I. Executive Summary

The Products
• Balanced Nutrition for Dogs and Cats
• Four Product Forms
• Lifestage, Activity Level, or Special Dietary Formulations
• Products Formulated with Better-Quality Ingredients
• Premium, Specialty, and Super-Premium
• Federal Government Sets Four General Guidelines
• Four Product Nomenclature Rules
• Nutritional Adequacy Statements

The Market
• 1998 Sales at $9.5 Billion
• Dog Food at $5.6 Billion
• Cat Food at $3.9 Billion
• Table 1-1: U.S. Retail Sales of Pet Food by Product Category: Dog Food vs. Cat Food, 1994-2003 (dollars) Exports at $745 Million
• Pet Population Jumps to 126 Million
• Reasons for the Rise in Petdom
• Market to Approach $11.6 Billion by 2003

The Marketers
• The Overall Landscape
• Figure 1-1: Top Marketer Shares of U.S. Pet Food Market, 1998 (percent): 5 Marketers, All Others
• Mass vs. Class
• Consolidation on Macro and Micro Scales
• More to Come?
• Reasons for the Rise in Petdom
• Consumer Ad Spending on Upswing
• Leading Mass-Market Advertisers Hold Sway

Distribution and Retail
• Mass Distribution vs. Limited Distribution
• Changing Patterns of Distribution
• Food Stores Remain Leading Outlet
• Mass Merchandisers Continue to Increase Share
• Fastest Growth in Specialty Channel
• Supermarkets in Midstream of Margins
• Private Labels Continue Growth

The Consumer
• 35% of U.S. Adults Purchase Dry Dog Food
• Southerners Are Prime Purchasers of Canned Dog Food
• 26% Purchase Dry Cat Food
• Women Comprise 55% of Canned Cat Food Purchasers

Scope and Methodology
• Market Parameters
• Report Methodology

II. The Products

Scope and Background of Market
• Two Product Categories: Dog and Cat Food
• Four Product Forms, Eight Segments
• The Retail Market
• A Brief History of Commercial Pet Food

The Ingredients
• Balanced Nutrition for Dogs and Cats
• Protein from Animal Sources
• Protein from Plant Sources
• Carbohydrates
• Fat
• Digests
• Additives and Feline Urinary Syndrome (FUS)
• Additives and Controversy

Product Forms
• Dry Food
• Variety of Shapes and Flavors
• Advantages and Disadvantages of Dry Food
• Canned Food
• Variety of Flavors and Textures
• Advantages and Disadvantages of Canned Food
• Semi-Moist Food
• Variety of Shapes, Textures, and Flavors
• Advantages and Disadvantages of Semi-Moist Food
• Snacks: Usually Dry or Semi-Moist
• Variety of Shapes and Sizes
• Advantages and Disadvantages of Snacks

Product Types
• Product Types Formulated for Lifestage, Activity Level, and Special Dietary Needs
• Product Formulated with Better-Quality Ingredients
• Table 2-1: Examples of Better-Quality Product Type Attributes
• Better-Quality Product Types: Natural, High-Nutrition, Gourmet
• Marketing Classification of Upscale Product Types: Premium, Specialty, and Super-Premium

Packaging and Sizing
• Dry Dog Food: Sacks
• Canned Dog Food: Various Sizes
• Semi-Moist Dog Food: Boxes
• Dog Snacks: Various
• Dry Cat Food: Boxes, Sacks, and Jugs
• Canned Cat Food: 5.5-Ounce Size Dominates
• Semi-Moist Cat Food: Stay-Fresh Pouches
• Cat Snacks: Various

Regulation and Labeling
• Federal Government Sets Four General Guidelines
• State Governments Set Specific Guidelines
• Four Product Nomenclature Rules
• Nutritional Adequacy Statements
• Nutritional Claims and Product "Families"
• Nutritional Adequacy and Lifestage Claims
• Feeding Directions
• Calorie Statement
• Guaranteed Analysis
• Nutrient Analysis: Canned vs. Dry
• Cans and Moisture Content: Label Exceptions
• Snacks: Labeling Exceptions

