Although the largest petfood recall ever has ceased making
daily headlines as it did from March through May, consumer
concerns over the safety of the US food supply remain at an
all-time high and will continue to transform the petfood
market. Some of this concern is warranted, and much of it
reflects a newfound public awareness of just how closely
intertwined the human and animal food supplies are.
The melamine implicated in the pet deaths was also found in
protein ingredients commonly used in human foods, including
bread, cereal, pasta and veggie burgers. And it was consumed by
more than 150,000 hogs and broilers, which were eventually
released for processing and human consumption. This joint
decision by five US federal agencies was based on tests
confirming that the meat was safe, although the Food and Drug
Administration (FDA) and US Department of Agriculture called
for additional scientific analysis.
Melamine aside, US consumers have reasons to worry. These
include E. coli infection of spinach and Salmonella infection
of peanut butter in the past 12 months and limited FDA staff
and funding. (For "10 reasons to be spooked," go to
Prior to the petfood recall, most Americans were unaware of
the alarming state of affairs with food safety. Apparently, not
even frequent contatmination or infection of human food
products was enough to warrant major media coverage, making the
amount of attention the petfood recall received all the more
Even as the media was chowing down on the recall tragedy,
the US public tuned in in surprising numbers. During the week
ending April 30, 2007, nearly three in 10 Americans (28%)
followed the petfood recall "very closely" while another 17%
said it was the single news story they followed more closely
than any other, according to the Pew Research Center. Only the
Iraq war attracted more public interest.
For years, pet industry insiders have been claiming a sea
shift in the human-pet relationship. If this doesn't affirm the
intensity of emotion, nothing will. Despite the horrific
circumstances of the recall, for petfood manufacturers able to
rise to the occasion, this high interest level may turn out to
be a positive and bellwether of things to come.
For example, Packaged Facts' June 2007 report, Product
Safety and Alternative Pet Foods: North American Market
Outlook, speculates that billions in petfood retail sales may
be in play as consumers consider switching brands. The estimate
derives from recent surveys showing the number of pet owners
who've said they are open to switching, which ranges from 8% in
a GfK Custom Research North America study to 27% in one by the
Pet Food Institute. If those percentages are applied evenly to
2006 North American petfood sales of US$16 billion, you get a
potential brand shift of US$1.3 billion to US$4.3 billion.
Packaged Facts believes those billions could soon be going
toward purchasing alternative products such as natural and
organic, raw/frozen, refrigerated and homemade petfoods, as
well as other categories explained below. Indeed, such movement
may have already started (see Figure 1).
Addressing the primary food import concern raised by the
recall, one knee-jerk reaction is "China-free." This makes
sense in some cases, such as in eliminating suspect
China-sourced ingredients. Petfood makers including Menu Foods
and Mars division Royal Canin USA are, for example, either
cutting back on ingredients from China or phasing them out
altogether. Menu says it won't resume using them until the
company and the world community are assured they are safe.
In fairness, China isn't alone in turning out below-par
foodstuffs, and in most countries, executing food safety
officials for putting the public at risk (which recently
happened in China) isn't an option. Plus, Chinese-made
ingredients are now so ubiquitous in the US food supply that
any form of scaling back without causing serious trade
disruptions would take years. But, the fact that the
China-based addition of melamine and other toxic ingredients to
ingestible products has been part of a deliberate and
widespread pattern is enough to give any consumer pause.
In the short term, therefore, consumers concerned about the
health of their pets and families may respond to label claims
like "safe" and "China-free," which, until the new mandatory
country-of-origin food labeling regulations kick in (see
sidebar), may be the next best thing. Even the often seen "made
in the USA" doesn't ensure product safety since, for example,
that Sara Lee bread you may have toasted this morning contains
ingredients (vitamin supplements) from China.
One company betting on positive consumer response is Food
for Health, based in Orem, Utah, USA, which says its products
are made from organically grown foods processed and packaged in
the US without chemical additives. Its new labeling plans call
for "safe" and "China-free" stickers on human and pet
supplements, including its Healthy Dog line.
In light of the petfood recall and the pending
country-of-origin labeling, the Packaged Facts report predicts
that "100% US-sourced" will emerge as a key petfood market
positioning in the coming months, especially among alternative
products like organic and raw foods. After the recall, Newman's
Own Organics spent weeks researching the source of the
ingredients used in its petfood line, and the company recently
announced that every ingredient in its products comes from US
Ninety percent of the ingredients used in North Hollywood,
California, USA, based Artemis Pet Food Company's human-grade
products are US-sourced, with the rest coming from Canada (7%)
and New Zealand (3%), according to the company. Sales for this
$20 million business have soared by 25% to 50% as a result of
the recall, even though its dog food costs nearly three times
as much as the average bag of supermarket petfood.
Packaged Facts also predicts much stronger interest in
products made from locally grown ingredients. Human-grade
organic petfood producer Evanger's, whose business has surged
as a result of the recall, buys all its ingredients locally,
most of them within 40 miles of its plant in Wheeling,
Illinois, USA. In an interview with the Chicago Tribune (May
28, 2007), company vice president Joel Sher said that buying
locally has taken on much greater importance since the recall.
"You've got to know your suppliers and the kind of people they
are. With the local ones, you can know as much as you want to
know. You can visit them."
Packaged Facts' expectations for "locally grown" as a potent
petfood sales proposition is not based solely on the recall.
Trends in the petfood market don't just follow human food
trends, they often do so at accelerated rates, and the trend
toward locally grown is in full swing on the human side.
In its May 2007 report Fresh and Local Foods in the US,
Packaged Facts conservatively estimates that locally grown food
could be a $7 billion business by 2011, up from its current
level of about $5 billion. This optimistic forecast is based on
trends including the rapid growth of farmers' markets, consumer
perceptions that locally grown products are tastier and
healthier, consumers' growing desire to support their local
economy and corporate support for sustainable agriculture.
Check out the Online Extra portion of this article