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The Pet Industry Goes Green

Pet Age
August, 2007

By Cathy Foster

At first blush, it might not seem like members of the pet industry have much in common with U2 frontman Bono, actress Alicia Silverstone or former vice president Al Gore.

But growing concern over earth-friendly issues - which go beyond "zero waste" and sustainability to encompass such things as fair trade and even human farming methods - isn't just the domain of celebrity humanitarians, movie stars who don't eat or wear animal products, and the politician whose name has become synonymous with "global warming."

"You know, its not just one thing, it's a combination of things," said Julie Paez, co-owner of The Big Bad Wolf, a 1,900-square-foot store in Washington that carries primarily dog and cat items. "We have healthy food and supplements, we buy local, we believe in supporting local economy, we support small and minority companies, and the products that we carry here are environmentally sound products.

...We had the humane society come in and talk about free-range eggs and what a battery cate looks like. So we branch out from just pet products in general to an entire way of living responsibly. And it's just all compeltely interconnected."

That pretty much mirrors the conclusion of Laurie Demeritt, president and chief operating officer for the Hartman Group, a consulting and market research firm headquartered in Bellevue, Wash. "Sustainability is not seen by consumers as simply 'saving the Earth.' It is a multi-demensional topic that encompasses the environment, the family, the community and even the economy of today's world," she said.

Going Green Is a Major Trend

The green wave of ecological awareness and sustainable living that's sweeping through the pet product industry can be seen not only in the marketed increase of eco-friendly pet products on the market, but also in the manufacturing and operational processes many companies are adopting. These include curtailing the amount of electricity used in manufacturing, changing hours of operation to conserve energy, installing compact fluorescent lights, making products from recycled materials that are in turn recyclable, drastically reducing packaging and more.

In some cases, being eco-minded dictates not only how companies do business, but also with whom they do business. For example, Shien-Ru Tsao, owner of From Scratch (Jersey City, N.J.), is seeing out printers who are dedicated to environmentally safe inks to print saying such as "Be Kind to Mother Earth," "Go Organic" and "Tree Hugger" on the 100 percent organic cotton doggie tees her small, fledgling company makes.

And The Honest Kitchen, a growing San Diego-based manufacturer of dehydrated raw diets, is negotiating with several new suppliers of certified organic, fair trade and sustainable ingredients for use in its products staring in 2008. "We are also actively seeking humanely raised meats - a cause very dear to our hearts," said Lucy Postins, director of marketing for the company, whose tag line is "Pet Food With Passion and Principles."

Choosing business partners based on their environmental track record may soon be the norm, if the influence of the biggest retailer of them all is any indication. Wal-Mart this year developed a "sustainable scorecard" for its suppliers to rank their progress in areas such as greenhouse gas emissions related to production, recycled content usage, product-to-packaging ratios and other environmental goals, according to Food USA Productiondaily.com. Starting in 2008, the giant retailer will use the rating system to determine its preferred suppliers - the higher a vendor's ranking, the more business it will do with Wal-Mart.

All of this is resonating with today's mainstream consumers, who are more socially aware and are making purchasing decisions that they believe can make a difference, according to the National Retail Federation (Washington) in "Seven Predictions for 2007." Prediction No. 4: Green is the new black.

Furthermore, an increasing number of consumers are striving for a way of life that is non-injurious to both animals and the environment, according to a Jan. 11, 2007, article in the New York Times. "Uncruel Beauty" explored the proliferation of vegan-friendly fashions - such as designer dresses made from biodegradable wood pulp fiber and belts made from canvas coated with tree sap - finding their way into trendy boutiques and online sites such as Pangea.

Such apparel appeals not only to environmentalists and dedicated vegans but also to "occasional vegetarians" that shop vegan selectively and whose "purchasing power is paramount," according to a 2006 survey by Mintel International, a consumer research company.

To ignore environmental issues, said Robert Burke, a New York fashion retail consultant interviewed for the Times article, "is not sexy today."

All of which makes "going green" one of the hottest retail trends of the year.

Pet Owners are Eco-Minded

The green trend has not been lost on pet owners. "Today's pet parents are typically well educated and environmentally conscious," said Shannon McWilliams, vice president of marketing for Petmate (Arlington, Texas). "They realize everyone needs to do their part to protect the environment and usually consider this at the point of sale."

The company recently unveiled a new eco-friendly label to denote products made with at least 25 percent recycled material. It expects all plastic products it manufactures at its Texas headquarters, including bowls, litter pans, shelters, kennels and similar plastic products that meet the criteria, to bear the new label by spring 2008.

"We've been using recycled materials in our manufacturing processes for years," said McWilliams. "We knew it was the smart thing to do. The recent rise in consumer awareness provoked the decision to tell our story to the public. While we don't anticipate a dramatic increase in sales from eco-friendly labeling, we do believe it enhances our brand and our value proposition."

Pet owners see a natural connection between the green trend and their "animals of the earth," according to Spencer Williams, president of West Paw Design (Bozeman, Mont.), which makes recyclable dog toys and pet beds filled with fiber made from post-consumer plastic bottles. "You see [the trend] moving that way with children's products and on to pet products."

The evidence lies in the growing number of eco-friendly items available to retailers. "It's been pretty easy to stay stocked," said Aditi Terpstra, owner of The Urbane Animal, an 800-square-foot store in Winona, Minn., which carries dog and cat products as well as a small percentage of items for small animals, reptiles and parrots.

