Part five of a series based on this question: Is petfood about marketing or nutrition?
Justin Case, marketing director of Feed Your Pet Inc. (FYP), has prepared a memo on strategic inputs to structured product development (SPD) for his boss, Joe Zweiful, chairman of the board. Joe is eager to discuss the memo.
Joe: Can we have a word? I have some queries about the strategy inputs you sent me.
Justin: If clarification is needed, let's do so now. There's no reason to procrastinate.
Joe: Shall we take them one by one? Why do you make a distinction between trends and markets?
Justin: Markets are defined by what exists already, whereas trends give the broader perspective. Knowing trends in human food consumption can tell us something about possible options for development in petfood. Take also the humanization of pets that we have heard about for probably 10 years already. If fresh continues to be the trend in human foods, why not have fresh petfood with, say, a seven-day shelf life? Instead of 18 months and still claim that the product is fresh because of this so-called innovative pack with umpteen barriers and I do not know what. The distribution of fresh, prepared human food has been brought to a state of excellence over the last four decades or so, and I do not see any reason why it shouldn't be used for fresh petfood. Humanization is a bit like, "What's good for me is good for my animal."
Joe: I can't argue with that. But what about the market information?
Justin: For something that doesn't yet exist, I think it's challenging to try and find market figures. But sometimes you must have the guts to act purely on the basis of a hunch. Strategy is not about avoiding risk. And don't forget that if figures would be available, our competitors would be looking at these as well and maybe draw the same conclusions as we do. I do not say that strategy can be designed without having data available, but these data do not necessarily have to relate to our industry. We can take human food developments as a source of inspiration.
Joe: Understood. And I agree that looking over the fences of our industry is useful and necessary.
Justin: Which brings me to another strategic point where product is concerned. I mean technology.
Joe: Yes, what about it?
Justin: Not being that long in our industry, I continue to be amazed that technologies for producing petfood have not seriously changed over the last probably five decades. I mean, no genuine breakthroughs. Maybe a bit on the packaging side with pouches, but on the whole, who can mention a genuine breakthrough in the last 10 years?
Joe: Maybe it's in the genes of our industry to stick with proven technologies, with things that we know work. But what do you have in mind? Invent a technology that is radically new for petfood?
Justin: Probably not invent, but it will be worth our while to seriously inventory and assess technologies that are common -- or at least used -- for human food production. I can't guarantee that we will find something useful, but all the same I plan to assign one of our younger and eager people to the task to find out.
Joe: Very good initiative. Which other strategic choices do you think are relevant as far as product is concerned and will have an influence in your SPD approach?
Justin: Well, there are two areas where genuine choices need to be made: ingredients and sustainability.
Joe: I understand ingredients, but isn't sustainability becoming a bit of a fashion, something that company managers can brag about to colleagues and friends? Rather than being relevant for the business as such. Some of its critics say it's an expensive hobby.
Justin: These critics walk around with blinkers. They are afraid to face reality. Sustainability can by definition not be a fashion. Fashion itself is not sustainable; it''s not even meant to be so. We're dealing with a changing world and changing sets of values and beliefs. People do become more concerned about the planet and about society as a whole. Ignoring this is ignoring the drive toward sustainability. Those who continue to ignore or only play lip-service to sustainability will eventually lose out. Of course, you can't transform our company from what we are today to being more sustainable overnight, but starting to pay more attention to the carbon footprint is already a welcome step in the right direction. Don't forget that sustainability is not about cost, it's about opportunity.
Joe: I see. You also mentioned ingredients as a subject for strategic choice. Enlighten me.
Justin: On the ingredient side, lots of things have happened during the last couple of years. So-called novel ingredients (the species may exist for a billion years already, but they are novel because they were not used in petfood before) are on the agenda at a lot of petfood companies, but when push comes to shove it looks as if the old, well-known and secure ingredients continue to be favored. I think that's a pity because there may be other valuable and useful material around that we can use. Maybe to more advantage of the people who grow or breed and fatten this material. That would be part of the overall sustainability picture I have in mind. I already asked our chief nutritionist to prepare a full list of possible ingredients with characteristics and benefits -- however crazy they seem to be -- to see if we can come up with something useful that fits our standards and requirements. And is available of course. She promised to have the list ready in about three months.
Joe: For me the picture is clear. You need a clear view on trends in the broader sense, not only markets. An alternative technology can give us an important competitive advantage. Sustainability must become part of our thinking and acting. Whereas we need to approach the ingredient issue from a much broader spectrum than we have done so far. You talk about very important steps and changes with quite some consequences for our company. Right?
Justin: Exactly. Let's get started and rock some boats. Shall we?
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