Petfood Industry Electronic Newsletter December 05, 2006

December 05, 2006
Volume 6, Number 23

This newsletter is also available in an Acrobat PDF format. To download the PDF click on the following link: Dec05PDF.

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Here's what's been happening lately:

Industry news

Nestlé to buy Green's for US$107 million
Nestlé SA has agreed to buy Australia's Green's Foods Ltd. for US$107 million in order to gain a larger slice of Australia's petfood market. Green's petfood business sells Supercoat dog and cat foods. As part of the deal, Green's will sell its consumer food unit and its stake in house-brand dog food label Bestcare to Guinness Peat Group Plc. and CVC Capital Partners Ltd. The deal is expected to be complete by March 2007.

SPF USA to build petfood ingredients facility in South Carolina
SPF USA recently broke ground on a new petfood ingredients manufacturing facility in Greenwood, South Carolina, USA. The US$12 million facility will create 70 new jobs for the area. According to the company, production is expected to start by the end of 2007. SPF reportedly considered more than 100 sites for their new plant in the US.

Hinkens joins FSNS
Jay Hinkens has been chosen as the laboratory manager for Food Safety Net Services (FSNS) in the Dallas/Fort Worth, Texas, USA, facility. During his 17-year career in the laboratory testing industry, Hinkens has served as a consultant, laboratory director, technical sales manager and laboratory manager.

US/Canada trade meeting held
The Pet Food Institute (PFI), in conjunction with the Pet Food Association of Canada (PFAC), recently brought together representatives from both the US and Canadian petfood industries to meet with officials from USDA Animal and Plant Health Inspection Service (APHIS) and the Canadian Food Inspection Agency (CFIA) to share concerns on the possible trade disruptions associated with each government's rules to combat BSE. With Canada 's standing as the US 's largest trading partner for petfood, with 2005 US exports reaching US$338 million, new Canadian rules currently under consideration that would require individual health certificates for each petfood shipment are causing concern to industries on both sides of the border.

“This was a wonderful opportunity to attempt to harmonize requirements where possible and reduce the fiscal impact of the final rules on both the respective governments and the industry,” said PFI vice president of technical and regulatory affairs, Nancy Cook. “We very much appreciate the willingness of the agencies to come together and meet with us to help work through these issues,” she added.

Representatives from other groups with members interested in petfood trade included the American Pet Products Manufacturers Association (APPMA) and the American Feed Industry Association (AFIA).

Exciting roundtable expected at Petfood Forum 2007
One of the general sessions at Petfood Forum 2007 will feature a thought-provoking roundtable of petfood company executives. They will share their thoughts on petfood industry successes and challenges, and offer some of their predictions. Participants will include:

Doug Cahill, president, Mars Petcare US;
Brian Connolly, co-owner, Castor & Pollux Pet Works; and
Ladd Hardy, senior vice president, Nutro Products.

Petfood Forum 2007 (April 16-17) will be in Chicago, Illinois, USA. For details and to register, go to www.wattnet.com/petfoodforum/home.cfm or E-mail Marcia Riddle (attendees) at E-mail: mriddle@wattnet.net; Tel: +1.815.734.5633 or Ginny Stadel (exhibitors) at E-mail: gstadel@wattnet.net; Tel: +1.815.734.5691.

Taiwan petfood market developments
The US exported US$23 million of petfood to Taiwan in 2005, a 53% increase over 2004 exports. Although the US leads (in close heat with Australia), Taiwan still imports petfood from a diverse range of countries. In 2005, Taiwan's imports of petfood totaled US$57 million, a nearly 14% increase from 2004. US petfood imports continue to recover from an 80% fall due to BSE concerns in 2003; rebounding in 2006 is expected to continue over the next few years and market size expected to increase. With renewed effort from US petfood exporters, the 40% US market share could continue to grow, solidifying the US position as the chief petfood exporter to Taiwan.

Taiwan's rapid globalization has led to an increased focus on health and nutrition for everyone, including household pets. Traditionally, Taiwan household pets have been fed leftovers, but rising income and western influence have led to increased demand for specifically-manufactured petfood. On the whole, Taiwan generally follows pet trends set in the US or Japan. For the entire USDA Foreign Agricultural Service report, click here.

Eukanuba brand makeover begins
Procter & Gamble (The Iams Company) has enlisted a new agency, Wieden & Kennedy, to give its Eukanuba brand of petfood a major overhaul. The latest breed-specific products are being promoted via a print campaign with the tagline “Feed the Breed.” In March 2007, the brand is expected to roll out a revamped line-up that includes some specific formulations for Golden Retrievers, German Shepherds, Dachshunds, Boxers and Yorkshire Terriers.

