Petfood Industry Electronic Newsletter February 06, 2007

February 06, 2007
Volume 7, Number 3

This newsletter is also available in an Acrobat PDF format. To download the PDF click on the following link: Feb06PDF.

Your free copy of the Petfood Industry Electronic Newsletter is sponsored by AFB International, maker of Optimizor® and BioFlavor® brand palatants. AFB is the petfood industry's first choice for dog and cat food palatants. For more information, please visit our website at http://www.afbinternational.com.

Here's what's been happening lately:

Industry news

Nestlé builds its first petfood facility in China
Nestlé Purina reportedly opened its first petfood processing plant in China recently. According to China Daily, Nestlé invested an initial US$10.26 million (80 million yuan) in the factory located in the Tianjin Economic Technological Development Area. Nestlé chose Tianjin, a port city close to Beijing, to meet demand from the country's two largest markets—Beijing and Shanghai. The Tianjin factory is expected to produce some 20,000 tons of petfood a year.

Before building this first domestic plant, Nestlé's cat and dog food sold in the Chinese market was imported from the United States. The Tianjin factory increases Nestlé's competitiveness with Mars, which started producing petfood domestically in Beijing about 10 years ago.

Thiele Technologies acquires SWF Companies
Thiele Technologies Inc. has announced the acquisition of SWF Companies of Reedley, California, USA, a provider of automated packaging machinery, from Dover Corporation. On behalf of SWF, Ed Suarez, vice president, commented, “We are very pleased that the employees of SWF Companies have become part of the Thiele organization. We look forward to enhancing our industry expertise and capabilities, particularly in the area of cartoning, casepacking and bundling.”

Sales reach all-time record level at Hill's
Colgate-Palmolive Co. announced recently worldwide sales and unit volume growth for the fourth quarter of 2006. Worldwide sales grew 10.5% to US$3.2 billion and unit volume grew 7.0%, as reported. The very strong top-line growth was supported by a double-digit increase in worldwide advertising spending to a record level.

Hill's (14% of company sales) sales and unit volume grew 11.5% and 6.5%, respectively, to an all-time record level, according to the company release. Strong sales of Science Diet Indoor Cat food continued to drive growth in the US specialty retail channel during the quarter.

Internationally, growth was strong led by Belgium, Germany, Denmark, Italy, the United Kingdom, Australia, Brazil, Taiwan and Russia. New petfood products contributing to the international growth included Prescription Diet j/d Canine, Prescription Diet Feline Chunks in Gravy pouches and Science Plan Neutered Cat, a new veterinary exclusive product.

Pancosma celebrates 60 years
Pancosma, a manufacturer of animal nutrition products, celebrates its 60th anniversary. The company was founded in Switzerland and now has established affiliates in France, Spain, Canada, USA and Mexico with Russia, Vietnam and China planned for the near future.

Speakers for Focus on Treats
Petfood Focus on Treats is a comprehensive look at the thriving pet treats market. It will immediately follow Petfood Forum 2007. Presentations are scheduled for Wednesday, April 18 and Thursday, April 19, 2007, at the Hyatt Regency O'Hare in Chicago, Illinois, USA. Following are the topics and speakers for the event:

Treat market overview: Euromonitor International's data on treat sales and trends presented by Bruce McKay, an experienced petfood industry professional.
Functional ingredients in treats: Robert Taylor, DVM, of the Discovery Channel examines the efficacy of functional ingredients and using treats as alternatives to tablets and capsules.
Treat product innovations: Paul McKeithan of Aeroglide shares his experiences with treat production—including R&D work.
Treats for other species: Andrew Messinger of Vitakraft looks at treat market development for species other than dogs and cats.
Case study—Greenies: Tiffany Bierer, PhD, of Mars PetCare reports on biometric research that led to the reformulated Greenies treat.
New packaging ideas: Paul Kearns from Exopack covers major themes such as convenience, moisture and aroma barriers and merchandising.
Treats for dental health: Jennifer Larsen, DVM, of Davis Veterinary Medical Consulting covers the science behind the exploding pet dental-health treats market.
Regulatory issues with treats: David Dzanis, DVM, PhD, of Dzanis Consulting explains the additional regulatory considerations for treats with added nutrients.

For details and to register, go to www.wattnet.com/petfoodforum/home.cfm or E-mail Marcia Riddle (attendees) at mriddle@wattnet.net or Ginny Stadel (exhibitors) at gstadel@wattnet.net.

