Development in danger, or a dangerous development?

When observing today's dog and catfood market in W.Europe I can not help but think that it has lost its drive and dynamism. This once vibrant and challenging market has become dull and predictable.

The (unexpected?) high impact of private labels/own brands - or whatever the current buzz-word may be - looks to be one of its causes.

The evident lack of genuine innovation is another one; what is called innovation now is nothing but tweaking some product-features.

However, what appears to be the main reason for this dullness is that there is so much focus on competitive ac tivity that market-chances are overlooked. It is as if management in the industry is frightened to take some necessary steps, let alone bold ones!

I maintain to say that as long as the W.European petfood industry has not reached prepared petfood penetration (PPP) levels as shown in the US market there is room for higher growth than is demonstrated today.

When do we return to "new and exiting"?

Most product-categories – and why should petfoods be an exception? - flourish on the basis of new product introductions. But then genuinely new and meaningful. Not the umpteenth line-extension or further segmented offering. These look to have shelf-dominance as their primary objective.

Yet, how can we expect "new and exiting" in an industry in which the key technologies have been introduced over 30 years ago?

Of course these technologies have been improved over time – mainly with manufacturing efficiency as its main objective -, but conceptually nothing changed.

So, which are the challenges that face the industry if it wants to return to the road of growing the market?

Ingredients is a key issue today and will probably remain so for some time to come. The need to search for alternative protein, fat, carbohydrate sources has clearly announced itself.

Companies that dedicate some of their resources to this search will end up with a strong and sustainable competitive advantage, the more so if they buy the bulk of a limited supply.

A.o. the African continent is likely to be a provider of alternative ingredients. What is now used as and in human food only can be a useful alternative in formulating outstanding dog and catfoods.

The other challenge is one of size.

The divide between the big operators in the industry and the medium-sized and smaller ones becomes wider by the day. This is certainly visible in the R&D/new product development efforts.

The big operators appear to be protecting what they have today, whereas their counterparts lack the funds to challenge them. The solution for this dilemma can be (and as far as I see it, should be) that the medium-sized and smaller operators join forces in new product development. Together they must be able to introduce new and breakthrough technologies in the industry (the human food industry provides some examples that can be borrowed and adapted), thus expanding the opportunities the market continues to offer.

By the way, most of the times it is exactly that: the smaller manufacturer that creates a new niche and in doing so gives new impetus to the market.

A market which is incidentally made up of end-buyers who appreciate added value and are willing to pay for it.

As far as I can see it the question-marks in the title of this article should in fact be exclamation marks. If no serious steps are taken to change one's tack, I foresee that the industry will remain as dull and predictable as it is today.

Who has the guts to bring drive and dynamism back to the market by taking the required bold steps?

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