III. The Market
Figure 3-1: U.S. Retail Sales of Pet Food, 1994-1998 (dollars)

Market Size and Growth
• 1998 Sales at $9.5 Billion
• Dog Food at $5.6 Billion
• Cat Food at $3.8 Billion
• Table 3-1: U.S. Retail Sales of Pet Food by Category: Dog Food vs. Cat Food, 1994-1998 (dollars)
• Food vs. Nonfood Stores: Pet Food Growth in the Nonfood Sector
• Table 3-2: U.S. Retail Sales of Pet Food by Sector: Food vs. Nonfood Outlets, 1994-1998 (dollars)
• Unit Volume at 13.5 Billion Pounds
• The Pound/Dollar Dynamic in Supermarkets
• Supermarket Sales by Product Category/Segment
• Table 3-3: U.S. Supermarket Sales of Pet Food by Product Category and Segment, 1996 vs. 1998 (dollars): 2 Categories, 4 Segments

Market Composition
• Dog Food Claims 59% of Dollar Sales
• Figure 3-2: Share of U.S. Pet Food Sales by Product Category: Dog Food vs. Cat Food, 1998 (percent)
• Dog Food Claims 75% of Pound Volume
• Figure 3-3: Share of U.S. Pet Food Volume by Product Category: Dog Food vs. Cat Food, 1998 (percent)
• Dry Holds 60% Share of Dog Food Sales
• Figure 3-4: Share of U.S. Supermarket Dog Food Sales by Product Segment, 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Dog Food Pound Volume by Segment
• Figure 3-5: Share of U.S. Supermarket Dog Food Volume by Product Segment, 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Cans Claim 53% Share of Cat Food Sales
• Figure 3-6: Share of U.S. Supermarket Cat Food Dollar Sales by Product Segment, 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Cat Food Pound Volume by Segment
• Figure 3-7: Share of U.S. Supermarket Cat Food Volume by Product Segment, 1998 (percent): Dry, Canned, Snacks/Semi-Moist
• Long-Term Trend: Dog Food by Segment
• Table 3-4: Share of U.S. Supermarket Dog Food Sales by Product Segment, 1982 vs. 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Long-Term Trend: Cat Food by Segment
• Table 3-5: Share of U.S. Supermarket Cat Food Sales by Product Segment, 1982 vs. 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Top-Tier Products Garner 25% of Market
• The Waning Share of Food Stores
• Table 3-6: Share of U.S. Pet Food Sales by Retail Sector: Food vs. Nonfood Outlets, 1988-1998 (percent)
• Slicing the Retail Market
• Table 3-7: Share of U.S. Pet Food Sales by Retail Sector, 1998 (percent): 5 Outlet Types
• Private Labels: Supermarkets vs. Mass Merchandisers
• Table 3-8: Private-Label Share of U.S. Pet Food Sales by Product Segment: Supermarkets vs. Mass Merchandisers, 1998 (percent): Dry, Canned, Snacks, Semi-Moist
• Seasonality of Sales

The Export Market
• Exports at $745 Million
• U.S. Leading Global Pet Food Exporter
• Major Trading Partners
• Table 3-9: Top 10 Country Markets for U.S. Dog and Cat Food Exports, 1997 (dollars and percent): 10 Export Markets
• U.S. Export Consumption by Region
• Table 3-10: Top 10 Regional Markets for U.S. Dog and Cat Food Exports, 1997 (dollars and percent): 10 Export Markets
• Asia/Pacific Most Promising Export Market
• Primary Export Competitors: Australia and Thailand
• Common Export Difficulties
• Packaging/Labeling Problems
• Successful Exporting Requires Education

Factors to Market Growth
• Pet Population Jumps to 126 Million
• Reasons for the Rise in Petdom
• The Role of Nutritional Awareness
• Cats Outflank Dogs in Pet Mix
• The Case for Big and Purebred Dogs
• Industry Consolidation
• Government Subsidies and Commodity Prices
• Figure 3-8: Projected U.S. Retail Sales of Pet Food, 1998-2003 (dollars)

Projected Market Growth
• Market to Approach $11.6 Billion in 2003
• Table 3-11: Projected U.S. Retail Sales of Pet Food by Category: Dog Food vs. Cat Food, 1998-2003 (dollars)

IV. The Markerters

Marketer Overview
• Number and Types of Marketers
• Diversified Brand Marketers
• Strengths and Weaknesses
• Focused Branded Specialty Marketers
• Strengths and Weaknesses
• Regionals and Private Labels
• Strengths and Weaknesses
• Private-Label Manufacturers
• Table 4-1a: Major U.S. Pet Food Marketers and Their Brands: By Product Category and Segment (11 Marketers)
• Table 4-1b: Selected Secondary and Niche U.S. Pet Food Marketers and Their Brands: By Product Category and Segment (32 Marketers)

