Partner in Pet Food: Innovating to the top of the market
Europeâ€™s second-largest private label petfood producer is committed to fulfilling customer demand while remaining ahead of market trends
Hungary-based Partner in Pet FoodÂ (PPF) has made some significant changes as a company since its last Petfood IndustryÂ profile in 2008, beginning operations as an independent company in January 2009 with a separate management and a new strategy. Growth was accelerated and internal processes were improved to provide customers with better products and service, according to the company, and PPF is now the second largest private label petfood producer in Europe.
In June 2011, PPF was acquired by private equity firm Advent International. Management, together with the support of Advent, has been able to further accelerate growth, and has increased investment in new technologies and packaging formats in order to meet customer demand and achieve double-digit growth rates.
Two developments in the past 12 months have been particularly fortuitous for the company, according to CEO Attila Balogh. The first is the launch of the pouch pack format for their products, made in a dedicated production facility in the Czech Republic which opened in August 2012. "Our sales in this sector were growing dynamically, so it was important for PPF to produce these ourselves in order to meet customer demand and ensure the highest quality and service levels possible," says Balogh. "This also supports our focus on innovation and allows us to further speed up progress in this area. Sales have exceeded our expectations and as a result we are investigating further expanding the factory, which is running at almost full capacity, in the near future."
The second significant development for PPF has been the launch of international petfood brands PreVital and SoftMix. PreVital is a premium cat brand available in pouch (wet chunks) and dry formats, developed for the selective cat and cat owner who want only the best, according to the company. SoftMix is a brand for dogs which provides a mixture of premium dry kibbles mixed together with semi-moist kibbles. This combination not only provides a high-quality product, but further improves palatability for the dog.
But what truly sets Â PPF apart from its competition is the company's commitment to its customers, to the pet owner and to the consumer, the pet, says Balogh. And a cornerstone of that commitment is PPF's employees. "We strive to employ the best people and provide an environment of personal growth and culture of responsibility and ownership," he says. "By doing this, and investing in our people, PPF is able to effectively implement our strategies and provide a superior quality product and service."
When Balogh became CEO of PPF in 2009, part of his focus was on the company's connections between its customers and employees. He and his team first spoke to the customers directly to find out what their needs were-what they wanted in terms of a quality-to-price ratio, what kind of innovations they were looking for and what would make them think of PPF first. Then, employees were consulted to get an idea of how they felt about their own company. "Part of the transformation was making sure we had the proper employees in place," says Balogh. Today, the company is made up of a high calibre of employee that understands the needs of a global customer base, and PPF continues to invest in training to keep them in top form.
"This has resulted in PPF being the market leader in volume in all countries where we have operations," says Balogh. "According to Nielsen market research, in 2012 PPF was volume market leader in The Netherlands, Poland, the Czech Republic, Hungary and Slovakia. This is a significant achievement and is a result of the attention to detail and continuous focus our employees have to customer satisfaction. It's something we're very proud of."
Current petfood market trends Â are focusing on three things, positioning PPF to maintain its leadership: a shift to more premium-quality petfood, the growth of single-serve options, customer acceptance that private label quality matches and sometimes exceeds branded product quality. "In our opinion, the petfood industry is currently undergoing a rapid change, with the level of innovation increasing to meet the needs of the customer," says Balogh. "For those companies, such as PPF, that are able to maintain the pace and be at the forefront of this acceleration, it is a wonderful opportunity.
" Unfortunately, not all will be able to adapt and keep up, so some will eventually be left behind," he says. "Most will not go away, but simply be relegated to a small niche or geography and carry on business at a reduced scale. What will remain will be a group of fewer companies, but on a larger scale. A simple analogy is the gradual consolidation of the retail trade throughout Europe over the past few decades."
The idea of innovation in private label, as well as the focus on premium products, comes down to listening to the customer and filling a demand. "This is nothing new for branded companies," says Balogh. "Branded companies have, for a very long time, focused on innovation. Private label has been slower to follow innovations. That's one change that PPF made in 2009-2010. The consumer's always looking for something new and something better.
"In general, we're doing it because the customer demands it," he says. "It's helping the retailers increase their sales, satisfy customer demand and achieve double-digit sales growth year-on-year."
Overall, PPF plans to Â continue building on its success. "We have doubled our rate of investments since 2011 and will continue to invest at the current rate for the foreseeable future in order to sustain our dynamic growth and ensure our customer demand is met," says Balogh. "PPF will continue to grow in the markets where we have a leadership position and will expand into new markets, as well. It's very important to always increase that investment, to satisfy the need of the consumer. The biggest opportunities can be realized when one follows market trends or is a 'thought leader' and helps to influence these trends. PPF is clearly in this position and will continue to help set the trends as well as follow them."Â