Eukanuba needed a brand proposition focused around the pet specialty channel. The brand has seen flat sales to slightly up in the past five years, while losing share in this category. The new position stems from the nature of specialty shoppers. They are highly loyal to one particular breed and spend a lot of time online and with upscale magazines. Because the revamp was built around the shopper, in-store work including new fixtures and adaptations of the print campaign that was also launched will figure heavily.

Market trends: brand building in the US pet products and services market
Consumer demand for premium products, big-box retail consolidation, growth in non-traditional retail channels and an influx of new competitors including powerful human brands are driving marketers of pet products and services to bolster existing brands and create new ones. A new report from Packaged Facts examines strategies in the following areas—manufacturer (aka consumer) brands, private label brands, and licensed brands—and identifies both the most promising brands and the pet-owning demographics for which brands hold the greatest appeal. For more information visit www.packagedfacts.com.

Hayssen acquires Sandiacre Rose Forgrove
Barry-Wehmiller Companies Inc. has announced an agreement to purchase the assets of Sandiacre Rose Forgrove, a division of Molins PLC. Sandiacre will be integrated with Hayssen (a division of Barry-Wehmiller) to form one of the largest flexible packaging equipment providers. The newly formed HayssenSandiacre will have a combined installed base of equipment in excess of 15,000 units.

Market data

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

US drug stores with US$1 million and over in sales results for petfood sales for the 52 weeks ending October 7, 2006. Source: ACNielsen

Category	US$ sales	% chg vs. 2005	Unit volume	% chg vs. 2005
Cat dry	$28.7 million	10.9%	6.3 million	-0.1%
Cat moist	$0.05 million	-8.5%	0.03 million	-10.7%
Cat wet	$23.7 million	-0.1%	36.1 million	-10.2%
Dog & cat treats	$18.8 million	17.1%	6.8 million	10.1%
Dog dry	$26.7 million	12.4%	4.5 million	9.0%
Dog moist	$0.02 million	-71.8%	0.02million	-86.1%
Dog wet	$11.5 million	2.6%	12.6 million	-7.0%
Total	$118 million	4.9%	68.9 million	-7.6%

New report: Premium dry dog food shows fastest growth in Argentina
Sales of dog food in Argentina grew by 16% in 2005, according to Euromonitor International's Pet Food and Pet Care Products in Argentina report. This growth is largely due to consumers becoming aware of the advantages of prepared food and having more disposable income to spend on their pets.

As consumer knowledge increases, however, superpremium brands are losing share to premium brands, as they provide similar benefits but cost some 20% less. Mid-priced brands are also losing share to premium brands, as consumers begin to recognize their additional benefits and have more disposable income to spend on prepared food. As a result, Euromonitor International's research shows that premium dry dog food value sales grew by 18%, mid-priced by 16% and economy by 15% in value terms during 2005.

Euromonitor International publishes petfood and pet care reports on 52 country markets. Click here for more information about petfood and pet care reports from Euromonitor International and to buy reports online.

E-news

Spam, Spam, Spam
According to the online security firm IronPort Systems, 62 billion spam messages a day clogged US E-mail systems in October, and that is twice the volume of the previous October. IronPort analysts cited two reasons for the increase: one, more types of spam, and two, an increase in the number of “bot” networks that deliver spam. Together they account for a record crush of unsolicited commercial E-mail. IronPort estimates over 80% of spam is delivered by bot nets. The news comes as a blow to anti-spam advocates, many of whom (after a leveling of unsolicited commercial E-mail in 2005) foresaw a decline in spam this year.

The problem is not limited to the US. A survey from the European Commission found that over half of all E-mails sent in the EU are spam, with some users reporting that up to 80% of their inboxes are stuffed with the unsolicited messages. The US accounted for 21.6% of the spam coming into the EU. China ranked second with 13.4%, and in third place was France, which accounted for 6.3% of the volume.

Product news

Bench-top O₂ analyzer
Mocon Inc. introduces the Pac Check Model 840 Package Integrity Test System. The bench-top Model 840 calculates an oxygen headspace reading, along with the real and accurate leak rate of a package. The system produces an absolute leak number based on the application of Poiseuille's law, which yields a total “hole” diameter leak size based on measurements of pressure and flow.

Seed oils
Jedwards International, Inc. has begun the contract production of borage seed oil and pomegranate seed oil. Borage oil is available with a GLA content of up to 24%. Pomegranate oil is a new addition to the company's product line. Details about the oils Jedwards International supplies, along with comparisons of the fatty acid profiles can be found online at www.bulknaturaloils.com.

Reversible, homogenizing rotor/stator mixer
Arde Barinco Inc. offers the new Model CJ-2A reversible homogenizer. The Model CJ-2A is designed to prepare fine grain emulsions and solid particle dispersions in small batches. All results obtained with the Model CJ-2A can be scaled-up to batches as high as 10,000 liters. A proprietary computer program can predict results developed utilizing this small high-shear mixer.

