Earth Animal will launch a partnership with Petco on July 1 to sell its popular line of No-Hide chews. Chicken, beef, salmon and venison will be available at Petco stores, with those flavors plus peanut butter and pork available on petco.com. Petco stores will carry both bagged and bulk chews, with only bagged available on its website.
Since late May, the company has been reaching out to independent pet retailers who sell its products, by phone in some cases and also via a letter from Chief Customer Officer Chris Moore. It outlines nine actions/initiatives he says will continue to support indies as the big-box store begins carrying No-Hides:
Dear Valued Partner,
In the coming weeks, we will be announcing a new partnership with Petco. The partnership will launch this summer when No-Hide® products will be sold in stores and on Petco.com. Although this news has not been publicly announced, in accordance with our ongoing promises, we are communicating with you in advance.
Historically, channel expansion for IPS-captive brands has been problematic. Each of us has seen firsthand the mistakes that brands have made in the past, with what seems like a mindless disregard for existing partnerships. We have thoughtfully and actively been approaching our expansion “another way,” with the objective that growth, in the end, will work for all.
Specifically, we have been working hard with key retail partners and other like-minded brands to help co-author some tactics around what healthy, meaningful channel integrity means, in practice. As a result, there are nine actions/initiatives we have successfully implemented to support you:
— Be transparent
— Have a consistent, rolling five-year plan discussion with you. Why we believe certain products should remain IPS exclusive
— Provide dedicated trade funding, marketing support, and merchandising/in-store-displays options (Regional Sales Manager contacts/map)
— Fix our supply issues. We will not expand at the expense of you, our existing customers.
— Have a clear MAP/iMAP/MSRP guideline with a commitment to and investment in monitoring, compliance, and accountability
— Have a commitment for training and education to help you with brand and product knowledge expertise
— Have a Product Information System (PIM) to allow you to have the same access to product information and digital assets as all our channel partners
— Help define sustainability best practices and why that matters to all of us
— Work with Indiepet.org (Independent Pet Industry Trade Association) to connect with your peers and be part of the best practices conversation
In preparation for Independent Retailer Month (IRM) in July, we are sponsoring a first-year membership to Indiepet for any and all of those who are interested to help strengthen IPS competitiveness in the pet space. This offer will take place the whole month of June.
In additional support of IRM, we are activating a campaign for you around collaboration, education and sustainability. Stay tuned for more details.
Lastly, we could not have grown as a brand without the incredible support we have experienced over the last many years from you and others in the IPS community.
On behalf of all of us at Earth Animal, thank you very much for your continued trust.
Sincerely,
Chris Moore
Chief Customer Officer
When retailers in the PETS+ Facebook community began hearing that No-Hides would soon be available via Petco, they reacted with concern about current and future availability. Many said the product has been difficult to get during the pandemic. In response, Moore shared with PETS+ an update about No-Hide manufacturing and distribution.
“It’s a story around both capacity and efficiencies,” he said. “Firstly around capacity, we created a new 32,000-square-foot, SQF-9-certified facility for our No-Hide Chews in Pennsylvania. This has given us the bandwidth to meet projected demand for the foreseeable future. As one example of improved efficiency, we have established a product packaging and distribution center in Belgium that will support all of our European trade partners (with the exception of the UK, which will still ship direct). That will take enormous complexity out of the process, and free up ongoing capacity as well. We will now ship multiple large containers to one destination, and from there package and send smaller loads to multiple European locations!”
Moore continued, “As a result of this, we are sitting on three months of forecast demand. For perspective, we were not able to ship demand over the last two years so inventory was not measured in months or even weeks for us. This represents a huge milestone for us in our ability to meet customer demand with confidence. Recall, when we talked with our trade customers, they largely understood our position but unanimously argued if we expanded and left current customer orders unfulfilled, it would not be acceptable. We listened, and we understand completely.”
Jennifer Lloyd Flanagan of Nature’s Pet Market Sherwood and Nature’s Pet Market Wilsonville in Oregon was one of the retailers whose Earth Animal rep reached out to her by phone, as she carries more than 50 SKUs of the company’s products and has five Petco locations within 5 miles of her stores, including one next door. Her 2022 monthly sales of N0-Hides have averaged more than $1,600.
“Considering only four varieties are launching into Petco stores, we can still upsell the other varieties. We aren’t thrilled with the news and feel that Petco will have to constantly be doing promotions and ads, so that will hurt our regular customer traffic since their ads hit mailboxes.”
Flanagan and her rep worked together to create promotions that will help her stores better compete.
“Since July-August is going to be the ad push for Petco, we chose to create a ‘percentage off of purchase’ and a bounce-back coupon for the next visit. With the new plant-based chews ready to launch, we may have some leverage.”
She sees this as an ongoing effort in an industry where brands commonly expand their distribution after starting in independent pet stores.
“This is what being a business owner means, working hard to create strategies to be cutting edge and defend our brick-and-mortar stores. We will have two events in July to leverage our outreach. We are going to take any chance we get to keep our customer base from ordering online! We are also going to be communicating weekly with our rep. We need to know what is going to happen with Petco promos and make sure the same privilege is extended our way.
“At the end of the day, with dedication, we feel that we will not feel the impact. If by chance we do, it will be time to re-evaluate the future of the product’s real estate in our stores.”
Retailers in the PETS+ Facebook group also discussed whether No-Hides would be just the first of many Earth Animal products to enter Petco. Moore points to the rolling five-year plan Powerpoint presentation, created for SuperZoo 2020 and linked to in the above letter, and said:
“We have committed to our trade partners that all new innovation will funnel through our current IPS channel first and for a period of two years. We also committed to our partners that WISDOM will remain a product for our independent channel partners and put a five-year term on that promise. We may re-new that five-year term at SuperZoo as we announce 10 new WISDOM product extensions, including an entry-level dehydrated food to compete directly with super-premium kibble products. Petco will carry our line of No-Hide chews. Wisdom or anything new is defined by our promises above.”
He said the Powerpoint presentation will be updated for SuperZoo 2022 and “will include a refreshed new product innovation roadmap, but in that new deck our channel promises will remain the same.”
Retailers who want to take advantage of Earth Animal’s offer this month to sponsor a first-year membership to Indiepet can use the discount code EAGift22 at the bottom of the IndiePet membership registration form. For more information about the promotion, visit earthanimal.com/inside-earth-animal/indiesstrong.
To join the discussion of news stories like these, pet retailers and service providers can join the PETS+ Facebook Community.
