Pet owner looking for natural dog food that is safe and nutritious...a dog food or puppy food with only good stuff...searching for the safest holistic dog food...is that you? You will want to check out this headline on Hill's Science Diet just uncovered.
The Wallstreet Journal, Tuesday, February 5, 2013 -- Pet Food Brand's Image Bites Back Colgate Palmolive has a problem when it comes to pet food - its Science Diet brand doesn't appeal to pet owners the way it once did.
While Colgate is best known for toothpastes and soap, roughly one out of every $7 in sales and profit comes from the Hill's pet-food division, or roughly 13% of the consumer-product company's $17 billion in annual sales.
But for the past few years, pet food has been the dog of the portfolio—in part because of its name and ingredients.
The Hill's main brand, Science Diet, which is sold only through specialty stores, justified its boutique prices by using research to back up claims that its concoctions of proteins, carbohydrates, vitamins and other ingredients derived from corn, grains and meat products were particularly good for pets. A veterinarian says consumers are more aware of pet food labels.
Science Diet has found itself on the wrong side of a shift in consumer taste. Americans increasingly are choosing dog and cat foods with ingredients and flavors that mimic their own meals. The image of lab-engineered nutrition like Hill's has become a liability in an age where the new mark of quality is organic or natural, and the brand has lost market share.
When Brian Saunders, a 28-year-old electrician in Tenafly, N.J., got a puppy four years ago, he researched pet foods online before choosing a brand whose main ingredients include real meat and nutrient rich fruits and vegetables.
"I wanted to make the best choice for Tyson," he said, referring to his 55-pound brindle pitbull. Mr. Saunders spends roughly $30 a month on dog food. "If I can't eat the ingredients, I won't feed them to my dog," he says, referring to animal byproducts and plant fillers in many commercial dog foods.
Hill's tried to respond with foods like Science Diet Nature's Best, whose ingredients included lamb, brewers rice, soybean meal and apples. But "the consumer had a disconnect with this idea of Science Diet and a naturals product," Ian Cook, Colgate's chief executive, told investors last year.
"People now think of Science Diet as something artificial and not natural," says Javier Escalante, an analyst with Consumer Edge Research in Stamford, Conn.
Hill's was founded in 1948 and acquired by Colgate in 1976. The company expanded the brand to over 95 countries. The division became a source of consistent growth and a star performer in Colgate's portfolio. It also makes food under a Prescription Diet brand that veterinarians recommend for certain ailments.
Hill's has lost share to smaller makers of pet foods containing high-quality meats, vegetables, whole grains and fruits as their main ingredients. Companies are persuading pet owners to read ingredient labels and avoid foods containing corn, meat by-products and preservatives.
Colgate currently has no plans to divest Hill's, but it is making changes. Hill's will soon launch a line of pet food without the Science Diet name. Hill's Ideal Balance will be its first new brand product since 1968 is scheduled to hit store shelves in March. The foods will contain ingredients like chicken, salmon, fruits and vegetables, and no corn, wheat or soy.
Carla Case-McCorvey, a veterinarian in Savannah, Ga., says consumers are becoming more conscious about pet food labels but "just because the first ingredient is meat doesn't mean it's human-grade food or better for a pet's diet." She said foods that are good for pets should have ingredients and nutrients that are easily digested and absorbed.
The pet food industry has been a rare bright spot amid the sluggish economy, growing even through the downturn as consumers scrimped on many household staples but kept spending on their pets. Sales of pet food topped $18 billion in 2011 in the U.S., up 15% from 2006, according to market research firm Mintel Group, which expects pet food sales to hit $21.2 billion by 2016.
Hill's however, could have a hard time tapping back into that growth. Many pet owners are loath to switch pet food brands once they find a formula they like for fear of disrupting their pets' digestive systems. "They are fighting 20 years of entrenched marketing of themselves as science-y, and it will cost a lot of money to fix and rebrand the business," said Ali Dibadj, an analyst at Bernstein Research.