Marketer and Brand Shares
• The Overall Landscape
• Table 4-2: Top Marketer Shares of U.S. Pet Food Market, 1998 (percent): 10 Marketers, All Others
• Mass vs. Class
• The Mass-Marketer Arena
• Ralston Remains on Top
• Table 4-3: Top U.S. Pet Food Marketers by Share of Mass-Market Sales, 1998 (percent): 4 Marketers, All Others
• Nestlé Solid #2, But Falling Behind Ralston
• Heinz and Mars Still Jostling for Third and Fourth Positions
• Ralston as Top Dog
• Table 4-4: Top U.S. Dog Food Marketers by Share of Mass-Market Sales, 1998 (percent): 5 Marketers, All Others
• Major Ralston Dog Food Brands
• Mars Climbs to Second Place
• Major Mars Dog Food Brands
• Heinz Drops But Is Secure Third Place
• Major Heinz Dog Food Brands
• Nestlé Holds Fourth Place
• Major Nestlé Dog Food Brands
• Nabisco Continues to Fade
• Table 4-5: Top U.S. Dog Food Marketers: Mass-Market Share by Product Segment, 1998 (percent): 5 Marketers, All Others
• Nestlé Remains Top Cat
• Table 4-6: Top U.S. Cat Food Marketers by Share of Mass-Market Sales, 1998 (percent): 4 Marketers, All Others
• Major Nestlé Cat Food Brands
• Ralston an Easy Number Two
• Major Ralston Cat Food Brands
• Heinz a Solid Third
• Mars in Fourth Spot
• Table 4-7: Top U.S. Cat Food Marketers: Mass-Market Share by Product Segment, 1998 (percent): 4 Marketers, All Others

The Competitive Situation
• The Re-Established Mass-Marketer Sector
• Ralston Vulnerable But Not Yet Threatened
• Nestlé Holds Down Second Spot
• Heinz Uses Balanced Portfolio and Private Label to Bolster Share
• Mars as Domestic Player
• The Mass-Market Loser: Nabisco
• The Specialty Winners: Hill's and Iams
• Value Sector Winner: Doane

Competitive Trends
• Consolidation on Macro and Micro Scales
• More to Come?
• Acquisition Makes Sense
• Retail Shift Shaking Up Mass Marketers
• Specialty Marketers Also Under Pressure
• The Mixed Record on Super-Premiums
• The Opposite Fates of Therapeutic and Natural Mass Brands
• Light Foods Not Big Hits

Competitive Profile: Ralston Purina Co
• Ralston Maintains Market Lead
• Ralston's Pet Food Line-Up
• Brief Company History
• Ralston Streamlines and Refocuses
• Strong 1998 for Pet Products
• Formidable Strengths and Sitting Pat
• Ralston Holds, But Competitors Close the Gap
• Clouds on the Horizon?
• Ralston's Defensive Strategy: Product Upgrading
• Ralston Allies with Heska to Develop Therapeutic Food
• New Product Introductions in the 1990s
• Playing the Private-Label Card
• Courting the Specialty Sector
• Cultivating the Vets
• Ralston Allies with Vet Pet Insurance

Competitive Profile: Nestlé U.S.A. (Nestlé S.A.)
• Nestlé Holds Number-Two Spot in Pet Food Salest
• A Colossus in the World Food Market
• A Marriage Made in Pet Food Heaven
• Mixing Cat and Dog Corporate Cultures
• Nestlé Increases Presence in European Pet
• Advertising Blitz to Boost Supermarket Sales Food Market
• Major Brands

Competitive Profile: H.J. Heinz Co
• H.J. Heinz Holds #3 Position
• Sales Slow after Surge from Quaker Acquisition
• Company Overview
• Heinz's Expansion Overseas
• Global Market Still Up for Grabs
• Emphasizing Specialty Pet Foods
• Morris Returns to Center-Stage
• Nature's Recipe

Competitive Profile: Kal Kan Foods, Inc. (Mars, Inc.)
• Kal Kan Is #4 Nationally
• Kal Kan Goes to the Dogs
• Feline Trade No Longer the Cat's Meow
• Mars Remains #1 Globally
• Kal Kan as King of the Mountain
• Big, Private

Competitive Profile: RJR Nabisco
• An Embattled Dog Snack Leader
• Nabisco Stands by Milk-Bone in the 1990s
• A Turn-Around?

