New tricks for old brand: Hartz strategy takes package-goods tack

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Alberto Dobles, roaming the aisles of a Manhattan Petco searching for cat supplies, is asked if he recognizes the Hartz name. "Oh yeah," he said. "I used to buy [pet] toys in the grocery store and saw [the Hartz brand] there."

It's a familiar dilemma at Hartz Mountain Corp., where recent research found that consumers recognize the brand but view it as old-fashioned and not unique. But now, under ownership of Japan's Sumitomo Corp., the pet-supplies marketer founded by German immigrant Max Stern in 1926 as a singing canary purveyor is making itself over. Its ambitious plan is to expand globally and double revenue to $800 million over the next five years. It's aiming to do so by revamping its packaging, introducing a host of upscale and innovative new products, refashioning advertising and widening distribution beyond groceries and five and dimes.

"The Hartz line got a little stale and old in the recent past," said Seth Mendelson, editorial director, Pet Business and Grocery Headquarters magazines, but its new strategy appears on track. "Hartz has a lot of muscle in the industry, particularly because of its great distribution at mass-retail, such as in grocery stores," he said. "They've brought on a good team of veteran retailers, too. Going into specialty and big-boxes, there's a lot of room to grow. "

Hartz was bought by investment company J.W. Childs Associates in 2001 and the following year introduced only two new products. Last year, a total of 60 new products bearing the Hartz brand hit store shelves, including such esoteric offerings as Hartz Pet Shoppe botanicals shampoo in varieties like soothing oatmeal, breath strips for dogs and yogurt soynut surprise for birds and small animals. "New products are the lifeblood of the industry," said Hartz CEO Bob Devine, noting that the company's overall strategy is to transform itself from a pet-supply distributor to a package-goods marketer.

big business

The potential payoff is not mere kibble. In 2003, pet owners in the U.S. spent $32.4 billion on pet supplies, according to the American Pet Products Manufacturers Association, up nearly 10% from the prior year. The projected market size for this year is $34.3 billion, an almost 6% increase.

To oversee the effort, Mr. Devine hired a package-goods player, VP-Marketing Alan Kerzner, whose resume includes stints at both Procter & Gamble Co. and Johnson & Johnson. Mr. Kerzner quickly noted that "most trends that happen in the people market often happen in pet food"-hence the oatmeal shampoo and doggy breath strips. From a marketing standpoint, he figured that some of the same approaches used with package-goods for humans applied to those for pets.

redesigns

Hartz has also redesigned its packaging to create a sleek and identifiable look, and simplified its product line from 17 sub-brands down to five, each of which have a clear benefit-such as dental, nutrition or at play. Rather than focus simply on making the sale, Mr. Kerzner is also focused on customer retention. "Why not follow someone from the time they get a puppy?" he asked.

To that end, Hartz is trying to build a database of loyal consumers via a monthly e-mail newsletter. Its Web site, designed by Dot-Glu, a unit of MDC Partners' Kirshenbaum Bond & Partners, New York, and launched this spring, offers consumers educational information and advice on pet care and products.

Although Hartz is serious about building its stature as a resource for pet owners-Mr. Devine, for instance, has hired four veterinarians to oversee an extensive research-and-development division-the company in its advertising doesn't take itself too seriously. Hartz' TV spots-60-second direct response ads created by Kirshenbaum, now airing on cable-are tongue-in-cheek takeoffs of "Queer Eye for the Straight Guy." Hosted by two fey announcers who say lines like, "Hello-tosis" before handing a dog a breath strip, the spots promote Hartz' products and invite consumers to call for their pet makeover kits containing product samples and coupons.

The final component of Hartz' own makeover is the expansion of stores that sell its products. It's now being sold in PetCo, PetsMart and Petland and also in such discount stores as Target, and some items are distributed exclusively to specialty pet stores. "It's the first time we've had exclusive products for pet specialty stores," said Mr. Kerzner.

He said sales are up 17% over one year ago to $468 million.

No longer will consumers like Mr. Dobles know Hartz only by having seen the bright orange logo on grocery store shelves.

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