarity to kitekat,
but neither is an outright copy. In particular, whilst kitekat's
sticks more rigidly to its green base colour, there is greater colour
variety among the domino range according to different flavours.
New products in 2002 included chews for dogs and new wet food varieties.
Fressnapf, the Leading Specialist
The leading pet superstore chain in Germany is Fressnapf. Fressnapf
has four PL ranges: Fit + Fun , an economy range, Multi Fit, a comprehensive
mid-price range, Premiere, a newly-launched premium range and Select
Gold, a super premium brand. New flavours and varieties were launched
in all four ranges in 2002. One area of new product developments
continued to be single serve products. Particularly unique products
included also an antibacterial straw litter with a fragrance of
oranges for small mammals or a white natural fragrant cat litter.
Given its economy price position, Fit + Fun is designed to meet
basic demands in the areas of dog and cat food as well as pond fish
food. It is the smallest of the brands. Multi Fit is the only comprehensive
range covering the whole pet spectrum. The premium range Premiere
was launched last winter and consists of a large number of specialities
for cats and dogs. The main selling point is a 60% fresh meat content.
The concept of the Select Gold super premium range is based on diversity
with regard to flavours combined with life cycle know-how. Apart
from products for different age groups, Fressnapf plans in future
to increase the number of special needs products, for example Select
Gold Sensitive Digestion for cats.
Additional reporting by Anna Wynnyczuk.
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