Del Monte Foods is one of the largest and most well-known
producers, distributors and marketers of premium branded and
private label food and pet products for the US retail market.
The San Francisco, California, USA-based company generated US$3
billion in net sales in fiscal 2006, with 40% of its sales
coming from a powerful portfolio of 14 pet product brands
including Meow Mix, Kibbles n Bits, 9Lives, Milk-Bone,
Pup-Peroni, Gravy Train, Nature's Recipe, Snausages, Pounce and
Del Monte is, as a company, focused on two very powerful
business trends. The first is "Health and Wellness" on the
human side. The second is "Pet as Family Member." Del Monte
believes it is uniquely positioned, given its portfolio and the
core competencies of the total company, to capitalize on those
two powerful trends.
Recently, I spoke with Jeff Watters, senior vice president
of Del Monte Pet Products. He provided his perspective on how
the company has been doing since its most recent acquisitions.
According to Watters, the integration of both Meow Mix and
Milk-Bone has gone very smoothly. There has been a positive and
immediate response to the company's changes in programming and
increases in investment in the brands.
Del Monte's total market share of the cat food category is
growing nicely with the addition of Meow Mix. "We've
capitalized on the momentum that Meow Mix had coming into the
acquisition and we've actually built off of that. We have also
taken the work that the Kraft team did on Milk-Bone and we
believe elevated Milk-Bone to an even better place over the
last six months or so," he says.
Watters explains that Milk-Bone was a non-core business for
Kraft. "I think even the Kraft folks at the time would have
admitted that it didn't get its fair share of attention. It
certainly gets its fair share of attention within the Del Monte
pet portfolio, so those businesses have both responded quite
nicely to the attention, focus and investment that they've
received over the past six to eight months," he says.
Watters notes that the Milk-Bone and Meow Mix businesses
have allowed Del Monte to improve its innovation platform. "I
think they have really enhanced our relevance to both our
consumers and our retail customers. We expect very big things
for both of these businesses over the next 12-18 months."
In the past year, Del Monte has launched its share of new
products. Kibble n' Bits Brushing Bites, the first mass
marketed oral care dry dog food, is the most successful new
item launch into the dry dog segment in the last couple of
years, according to Watters.
Del Monte has also had strong launches with Pup-Peroni Ribs,
as well as its 9Lives Daily Essentials. "We feel as though
across the board we have had a very strong legacy of
innovation," Watters comments. Innovation is key to Del Monte's
future success in the pet product arena as, historically, its
core market has been the mass market consumer.
"We do a lot of work to mine insights associated with
certain consumer segments in the mass market, particularly what
we call the 'Dogs and Cats are People Too' consumer
segments. These are people that very much epitomize the pet
as 'family member' or the 'humanization of pet'
trend. That target tends to be more of a mass market consumer
than a specialty or niche consumer," he notes.
Del Monte sees opportunity to not only develop that core
market, but also to extend its current platform into niche
segments, such as the specialty user or the
premium/superpremium target over the next several years.
According to Watters, growth starts with understanding the
company's consumer target and ensuring that it is developing
new products and/or solutions that meet the needs of pet
Another key to retail success is to develop point of
purchase "excellence," to ensure that the consumer shopping
experience is a successful one.
Watters believes that Del Monte leads the competition in
areas of innovation and thought leadership. "We recognize that
we are probably not the deepest-pocketed competitor in the pet
category. We have some very well-established, entrenched and
rich competitive sets, and as a result we have to work
He notes that while product innovation is central to its
success, Del Monte needs to think more broadly to further
solidify its position as an industry leader. "Thought
leadership, as we see it, is both the way we carry our message
to our consumer and the way in which we carry our message to
our retail partners," Watters says. Del Monte has been
successful in its approach to category management and the
tenants of merchandizing, assortment pricing and shelving
optimization with what it calls the "Star Set." This helps
retailers build their shelving schematic around "consumer need
states," according to Watters.
"We're going to place our bets on our ability to think more
clearly about consumer and customer needs, and we hope that our
platform of innovation and thought leadership will ultimately
be differentiating for Del Monte Pet Products and presumably
lead us to greater market success than we enjoy today."
Overall, Watters is optimistic about the future of the entire
company. "We have dramatically transformed the total portfolio
for Del Monte over the past 12-18 months," he notes.