Upcoming web seminar
Register today for a free online seminar, Using non-traditional ingredients in unconventional petfoods, to be presented Tuesday, March 6, 2007 at 2 p.m. EST. Registration is now open. Presented by Petfood Industry magazine, and sponsored by Petfood Forum 2007, join David Lummis of Packaged Facts and Dr. Greg Aldrich from Pet Food & Ingredient Technology Inc. for a discussion on the types of ingredients that are being used in the next generation of petfoods. These ingredients include fresh/frozen meats, whole animal/bird parts, and fruits and vegetables. Also hear about the opportunities, challenges and gaps encountered in compiling ingredient information necessary to develop these emerging new products. To register, click here.

Kent Feeds Inc. announces new business unit to focus on petfood growth
Kent Feeds Inc. has announced the creation of a new Pet Solutions unit to build on the success of their growing petfood business. Plans for the new Pet Solutions unit include a larger portfolio of performance petfoods and an expanded sales structure with a focus on regional and national accounts. John Howard has been named to lead the new business unit as Pet Solutions director.

A cold one for a cold nose
Terrie Berenden, a pet shop owner in the southern Dutch town of Zelhem , has created a beer for her Weimaraners made from beef extract and malt. Berenden contracted with a local brewery to make and bottle the nonalcoholic beer called Kwispelbier. It was introduced to the Dutch market recently and advertised as “a beer for your best friend.” “Kwispel” is the Dutch word for wagging a tail. The beer is fit for human consumption, Berenden said. But at US$2.14 (or 1.65 Euro) a bottle, it's about four times more expensive than a Heineken.

New Wellness dry cat food recipes launched
The Wellness brand of natural petfood and treats has announced that its feline dry nutrition line has been redesigned. According to the company, it has created customized nutrition based on a cat's lifestyle. Wellness says it selected ingredients that help solve some of the most challenging health problems for cats, including urinary tract health and weight management, as the foundation for its special all-new Wellness Dietary Solutions recipes—Wellness Complete Health, Wellness Healthy Weight, Wellness Kitten Health and Wellness Indoor Health.

Survey: Half of pet dogs in Japan have reached old age
According to a news item in The Asahi Shimbun, about half of pet dogs in Japan are at least seven years old. An official with the Japanese Pet Food Manufacturers Association reportedly said the high ratio of older dogs is a result of improved diets, better health care and safer environments. The association conducted a survey online with people from the ages of 16-69. A total of 4,235 people responded. Among them, 19.2% kept pet dogs while 14.7% had pet cats. Based on those figures, the association estimated that Japan has 12.09 million pet dogs and 12.46 million pet cats.

In households with two people or more, 49% of the pet dogs were at least seven years old. At single-person households, 45% of the pet dogs were in that age group, according to the survey. More than 60% of the pet dogs and about 80% of the pet cats were kept indoors, the survey showed.

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.

Total US food, drug and mass merchandiser (excluding Wal-Mart) petfood sales for the 52 weeks ending December 30, 2006. UPC-coded products only. Source: ACNielsen.

Category	US$ sales	% chg vs. 2005	Unit volume	% chg vs. 2005
Cat dry	$1.0 billion	1.4%	207 million	-5.3%
Cat moist	$3.7 million	-29.9%	2.6 million	-29.2%
Cat wet	$953 million	1.2%	1.6 billion	-7.2%
Dog & cat treats	$765 million	3.4%	292 million	1.8%
Dog dry	$1.7 billion	2.9%	187 million	-1.6%
Dog moist	$45 million	-2.3%	9.7 million	-9.2%
Dog wet	$650 million	3.3%	757 million	-7.8%
Total	$5.3 billion	2.0%	3.1 billion	-6.1%

New US pet market report: an industry driven by emotion
The humanization of pets positively impacted the US pet industry, driving growth in premium petfood, luxury products and high-end services, according to Euromonitor International's new Pet Food and Pet Care Products in the USA report. Pet owners of today, baby boomers and young professionals, are fueling the demand for quality food and unique products as they consider their pets family members or even their children. The strong emotional bond Americans have with their pets drives consumers to make purchases outside of necessity.

Manufacturers further strengthened this desire to spoil pets as they continued to introduce a wide variety of food and products that appeal to every type of owner. Driven in part by strong media attention regarding the pet industry, and the unusual ways in which consumers treat their pets, the humanization of pets has even become more acceptable, as it is no longer unusual to hear pet owners refer to themselves as the mother or father of their pet, or to see pets dressed in designer clothing and accessories or even wheeled around in pet strollers.

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.

