SMALL ANIMALS, BIG OPPORTUNITIES

It can be argued that the small animal category, is one of the younger ones in the pet industry; also as far as foods are concerned. But amazingly, this category looks to be one of the most traditional in the industry, especially on the food-side! With some exaggeration one could say that the manufacturing-investment in a concrete mixer and a shovel could put you in business. However, despite the relatively low entry-barriers (in comparison to manufacturing foods for other species) there are not many manufacturing newcomers in the small animal food arena.

Other than for dog and catfoods, product-development for small animal foods only got genuine attention from the manufacturers in the last decade or so; some companies took the lead and improved concepts saw the light. In essence nothing revolutionary, because me-too products with (exactly?) the same proposition followed rapidly. New product development in most cases meant an upgrading of the traditional mixes of cereals and dried vegetables with an added spoonful of X. Probably more to please the consumer's eye (rabbits are colour-blind!) the number of components increased and foods became visually more attractive; the intrinsic nutritional propositions hardly changed.

Because of the lack of genuine innovation in the category, price remained one of the key weapons used in a highly competitive environment. The offerings of the various manufacturers did not allow for significant price-differentiation; at least not in the eyes of the distributive trade. After all, to a great extent the products looked alike!

The owners of small animals might take another look at pricing once the product – and brand-proposition changes in a meaningful (for the consumer) way. As with dogs and cats there is a category of small animal owners that seek the best for their animals; to enhance the animals well-being and to save on vet bills! There are already clearly noticeable tendencies where premium offerings fetch significantly higher prices and generate higher margins in comparison to the more standard products. But this segment, although growing, still represents a smaller part of the total market.

If we look at the statistics we can say that small animal populations grow worldwide. And small animals are increasingly seen to be a pet, a part of the family. This implies that the emotions surrounding the keeping of small animals are changing and thus the attitudes of the owners.

This manifest change offers great branding and new product development opportunities for manufacturers that seek to upgrade their portfolio of products; and wish to build a sustainable position in an increasingly attractive product-category. The market is there, the consumer is open to relevant change and the distributive trade will embrace any concept and brand that enhances the margin-potential of the category.

In upgrading their portfolio of products the food + concept can be a key element of differentiation. Comparable with the developments we have noticed in superpremium dog and catsfoods. Food + is a "merger" of excellent nutrition for wellness + some functional ingredients. The inclusion of yucca extract to fight nasty smells is a typical example; but now becoming so common in the formulation of small animal foods that the competitive advantage is eroded. Prevention is key in the proposition. But preventive claims are surely subjected to severe scrutiny from the regulatory authorities.

One of the biggest challenges in the small animal food-category will be the search for new technologies. To get away from the traditional mixes which for the untrained eye of the owner are one and the same. Extrusion is used as "another" technology, but extruded small animal foods sofar did not have a noticeable impact in the market. Manufacturers of small animal foods will be wise to look at human food technologies to achieve a breakthrough in the product-formats they can develop.

All in all small animal foods offer excellent business opportunities for those who will break with tradition by being genuinely creative and prepared to invest in technology and the market; and above all have the ambition to change the face of the category!

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