The Model CJ-2A has a 0.25 HP 15,000 RPM reversible motor. The unique down-mode is capable of drawing and wetting out floating powders. The down-mode can also be utilized to re-suspend any settled solids on the bottom of the process mixing vessel. The mixer comes complete with a stand and reversible variable-speed control box.

Alternative to print-and-apply labels
DataLase unveils a label replacement solution for outer case secondary packaging. DataLase Casemark requires no inks, ribbons or applicators, while being virtually maintenance-free and achieving almost 100% production uptime. According to the company, brand owners can enjoy cost savings of around 30-50% for a medium-volume line with an investment payback time of less than a year. This system is capable of delivering a consistently-verifiable bar code on-line and direct-to-carton.

The non-contact laser imaging process allows for late pack customization to take place at any point in the packaging line and even within the retail chain. This means that special offers and promotions as well as brand and product changes can be readily updated, eliminating the need for reprints.

Research notes

Adipose fatty acid composition in lipoprotein lipase-deficient cats
Normal adiposity occurs in humans and mice deficient of adipose lipoprotein lipase (LPL) activity. Subnormal adiposity found in LPL-deficient cats is indicative of limited de novo synthesis of fatty acids (FAs). In 14 LPL-deficient (3.0±0.1 kg) and 8 normal (3.7±0.1 kg) queens, FAs in triacylglycerol (TAG), phospholipid (PL) and non-esterified FAs (NEFAs) of plasma and inguinal subcutaneous adipose were determined before and after (day 38, 61, 110, 117 and 251) dietary linseed oil supplementation (30 g/kg). By day 60, LPL-deficient queens gained body weight (+0.4±0.1 kg), developed normal body fat mass (25±2%) and were enriched in 18:3(n-3) in their plasma and adipose lipids.

Adipose TAG 18:3(n-3) enrichment in LPL-deficient queens was subnormal at all sampling times and, as observed in normal queens, apparently not equilibrated by day 251. Adipose FA profiles in TAG but not PL were substantially different ( P < 0.05) between LPL-deficient and normal queens; the 16:0 to 18:2(n-6) ratio was high in LPL-deficient (2.4–4.4) relative to normal queens (1.0–1.4). In LPL-deficient queens, fed-state plasma NEFA (n-6) and (n-3) enrichments were similar to those in adipose TAG, and plasma NEFA concentration was high (0.62±0.05 mmol/L) and similar to that in normal queens after withholding diet for 16 hours.

These data indicate that LPL deficiency in cats reduces dietary FA storage efficiency, favors storage of saturated over unsaturated FAs and stimulates de novo FA synthesis substantive enough to support normal adiposity.
Source: Veltri, B.C., et al., 2006. Adipose fatty acid composition and rate of incorporation of -linolenic acid differ between normal and lipoprotein lipase-deficient cats. J Nutr 136:2980-2986.

Cystine intensifies effect of a methionine deficiency in the cat
Foot pad dermatitis has been observed in turkeys, puppies and kittens fed diets deficient in methionine. Excess cystine aggravated the lesions and decreased body weight gain in puppies and turkeys. The objective of this study was to determine whether methionine deficiency induced perioral and foot pad lesions in kittens and whether excess cystine exacerbated the lesions. Eighteen kittens were divided into three groups and offered one of three diets: diet 1, low-methionine, low-cystine (LMLC; 1.6 g methionine and 1.6 g cystine/kg diet); diet 2, low-methionine, high-cystine (HMHC; 1.6 methionine and 15 g cystine/kg diet); diet 3, high-methionine, high-cystine (HMHC; 15 g methionine and 15 g cystine/kg diet).

Kittens in the LMLC group lost body weight, whereas those in the LMHC group maintained their body weight and those in the HMHC group gained weight. Plasma methionine concentrations were significantly higher (P< 0.001) for the HMHC group than for the LMLC and LMHC groups. Plasma cyst(e)ine (sum of cysteine and cystine) concentrations were different (P< 0.001) among all the three groups. Two kittens given the LMLC diet developed mild perioral lesions. All kittens receiving the LMHC diet developed foot pad lesions and severe perioral lesions. Histopathological changes observed in perioral biopsy specimens were similar to those described in protein deficiency.

Results showed that a diet severely deficient in methionine causes perioral lesions in kittens, and that addition of excess cystine to the diet aggravates the perioral lesions and also causes foot pad lesions. Source: Strieker, M.J., et al., 2006. Excess dietary cystine intensifies the adverse effect of a methionine deficiency in the cat. Journal of Animal Physiology and Animal Nutrition 90(11-12):440-445.

Positions available

Our help wanted listings aim to inform petfood industry professionals about employment opportunities worldwide. Contact gstadel@wattnet.net for more information on placing a listing in upcoming issues.

References

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