Product news

Generic case printing systems
Iconotech, a leading supplier of case printing equipment, offers equipment that prints shipping cases, wraparounds, die cuts and multi-wall kraft bags, contributing to the sustainability bottom line. On-demand printing eliminates or reduces pre-printed inventory, according to Iconotech. The level of purchasing complexity and going generic eliminates small run orders, may consolidate case sizes and frees a company to shop its generic inventory. Iconotech systems also eliminate printing plates and preprinted case obsolescence. You print what you need, when you need it. Printing directly on the case also means no adding the extra substrate of labels, or their cost, to the package.

E-news

Webinars: getting your message out
A recent article by E-commerce Times noted that a Google search on the term “webinar” came up with over 9 million hits. In the late 1990s, this new application appeared online. It allows people from different places and different time zones the opportunity to simultaneously view a presentation, commonly PowerPoint, and to hear a speaker explain the details.

Webinars soon came to be recognized as an excellent vehicle for a company to get its message across to an audience. Ideally, the audience members would be an exclusive group who would be most likely to purchase the product that the company was offering.

If you are invited to attend a Webinar, you are sent an E-mail with all of the necessary information to join in at the allotted time. This form of “meeting” allows companies to focus on a target audience, thus getting the biggest bang for the buck. This is one of the most direct, most effective and cheapest forms of marketing for a company.

There is a good amount of flexibility for the company wishing to do a Webinar in order not only to attract the right attendees, but also to give them visuals and interactivity that really let the Webinar appear like a town meeting. Once you get your customers' attention in such an interactive manner, they are more likely to take the serious interest in your product or service that you are hoping for.

What works, and what doesn't, in online marketing
In an end-of-the-year survey, ad:tech and Marketing Sherpa asked online marketers what marketing tactics worked for them in 2006 and what they expected to concentrate their time and spending on in the months ahead. According to emarketer.com, the marketers expect overall online spending to rise slightly from 47% of the budget in 2006 to 49% in 2007. Not much change for a group that has largely already adopted online advertising techniques and strategies.

When the marketers were asked what worked best (and worst) the results were clearer. Search engine optimization (SEM) showed the biggest jump in 2006, while pop-up ads had the largest decline in favor. In addition, marketers like house E-mail lists, but started shying away from rented E-mail lists.

Search marketing and E-mail marketing to house lists are currently in the lead for 2007, while E-mailing to third-party lists is only going to be used by 13% of the respondents. As to new online marketing tactics that marketers are considering, blog, social network and video ads lead the way as emerging tactics in 2007.

Research notes

Natural source vitamin E chemistry and metabolism
Vitamin E is the generic name for lipid-soluble tocopherols and tocotrienols. Natural source vitamin E is derived from vegetable oils and is comprised of RRR-α-tocopherol, with very small amounts of β, γ, and δ tocopherols and tocotrienols. Synthetic vitamin E or all-racemic alpha tocopherol, formerly known as dl-alpha tocopherol, consists of eight stereoisomers and is derived from a chemical synthesis process.

All eight isomers of synthetic α-tocopherol appear to be absorbed in the intestine and transported to the liver. In the liver, RRR-α-tocopherol is preferentially incorporated into very-low-density lipoproteins by α-tocopherol transport protein (α-TPP). The α-TPP preferentially binds RRR-a-tocopherol over the other RXX α-tocopherol forms, with minimal binding of SXX isomers. The β, γ, δ tocopherols and all tocotrienols are almost entirely excreted in the bile back into the intestinal tract for elimination in feces.

A rat fetal resorption assay was used to determine the relative biological value of synthetic and natural source vitamin sources. In this assay, based on 1941 data, d-α-tocopheryl acetate had a biological value of 1.36 as compared to dl-α-tocopheryl acetate. Recent data suggests that the biological value of d-α-tocopheryl acetate is at least two times that of dl-α-tocopheryl acetate, likely due to the rat fetal resorption assay overestimating the value of the synthetic vitamin E source and underestimating the value of d-α-tocopheryl acetate.

Source: D.A. Hill, ADM Alliance Nutrition, Inc., 2007.

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

WATT Books

See our offers:
Petfood Industry Books
Petfood Forum and Focus Books

Contact information

To submit any information you would like us to consider for publication on our website, in the printed magazine, or on this newsletter, E-mail your information to Jenny Kvamme, DVM.

We are always interested in hearing your ideas about the value of this newsletter, or whether you have any problems downloading or viewing this document. If you would like to discontinue your free subscription to this newsletter, or if you have additional E-mail addresses to add or remove from our subscriber list, please contact Petfoodindustry@wattnet.net.

WATT Publishing Co.
Tel: +1.815.734.4171
122 S. Wesley Ave.
Mt. Morris, Illinois 61054 USA