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A trip to PetsMart or Petco, where pet foods are stacked wall-to-wall and sold at cut-rate prices, is proof positive that something dramatic is happening to the pet-food industry.

These chains, added to the traditional mom-and-pop pet stores, now account for more than 40% of petfood sales. By contrast, a decade ago supermarkets handled 95% of the business, according to Pet Industry Joint Advisory Council.

By sheer numbers, pet superstores are quickly maturing into a massive retailing tier. PetsMart currently runs 244 superstores nationwide and Petco 227 stores, to name just two, with most of those outlets coming onstream in the last five years.

Stores may include in-store veterinary clinics, adopt-a-pet pounds, grooming centers, and they may have obedience classes.

While most offer supermarket pet-food brands at prices that undercut the grocer, their bread-and-butter remains the premium to superpremium brand not found in food stores.

The shift in retail focus has fostered growth in the superpremium pet foods-Colgate-Palmolive's Hill's Science Diet, Iams Co. and Nitro Products (Nutro brand), for example-the products of choice in the big specialty retailers. That's a major reason grocery stores have whimpered the past several years.

Indeed, superpremiums have been growing while the overall industry has remained flat. Even with last year's 4% growth to $8.8 billion in pet-food sales, the higher dollar volume was credited to the superpremiums and an increase in pet ownership.

The major marketers, especially leader Ralston Purina Co., are starting to bite back. Borrowing marketing tactics from the superpremiums, Purina has introduced its Pro Plan and Clinical Nutrition Management into pet superstores and veterinary clinics. H.J. Heinz Co. is co-marketing with Veterinary Centers of America a product called Vets' Choice, sold only in veterinarian hospitals. VCA is a West Coast-based chain of vet clinics and laboratories.

"It's basic Marketing 101," says pet-product analyst Gerald Schmoling, Schmoling & Associates. "If you can't compete in the same category, you start a new one."

Other category marketing giants are improving their core brands and increasing media spending after several years of debilitating price slashing and couponing on traditional pet-food lines.

Nestle's purchase of Alpo from Grand Metropolitan and Heinz' purchase of Quaker Oats Co.'s U.S. pet-foods division also have shook loose dollars to reinvest in products and advertising.

Although grocery sales of pet foods remain relatively flat, the stronger line of grocery brands now selling in pet superstores seem to be taking some of the steam out of Science Diet and Iams. Ralston Purina, with 17% of the entire market in 1994, finally is recovering after 10 years of declining sales, led by a 7% surge in Dog Chow sales to $262.2 million in 1994, according to John C. Maxwell, analyst with Wheat First Butcher Singer.

"What has been significant for [Purina] over the last 12 months is its mix has evolved more from low-end foods to mid-market, which is really the Chow products," says Michael Mauboussin, analyst at CS First Boston.

Abetting Purina's movement was a 50.7% boost in media spending, to $80.9 million. Media support for Dog Chow and Puppy Chow grew a collective 81%, to $28.2 million, and its Pro Plan brands went from virtually no spending to $4.4 million, according to Competitive Media Reporting.

Nestle also began pumping dollars into Alpo; advertising for the brand had been in limbo while Grand Met was shopping for a buyer.

Hill's Science Diet circumvented the media trough for direct mail as its media spending slipped to $2 million, from $10.3 million in '93. Nutro's media total also decreased.

Iams was the exception among superpremium leaders: Its media total grew 27% to $6.3 million as it introduced consumer advertising for its Eukanuba line.

In 1994, nearly 20% of the pet-food market, or about $1.75 billion, was claimed by superpremiums. That's up from a 15% share, or $1.2 billion, for that segment two years ago, according to Mr. Maxwell's data.

Hill's accounted for 41% of that superpremium total. But analysts see chinks appearing in the pet-food brand's armor.

Three years ago, Science Diet was carried by 80% of veterinarians; that is down to 60%. The product carries little profit incentive for the vets now that pet superstores are underpricing the market. Vets also are short on space and find it more difficult to endorse a premium product now that there are so many.

Hill's and Iams also are facing growing competition from small, regional superpremium pet-food makers like Century Petcare, with sales of about $100 million. Century supplies pet stores with Advanced Nutritional Formulation and Peak premium brands, but it ventured this May into new territory by introducing into supermarkets a vacuum-packed superpremium line called Carnivore. Carnivore is designed for convenience-it's packaged in three-pound, vacuum-packed "bricks" for dogs and cats.

Century opted for supermarkets because of the paucity of premium, much less superpremium, brands in those outlets.

Ralston Purina's Purina O.N.E. is the largest premium brand in grocery stores, with sales of $70.8 million last year. Some analysts predict Science Diet and Iams may eventually be forced into the grocery arena, too, as pet superstores cut further into their profit margins.

But that is a brave notion, given the slotting allowances and intense competition at that level. Alpo's Waltham and Carnation's Perform are but a few of the attempted superpremiums now in the grocer's graveyard.

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