Petfood Industry eNewsletter

June 3, 2008
Volume 8, Number 10

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» INDUSTRY NEWS

Petfood settlement reached, gets initial approval

A Camden, New Jersey, USA judge granted initial approval late last week to the settlement in which companies that manufactured or sold contaminated petfood would compensate pet owners for all costs related to the death or illness of their dogs and cats. Under the deal, granted initial approval by U.S. District Judge Noel Hillman, pet owners in the United States and Canada would be notified of the settlement by June 16, 2008 and would have until early December to submit claims. A final hearing on the US$24 million settlement is scheduled for October 14, 2008, according to the Associated Press. The US$24 million sum is in addition to the US$8 million already paid to some pet owners.

The settlement doesn't pay pet owners for pain and suffering from injuries to their pets.The settlement allows pet owners to apply for expenses associated with deaths and illnesses, including the costs of veterinarians, time missed from work to care for sick animals, replacement pets, burial expenses and even property damaged because animals got sick. The companies, including Menu Foods, will create a fund allowing consumers to recover up to 100% of their money damages, if they can document their claim, lawyers representing both sides said. Pet owners can request up to US$900 for undocumented claims in case they didn't save all their receipts. Owners can also be reimbursed if they had their dogs screened for contaminated food - even if they turned out to be healthy. Plaintiffs lawyers are seeking US$6 million of the settlement in fees. Money left over after all claims are paid is to go to animal-welfare charities.

FDA delays implementation of the Reportable Food Registry

In the May 27, 2008 Federal Register , the Food and Drug Administration (FDA) announced it is delaying until spring 2009 the implementation of the Reportable Food Registry mandated under the FDA Amendments Act of 2007. The FDA Amendments Act is the law enacted last September that requires FDA to establish a web-based electronic portal that persons registered with FDA under the Bioterrorism Act of 2002 (including food, feed and feed ingredient manufacturers) are required to use to report adulteration incidents for products that have left their control and that meet the threshold of posing a "reasonable probability" of causing "serious adverse health consequences or death to humans or animals."

Under the law, such reporting is required within 24 hours after the affected party determines that the adulterated product meets this threshold. Importantly, no reporting is required under the law if the manufacturer detects the adulteration prior to any transfer of the product and either took steps to correct the adulteration incident or destroyed the adulterated product.

FDA is required to implement the Reportable Food Registry by Sept. 27, 2008. However, the agency is using its discretionary authority to delay implementation so that the registry can be integrated with its new Business Enterprise System (web-based computer interface) currently being developed. FDA states that this system is expected to be operational in spring 2009, at which time reporting will be required. FDA states in its Federal Register notice that it acknowledges that reporting will not be required until the electronic portal is activated. However, the agency said that during the "interim," it "strongly encourages" persons to continue to report incidents of adulterated food, feed or feed ingredients through existing mechanisms, such as FDA district offices.

FDA is required under the law to issue guidance to the regulated industry by June 27, 2008 about submitting adulteration incident reports through the registry. In the Federal Register notice, FDA also poses four questions on which it seeks comments by August 11, 2008, including obstacles the regulated industry anticipates having in complying with the requirement to report adulteration incidents through the registry. To comment on these questions, click here.

PFI defeats California bill, Minnesota "Recipe" bill dies

The Pet Food Institute (PFI), worked closely with the California Manufacturers and Technology Association and Grocery Manufacturers Association, to defeat a proposal in California, USA that would have required a telephone number and country of origin information on petfood labels. The bill SB 1773 was authored by Senator Corbett and initially would have required that country of origin information for all ingredients be listed on petfood labels. Later the bill was amended to require that country of information be listed on company Web sites, another requirement that PFI opposed.

In California, bills estimated to cost the state more than US$50,000 per year undergo an additional approval process in the Appropriations Committee called suspense. PFI and ally organizations convinced the Appropriations Committee through strategic lobbying and information provided that the cost of the bill would be significantly higher than the threshold, thus detaining the bill in the suspense process. The Appropriations Committee reviewed the bills authored by Senator Corbett and decided not to release SB 1773. There is still a bill in California - PFI calls it "problematic" - that would ban the use of perfluorochemicals, substances often used as a grease barrier in multi-wall packaging, that is progressing through the legislative process. PFI is currently working with a coalition to oppose the bill.

