It's raining cat and dog food

Prepared Foods, April, 1989 by Alison Otto

Ralston's sheer size and manufacturing efficiencies have helped the company maintain its top position, explains analyst McMillin. Ralston has also waged a dog fight with Quaker, which has been struggling to integrate the Gaines pet food business it purchased from Anderson Clayton in 1986.

"When Quaker bought Gaines they had close to 80% share (of the semi-moist category)," says McMillin. "Today they're lucky if they have half."

The trouble for Quaker started when Ralston bought Benco Pet Foods in 1987 and launched its own attack on the semi-moist category, says McMillin. He predicts that Quaker's pet food operating margins may only reach about 8% this year. "Perhaps this is the only blemish on an excellent acquisition company," he says.

Quaker chairman and CEO William Smithburg acknowledges that the company faces some obstacles.

"As we look ahead to the rest of fiscal 1989, we face a key challenge in pet foods, due to the increased competition in the premium canned segment and continuing shrinkage of the semi-moist market," he told analysts in February. "On the positive side, our restaged Gaines brands--Cycle and Gravy Train--are doing well, and our new premium canned dog food, King Kuts, is gaining market share."

Ralston's Stiritz also points to repositioning as an important element of pet food marketing, one that may explain the onslaught of new types of pet food products.

"The nature of this business is that business unit management must always be looking for ways to breathe new life into our existing brands," he says. "This means that as brand unit volume begins to level off, managers begin the repositioning process. The idea is to get consumers thinking differently about a brand."

So, like Quaker, Ralston restaged products last year, including Chuck Wagon and High Protein dog foods.

Cats and dogs may be the recipients of these new fancy products, but people do the shopping. And pet foods have inspired some of food marketing's most innovative ads.

One of Ralston's ads, for example, plays on the video-age instinct to stay at home and take it easy. As Sparky contentedly pigs out on a bag of dog chow, the ad quips, "Her invitation intrigued him, but Sparky opted instead for a quiet dinner at home."

To promote Reward, its superpremium canned dog food, Heinz unabashadely lays on the guilt: "When you think about the unique joy your dog brings you, why would you ever want to feed him anything less than America's finest dog food?"

Products also tie neatly into the lifestyles of the day.

For convenience, there's home delivery. Carnation will deliver Perform, its new superpremium pet food, right to the consumer's doorstep.

Or consider the grazing trend. People are eating fewer, lighter meals, and they also seem to be throwing more bones in Fido's direction. Dog and cat treats are two of the fastest growing pet food categories.

In 1988, sales of dog snacks increased 7.4%, to $402 million, SAMI reports. Cat treats is another emerging category. Last year sales were $33 million, up 27%.