Among the items she carries: Simply Fido organic toys from Planet H Inc. (Brooklyn, N.Y.); beds filled with fleece scraps from Big Shrimpy (Seattle); World's Best Cat Litter, a corn-based litter from GPC Pet Products (Muscatine, Iowa); and a line of pesticide-free hay and orchard grass from ZuPreem (Mission, Kan). She also manages to stock a few brands of natural foods, such as those from Eagle Pet Products Inc. (Mishawaka, Ind.), Nature's Variety (Lincoln, Neb.) and The Honest Kitchen - although she says sourcing eco-friendly foods has been more difficult because of the lack of distribution in her area.

"I'm noticing a trend where people come in and ask, 'What do you have that's natural or eco-friendly?'" said Terpstra. Consequently, she saw at least a 30 percent to 40 percent increase in sales of eco-friendly toys and foods in April and May 2007 versus 2006.

For Paez, selling eco-friendly products at The Big Bad Wolf is "like breathing. We just have those products out of choice, out of passion, and the rest just falls into place."

Paez and co-owner Pennye Jones-Napier, who opened The Big Bad Wolf a little over two years ago, specialize in providing organic, holistic and premium raw diets and are continually refining their inventory to reflect their mission of selling eco-friendly, green products, said Paez.

"Our tag line is 'Essentials for the Socially Conscious Pet.' People come in and we don't scream at them, 'Organic, green, environmentally clean product!' But they can pick up what we're about by a simple introduction to a lot of our products. And that's usually what they're looking for anyway." She added.

That approach seems to be working. The Big Bad Wolf has enjoyed steady growth of 5 percent to 10 percent in monthly sales since it opened, and the owners expect sales to reach $1.2 million this year. In fact the company has been so successful its is starting to franchise its business model in the Mid-Atlantic area.

Green Manufacturing Poses Challenges

Despite the buzz and excitement surrounding eco-friendly pet products and practices, manufacturers face some challenges that could show the growth of this segment.

• Lack of capital equipment. For some businesses, investing in capital equipment to convert recycled material into substances suitable for manufacturing is a challenge, said McWilliams of Petmate. In other cases, product performance limitations control the amount of recycled material that can be used.
• Constraints on alternative sources. Eco-friendly alternatives to plastic are not readily available and tend to be cost-prohibitive for most consumers at retail, said Angela Torrey, director of marketing communications for The Bramton Co. (Dallas.), which successfully developed substitute material for its biodegradable, compostable training pads by using a new corn-based blend technology.
  Similarly, sourcing sufficient volumes of some organic ingredients and materials can be difficult and/or costly, said manufacturers.
• Packaging limitations. The Honest Kitchen found it more work than expected to phase out its plastic buckets in favor of refill bags that take up less space, require less corrugated packaging material and eliminate the need for protective polystyrene peanuts. "There really aren't too many eco-sensitive packaging options in the [United States] that address our needs of keeping the food thoroughly fresh and protected from outside contaminants, whilst looking great and helping our products stand out from the crowd," said Postins.
  Because of that, she added, the company is turning to Europe, where the food packaging is "phenomenal," for some of its packaging solutions and has hired a local packaging and branding consultant to orchestrate the project.
• "Wait and see" attitudes. Because the eco-friendly category is still in its infancy, retailers are somewhat reluctant to support it, given what they deem will be limited demand, said Doug Daymond, president of KicX Nutrition Inc. (Guelph, Ontario). Maker of NuHemp Bio-Nesting and the Hemp Hideout for small animals as well as a comprehensive line of natural grooming products, the company also develops and markets private-labeled natural human health and wellness products.
• Cost. Another perceived disadvantage is the higher price the products typically command. "While the consumer and/or retailer may verbalize their understanding and support of green products, having them open their wallet and purchase is another," said Daymond.

None of this deters Paez. No one complained about the price with the retailer brought biodegradable puppy training pads to replace the traditionally made ones she had been carrying. "I can't be all things to all people, and you have to sand behind what you believe in, what your mission is."

Our Future is Green

It's only a matter of time before eco-friendly pet products are commonplace, says manufacturers. "Given the increasing pressures and demands for all consumers and retailers to be more environmentally conscious, we believe firmly it will be mainstream within three years," said Daymond, who decided to diversify into the small-animal and equine categories two years ago after research convinced him of the "tremendous opportunity" the pet market represented. "This will result from many influences: our children being educated at school, increased media attention on the issue, government incentives and legislation, green groups."

Some pet retailers may be skeptical, but time will prove that the demand is great, said Bramton's Torrey. "Environmentally friendly products are not a trend; they are here to stay," she added.

The appeal of such products is already broadening to include not only customers concerned with the environment, but also to those concerned with style, according to West Paw's Spencer. "A customer who might not have a lot of money but believes passionately in buying eco-friendly products will still buy that product, as well as people who have more discretionary income and are attracted to the design and quality. I see them crossing over," he said.

"This whole movement is really just the beginning of something great to come," said Tsao of From Scratch. "I don't think it matters if you as an individual have been conscious of the environment for years or if you're just a novice. ...The fact is, pet companies are stepping up to the plate and taking an initiative on creating great products that educate and help us conserve the environment and our future. That's what really matters."