In other US bills affecting the petfood industry news, Minnesota HF 5318, a bill to require that petfood companies register product recipes with the state for petfoods sold only in packages of 10 pounds or less, died when the legislature body adjourned for the year. PFI is still seeking to determine whether the proposal is backed by the Minnesota Department of Agriculture and will monitor future legislative activity in Minnesota for any similar proposals.

Royal Canin steps up quality control in response to critics

Royal Canin Canada plans to enhance quality control programs at its petfood plants following a year in which product recalls and lawsuits rocked the industry. Brent Matthew, the company's veterinary division director, said an infrared system will monitor incoming ingredients to determine if they require further examination and sorting. Other measures will also ensure finished products meet new standards before entering the market, according to Matthew.

"Those two things in combination represent a very potent and enhanced quality assurance/quality control program, all of which relates to being able to provide assurance of product safety," Matthew said. "It permits us to be able to pick up things that have no business being in the ingredients, identifying them as inappropriate and putting it aside."

During last year's recalls, a line of Royal Canin Canada specialty foods was affected and the company is taking great lengths to make sure such a catastrophic event doesn't occur again. "Yes, our company has been hurt. Yes, we have to face where we are responsible, even though we are not guilty," said Xavier Unkovic, chief executive of Royal Canin Canada. "But we also have to protect our customers, and this is what we are doing now. We learned the hard way. Believe me, that was tough for all of us."

Unkovic also responded to criticism from a Toronto-based pet nutrition advocate and petfood industry critic. Carol Auld recently said quality control is generally lacking in the industry. She also questioned whether a new relationship between Royal Canin Canada and the Ontario Veterinary College at the University of Guelph is appropriate and whether it will lead to independent research and improved animal nutrition. The veterinary college and Royal Canin announced a deal this spring to establish the US$3 million Royal Canin Veterinary Diet Endowed Chair in Canine and Feline Clinical Nutrition. "Through our relationship with the University of Guelph, we are thinking about the future health of dogs and cats that will be enabled by the research being done at the university," Unkovic said. Vet college dean Elizabeth Stone went on to say that the chair would be independent. Royal Canin said it was also logical to establish the chair at the university because of the massive investment the company is making in the new plant in the Township of Puslinch, where the university is located. The approximately US$60 million petfood processing facility will be completed this summer.

Australian petfood to get an extra helping of camel?

The Northern Territory Parks and Wildlife Service of Australia is pushing for feral camels to become the new pet meat. Spokesman Glenn Edwards says kangaroos are commonly used for animal food but a recent drought in the country has caused a population decrease and an increase in ingredient prices.

Pastoral farmers are also concerned about the booming camel numbers, as more than a million currently roam across Central Australia. Edwards says there is certainly enough demand for camels to become a viable option. "Processers are looking for cheap protein to go into petfood. Obviously they're looking at camels and there are small operations already happening where camels are used for petfood."

Hawaii settles seperate Menu Foods suit

Approximately 2,000 dog and cat owners in Hawaii, USA won a US$240,000 settlement in a class-action lawsuit against Menu Foods late last month. The settlement was reached on behalf of consumers who purchased contaminated petfood and also included those who had taken their pet to a veterinarian for an evaluation following the consumption of the recalled food.

"The settlement is extremely significant because it's the first settlement in the US brought on behalf of pet owners," said Honolulu attorney Tom Grande. He and attorney Emily Gardner said they pursued the litigation seperately from the US mainland to ensure recovery for Hawaiian pet owners. "In the national settlement, if there's any money left over, there's no gurantee that our state would get its fair share," Grande went on to say.

» MARKET DATA

Each month the Petfood Industry eNewsletter will bring you the latest market data available from several different sources including Euromonitor International, Packaged Facts, Information Resources Inc. (IRI) and ACNielsen.

