The Right Treat Strategy Can Deliver Big Returns for Retailers

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Pet Age recently spoke with Rick Ruffolo, CEO and president of Phelps Pet Products, to explore his unique perspective on the dog treats market as he works closely with category managers, buyers and marketing teams to develop innovative products and programs for the top brands and retailers across every channel of distribution. Ruffalo shared some insights and tips for pet retailers and brands to succeed in the highly competitive dog treats market.

What are currently the key trends in the dog treat category?

The key trends driving growth in the dog treat category continue to be built on the underlying behavior of “humanization” that has been the dominant influence over the past decade. These more recent trends raise the bar further on product expectations, whether it be an emphasis on clean label recipes, functional ingredients or more sustainable practices such as upcycled materials and recycled packaging content. It also is notable that the single biggest consumer trend driving human food growth the last few years now has made its way into dog treats, and that is the option of 100 percent plant-based “meat-less” jerky dog treats. Much like the Impossible Burger or Beyond Meat in human food, the new 100 percent plant-based recipes combine great taste with the health and sustainable environmental benefits of meat-less options.

Why are functional ingredients a valuable aspect for pet treats?

Dogs now are living two times longer than they did in the 80’s due to changes in diet, exercise and veterinary care. The concept of “wellness” in pet care is all about extending the quality of life for your dog(s). We have integrated glucosamine and chondroitin into tasty jerky dog treats, so dog owners don’t have to try to get their pup to take a supplement pill. We created a more appealing way to provide your dogs with a daily “dose” of ingredients designed to assist them with hip and joint issues as they age. Other highly-sought-after functional benefits include treats to assist with skin and coat, digestive and attention issues featuring approved ingredients such as pre- and pro-biotics, gingko biloba and chamomile, among others. Although we have had people ask us to use CBD for these products we intentionally have focused only on proven, approved ingredients in all our recipes. We have opted to avoid using CBD until more longitudinal data is available, consistent regulations are adopted and the appropriate federal and state regulatory bodies have approved it. However, there is no dispute that the interest in these potential functional benefits is clear. In fact, an interesting observation we have seen in our Phelps Wellness Collection is the No. 1 preferred wellness benefit is “Keep Calm,” which is intended to help soothe nervous dogs on a daily basis or can be used to help with moments of high stress such as thunderstorms, travel, new environments, boarding, grooming or vet visits. It certainly makes sense to me, and with the recent emphasis on the importance of mental health being yet another parallel between humans and dogs, including functional treats in your assortment is a must have at this point.

What are the important parts of a product label that consumers should be examining?

Label reading is critical for both human food and pet products. After all, we “are what we eat,” and science continues to shed new insight into this age-old adage. Fortunately, more consumers are looking at the product label to make sure they know the product ingredients, where it is made and other key product claims. Brands are required to detail all ingredients on the package in order of most-to-least, as well as the “guaranteed analysis” which provides other important product health insights. If you cannot pronounce the ingredients, if the ingredient list is too long for you or if there are certain ingredients you are trying to avoid – you can become informed simply by reading the back panel. Another key to know is “country of origin” with “made in the U.S.A.” being the single biggest preference among not only U.S. consumers, but consumers from many other countries around the world. Consumers look to the FDA and the USDA standards and practices as ways to ensure they are buying safe, quality foods. Finally, most companies put a lot of thought into the claims they make on their packaging, and many times these claims are important to their customers such as USDA certified organic, made with upcycled ingredients or gluten free.

Why is it important for retailers to offer a wide variety of treats?

As a former retail executive for many years – I have found that consumers usually are “shopping for solutions” – and solutions involve a combination of attributes including product availability, convenience, value and confidence. To compete with the booming e-commerce channel, which has been spurred on by the pandemic restrictions over the last 18 months, it’s critical for retail stores to always have consistent in-stock availability of a clear and compelling assortment of products. The last thing you want is to disappoint your shoppers by not having the product they want. Of course, since it is impossible to have every item in the category, I often recommend taking a strategic approach to assortment planning by outlining key category needs, and then ensuring each product you choose has a “reason for being.” In other words, does it meet a key category need, or not?  While brands are very important to any assortment – it is equally, or perhaps, more important, to ensure you have the product types consumers want. At minimum, retailers need to have a dog treat assortment that features: protein diversity (e.g. not simply chicken, turkey, & beef treats); “healthier/clean-label” options such as recipes that are USDA certified organic or made with “super food” ingredients;  100 percent plant-based (meatless) treats;  “functional” treats such as for calming, hip and joint, etc.; and something unexpected/new like Christmas seasonal offerings, a licensed line that ties to a cross-category marketing story (e.g. the new Buzz Lightyear movie in 2022) or a novel new ingredient story (e.g. insect-based protein jerky).

How can retailers exceed their customers’ expectations during their shopping experience?

This is a great question. Studies over the last several decades continuously show that no one exceeds customer expectations better than Disney, so it is only natural to look to the Disney model of customer service for insight. I have had the privilege of working alongside talented and engaging Disney employees, also known as cast members, on three different occasions in my career including our exciting new Disney Table Scraps dog treats collaboration. There are numerous books, training sessions, institutes and other ways that have been developed to share the Disney secrets of achieving unbeatable customer service. Why? Because it matters. Each cast member clearly understands that the “Disney magic begins with you” and the phrase “Be Our Guest” takes on incredible meaning and purpose for all Disney cast members. We all know that exceeding customer expectations is not achieved simply through nifty corporate slogans, icons or name badges. It comes from a commitment by each staff member to listen, learn and focus on how they can help solve, and anticipate, customer issues. Similar to how every detail of the Disney guest experience is researched (something they call “guestology”), literally every consumer “touchpoint” matters – from your store location, website, store cleanliness, product return policy, product assortment, store layout, in-stock levels and even how the store is lit and how it smells. Yes, having spent a good portion of my career as head of innovation at both Bath & Body Works and Yankee Candle – I can assure you that the first thing your shoppers instinctively will sense walking into your store is the way it smells. The point is: first impressions matter, they last, and they are key to repeat visits. Therefore, you should think like your shoppers, anticipate their needs, and focus on exceeding their expectations.