Competitive Profile: Iams Co.
• Number-Two Specialty Marketer Is Legitimate Challenger
• Iams Revolutionizes Dry Pet Food
• Two Major Brands that Focus on Dogs and Cats Exclusively
• The 1990s—A Decade of Product Expansion and Innovation
• Dedicated to Reinvestment and Education

Competitive Profile: Doane Pet Care Enterprises, Inc
• Doane Products + Windy Hill
• Doane Enterprises: Top Private-Label Pet Food Producer
• Doane Rejects Ralston, Sells to DPC Acquisition Corp.
• Wal-Mart's Leading Supplier
• Doane's Growing Production Capacity
• Windy Hill Pet Food: Created through Acquisition
• A New Major Player in the Retail Market?

Competitive Briefs
• Best Feeds
• Natura Pet Products
• Nutro Products, Inc.
• Sunshine Mills, Inc

New Product Trends
• Overview: Major Trends Related to Product Upgrading
• New/Improved Reformulations
• Rice and Low-Allergenic Meats
• Seafood/Salmon
• Senior Lifestage Extensions
• New Lifestages: Large Breeds and Lactating Mothers
• New Textures
• New Packaging Approaches
• New Niches: Pasta and Sauce
• Healthy Snacks
• Pet Beverages
• Table 4-8: U.S. Pet Food Market: Selected Product Introductions, 1996-1998

Consumer Advertising and Promotion
• Consumer Ad Spending on Upswing
• Leading Mass-Market Advertisers Hold Sway
• Ralston Purina Leads in Adspends at $80 Million Plus
• Two Primary Ad Positionings: Nutrition and Taste
• Banking on Better Nutrition
• Lifestage Positioning
• Head-to-Head Mass vs. Class
• Tempting with Taste
• Spokespersons and Spokescharacters
• Coupons and Price Promotions
• Gifts and Games
• Examples of Consumer Advertising and Promotion

Trade Advertising and Promotion
• Venues and Formats
• Promotions Are Standard
• Co-Op Offers
• Trade Shows Are Vital

V. Distribution and Retail

At the Distribution Level
• Mass Distribution vs. Limited Distribution
• Changing Patterns of Distribution
• Three Main Distributor Strategies
• Independent Distributors Vulnerable and Scrambling
• Survival Strategies for Independent Distributors

At the Retail Level
• Food Stores Remain Leading Outlet
• Mass Merchandisers Continue to Increase Share
• Fastest Growth in Specialty Channel
• Table 5-1: Share of U.S. Pet Food Sales by Retailer Type, 1998 (percent): 7 Outlet Types
• Supermarkets in Midstream of Margins

Retail Focus: Supermarkets
• Bleeding Slows, But Supermarkets Continue to Lose Share
• The Best of Times, the Worst of Times
• Causes for Supermarket Decline
• Limited Distribution Undermines Supermarkets
• Cultural Shift in Shopping Favors Other Mass Outlets
• Three Strategies to Reverse the Decline
• Case Study: Total Pet Care
• Case Study: Kroger Goes Local, Teams Up with Vets
• Are Supermarkets Paddling Upstream?
• Using a Bigger Paddle

Retail Focus: Pet Superstores
• A New Category
• Fragmented Markets "Invite-in" Category Killers
• Superstores Combine Low Cost, Convenience, and Ambiance
• Pet Food Remains the Retail Engine
• Emphasis on High-Margin Specialty Foods
• Pets Stores Sans Puppies
• Will the Record Growth Rates Continue?
• Reading the Cards as They Lay

Retail Focus: Pet Stores
• Traditional Pet Stores by the Numbers
• Pet Stores vs. Pet Superstores: David vs. Goliath?
• Pet Stores Must Play to Natural Strengths: Pets and Service
• Improving Pet Store Merchandising and Visual Appeal
• Going Beyond Mere Service
• Establishing a Niche
• How Merchandising Can Help
• Private Labels: A Major Survival Strategy
• High Startup Costs and Minimum Purchases Less a Factor
• Attitude Is Key
• Four Reasons Why Private Labeling Benefits Small Pet Stores