0806PETENewsData

Dog food in Columbia

According to the latest research from Euromonitor International, product segmentation in the dog food sector continues to be the strongest trend in Columbia. Manufacturers continue to develop specialized formulas based on breed, age, activity levels and health needs, expanding their existing product portfolios.

Specialized products were originally launched in premium brands, such as Eukanuba and Pro Plan, mid-priced products like Nestlé's Purina and Effem's (Mars Inc.) Pedigree also offer products segmented by age and level of activity.

The ability to compete across price platforms and in both wet and dry formats keeps multinational Nestlé Purina PetCare de Colombia SA firmly in the driver's seat. The company claimed a 38% market share in 2007. Larger domestic players focused instead on more affordable dry foods. Finca SA produces economy dry food and captured 18% of value sales in 2006, while Solla SA's mid-priced and economy dry dog food products captured a 10% value share. Effem Colombia Ltda., a subsidiary of Mars Inc., trailed behind with a 6% value share through its Pedigree brand, which is present only in the mid-priced platform.

Price is still a primary factor in the purchasing decisions of Colombian dog owners. For many households, prepared dog food is a relatively new product. New users tend to purchase an economy brand first, then trade up to mid-priced products when their budgets permit. Even though consumers are looking for a bargain, they are increasingly looking for premium attributes at lower price points, such as life-stage products like Nestlé Purina's Puppy Chow or Pedigree Puppy.

For more information about Petfood and Pet Care Product reports from Euromonitor International and to buy reports online, visit

http://www.euromonitor.com/Pet_Food_And_Pet_Care_Products?DCMP=AFC-petfoodemail

» PRODUCT NEWS

New Version of PCS by CSB System

CSB's Producer Clearance System (PCS) automatically produces both statements and payments of raw material purchased. According to the company, it can help managers make decisions when raw materials are influenced heavily by natural fluctuations in each market. CSB goes on to inform that the use of PCS can help with business processes for purchasing planning, statement, management and analysis. www.csb.com

All-around wrapper

The Protecta Pack Hibrid from EDL offers the protection of sleeve wrappers with the flexibility of a stretch wrapper. According to the company, this system combines bundling and stretch wrapping technologies, applying a sleeve of poly foam, bubble wrap, LDPE or high abuse film to protect the top, bottom, leading and trailing faces and edges of a package. More film is then applied to help secure the package's integrity. The Hibrid system wraps random sized products, and adjusts the tension of the stretch film to the shape and size of the product, states EDL. www.edlpackaging.com

Zipper-included film

Inno-Lok is an automated filling film with the zipper material already built in. The zipper, which is manufactured by Cello-Poly Corp., is pre-applied transverse to the edges of the film and does not travel into the sealed area. According to the company, this application eliminates zipper distortion and leaking, which can occur during the heat-sealing process with traditional zippers. Roll stocks with Inno-Lok have a maximum web width is 48 inches laminated (56 inches non-laminated) and a maximum zipper width of 16 inches. www.cello-poly.com

Cutting frozen meat

The Dicecut 501 PL by Magurit is a solution for the production of cubes and strips from frozen blocks. According to the company, with this machine standard meat blocks with maximum sizes of 830 mm length, 500 mm width and 220 mm height can be cut into cubes, starting at 5mm to 50 mm. Depending on the product the process temperature can be between -4° C and -15°C. Cleaning isn't difficult, says Magurit, and the whole machine can be cleaned with high pressure washers and all commonly used detergents. www.magurit.de

» RESEARCH NEWS

Dietary protein and GFR

This study sought to determine the effect of different protein and amino acid concentrations on renal function as measured by glomerular filtration rate (GFR) and body composition in a six month study. Seventy normal adult dogs were randomly assigned to five dietary protein levels with and without amino acid fortification. GFR was measured by iohexol clearance while body composition was determined via dual energy x-ray absorptiometry (DXA). GFR and DXA were measured before and after six months on treatment. Foods were formulated to contain 15, 19, 22, 25 or 30% protein. Dietary protein had a significant quadratic and linear effect (P<0.05) on GFR. Increased GFR was attained through either increasing above or reducing below 21% protein. These data show that renal function as measured by GFR may be increased with increasing protein and through restricting excess protein.

Source: D.E. Jewell, 2008. Canine dietary protein influences glomerular filtration rate in adult dogs. FASEB J. 22: 444.1.

Oats reduce canine cholesterol

Hypercholesterolemia occurs in various diseases in dogs, such as chronic kidney disease, hypothyroidism, diabetes mellitus, cholestasis and hyperadrenocorticoidism. This study investigated whether dietary oats reduce serum cholesterol in dogs. Forty-eight healthy adult beagles were fed a basal dry dog food for 4 weeks. Afterwards, dogs were randomly divided into 4 groups with 12 dogs per group. Each group was given either the basal food (control), basal food with 5%, 10% or 20% of oat groats (hulled oats) for additional 8 weeks. Serum total cholesterol was measured in weeks 0 and 8 of the study. Comparing to week 0, serum total cholesterol change was 1%, 2.1%, -5.6%, and -14.7% after dogs were fed the food containing 0%, 5%, 10%, or 20% of oat groats for 8 weeks, respectively. There was a significant difference in serum total cholesterol change between the control food and the food containing 20% oat groats (p < 0.05). The results of this study show that dietary oat at 20% may be beneficial to dogs with hypercholesterolemia.

Source: S. Yu, 2008. Oats reduce serum total cholesterol in healthy adult dogs. FASEB J. 22:1117.1.

» POSITIONS AVAILABLE

--National Accounts Manager - Pet Food

Kerry Ingredients and Flavours, Americas Region, announces the newly created position of National Accounts Manager-Pet Food (U.S.). Qualified candidates will possess the following:

Bachelor's degree in Food Science, Animal Science, Chemistry or related field of study.
Minimum 1 year proven experience in sales to the Pet Food Industry
Strong computer, written and verbal communication skills

The primary purpose of this role is to establish Kerry as a long-term supplier of ingredients to the Pet Food Industry. The position will involve customer working relationships at multiple levels and functions and requires 40-50% travel throughout the U.S.

Kerry offers a competitive salary and benefits package and is proud to be An Equal Opportunity Employer. Interested candidates may apply on-line through www.kerrycareers.com.

Additional details about Kerry may be viewed at www.Kerry.com.

--National Sales Manager/Sensora^TM

Summary: Manage, develop and maintain strategic customer relationships to maximize Company sales and profits; service existing customers and work with target customers in North America. Implement sales strategies determined by the Business Plan.

Responsibilities:
-Sell flavor and palatability products to the North America pet food industry.
-Build, develop and manage relationships between Sensora^TM and its targeted customer base.
-Identify customer requirements for new portfolio items.
-Build knowledge of the competitive landscape.
-Participate in the strategic commercial planning process. ensuring adherence to Company guidelines and standards
-Provide information towards market area forecasting. Submit data as needed to maintain optimum customer satisfaction and Company profitability.
-Maintain current knowledge of computer applications, technical knowledge of specific focus areas and other requirements to perform job functions; participate in training courses as directed.
-Communicate with management/executive personnel, keeping them informed regarding issues/changes in the assigned areas.
-Apply cooperative work skills, build consensus and contribute to Company goals and values.

Reports to: President, Simmons Feed Ingredients (a Sensora^TM member company).

Location: Midwestern U.S.

Position Requirements:
-Minimum B.S. food science or related education and minimum 5 years of technical ingredient sales experience.
-Pet food-related and/or savory flavor-related experience preferred.
-Requisite sales training and proven track record
-Ability to work with cross-functional teams
-Basic skills in Microsoft Word, Excel, PowerPoint, and Project
-Basic knowledge of food ingredient functionality

The successful candidate will be an excellent communicator, will be adaptable, will demonstrate initiative and judgment, will be service oriented, will embrace a continuous improvement approach, will understand and work well in a cross-functional environment, will embrace self-development, and will work to the highest standards.

The Company offers a competitive compensation package with benefits including 401k, health insurance, vacation and holidays. To apply for this position please submit a current resume via email to james.northern@mane.com.

» CONTACT INFO

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