The Private-Label Trend
• Private Labels Continue Growth
• Table 5-2: Supermarket Sales of Private-Label Pet Food by Segment, 1998 (dollars and percent): 8 Segments
• Upscaling Private Labels
• Supermarket Upscale Private Labels
• Wal-Mart's Ol' Roy
• PETsMART's Authority and Petco's Pet Gold
• Private Labels for Independent Pet Stores

VI. The Consumer

Purchaser Overview
• Note on Simmons Market Research Bureau Data
• Few Defining Patterns
• Dog vs. Cat Food Purchasers
• Factors with Limited Significance

Dog Food and Snacks
• 35% Purchase Dry Dog Food
• Southerners Are Prime Purchasers of Canned Dog Food
• Genders Evenly Split Among Semi-Moist Product Purchasers
• 56 Million Purchasers of Dog Snacks
• Table 6-1a: Demographic Characteristics Favoring Use of Dry Dog Food, 1998 (U.S. Adults)
• Table 6-1b: Demographic Characteristics Favoring Use of Dry Dog Food by Brand, 1998 (U.S. Adults): Purina, Alpo, Heinz
• Table 6-1c: Demographic Characteristics Favoring Use of Dry Dog Food by Brand, 1998 (U.S. Adults): Kal Kan, Store Brands, Other Brands
• Table 6-2a: Demographic Characteristics Favoring Use of Canned Dog Food, 1998 (U.S. Adults)
• Table 6-2b: Demographic Characteristics Favoring Use of Canned Dog Food by Brand, 1998 (U.S. Adults): Kal Kan, Alpo, Cycle
• Table 6-2c: Demographic Characteristics Favoring Use of Canned Dog Food by Brand: Store Brands vs. Other Brands, 1998 (U.S. Adults)
• Table 6-3a: Demographic Characteristics Favoring Use of Semi-Moist Dog Food, 1998 (U.S. Adults)
• Table 6-3b: Demographic Characteristics Favoring Use of Semi-Moist Dog Food by Brand, 1998 (U.S. Adults): Purina, Gaines Burgers, Store Brands
• Table 6-4a: Demographic Characteristics Favoring Use of Dog Snacks, 1998 (U.S. Adults)
• Table 6-4b: Demographic Characteristics Favoring Use of Dog Snacks by Brand, 1998 (U.S. Adults): Pup-Peroni, Jerky Snacks, Snausages
• Table 6-4c: Demographic Characteristics Favoring Use of Dog Snacks by Brand, 1998 (U.S. Adults): Milk-Bone, Alpo, Purina
• Table 6-4d: Demographic Characteristics Favoring Use of Dog Snacks by Brand: Store Brands vs. Other Brands, 1998 (U.S. Adults)

Cat Food and Snacks
• 26% Purchase Dry Cat Food
• Women Comprise 55% of Canned Cat Food Purchasers
• Downscale Skew to Semi-Moist Cat Food Fans
• Over 20 Million Buy Cat Snacks
• Table 6-5a: Demographic Characteristics Favoring Use of Dry Cat Food, 1998 (U.S. Adults)
• Table 6-5b: Demographic Characteristics Favoring Use of Dry Cat Food by Brand, 1998 (U.S. Adults): Purina, Friskies, Other Brands
• Table 6-6a: Demographic Characteristics Favoring Use of Canned Cat Food, 1998 (U.S. Adults)
• Table 6-6b: Demographic Characteristics Favoring Use of Canned Cat Food by Brand: Friskies vs. 9 Lives, 1998 (U.S. Adults)
• Table 6-6c: Demographic Characteristics Favoring Use of Canned Cat Food by Brand: Whiskas vs. Other Brands, 1998 (U.S. Adults)
• Table 6-7a: Demographic Characteristics Favoring Use of Semi-Moist Cat Food, 1998 (U.S. Adults)
• Table 6-7b: Demographic Characteristics Favoring Use of Semi-Moist Cat Food by Brand, 1998 (U.S. Adults): Tender Vittles, 9 Lives, Other Brands
• Table 6-8a: Demographic Characteristics Favoring Use of Cat Snacks, 1998 (U.S. Adults)
• Table 6-8b: Demographic Characteristics Favoring Use of Cat Snacks by Brand, 1998 (U.S. Adults): Pounce, Whisker Lickin's, Other Brands

Appendix I: Examples of Consumer Advertising And Promotions

Appendix II: Addresses of Selected Marketers