Pet-Food Crisis a Boon to Organic Players

Companies Specializing in Natural Products Thrive as P&G, Others Scramble

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BATAVIA, Ohio ( -- One brand's crisis is another brand's opportunity. As panic-stricken pet owners flocked to the web in recent weeks for news about pet-food recalls, natural-

A natural-and-organic petfood segment made up largely of small-time entrepreneurs has seen a sharp spike in sales. Click to see organic petfood ad

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and organic-pet-food brands greeted them with paid-search ads, reaping huge gains in web traffic and sales they believe could last well beyond the crisis.

Search terms
Procter & Gamble Co.'s Iams and Eukanuba have bought Google search ads against their own brand names. But those were swamped by other buyers of paid-search ads around "pet food" and "pet food recall" last week, including several natural and organic brands -- and, which was looking to capitalize on the heavy news interest.

A natural-and-organic segment made up largely of small-time entrepreneurs appears to be getting traction -- and sophistication -- fast. Blue Buffalo Co., one of the natural-product marketers doing search ads in the wake of the crisis, is headed by CEO Bill Bishop, one of the founders of the SoBe beverage brand.

Gluten-free products
"We don't want to benefit from anyone's misfortune when dogs and cats are dying," Mr. Bishop said. "The fact is that Blue Buffalo, and I would imagine most of the natural pet foods that are gluten-free, have benefited significantly."

Tainted wheat gluten from China is believed responsible for the deaths of possibly thousands of U.S. pets, triggering a recall that started March 16.

Blue Buffalo sales are "through the roof," and traffic to the brand's websites is up "50- or 60-fold" since the crisis began, Mr. Bishop said. He already had planned the brand's first national ad campaign this year but moved up the timetable when the crisis hit.

'Feed them like family'
A full-page, full-color ad for the brand appeared April 5 in USA Today with a simple message: "You love them like family. So feed them like family."

The ad, created in-house, went on to detail that, unlike many mass brands, Blue Buffalo has no corn or soy protein, animal byproducts -- or wheat gluten.

It was a contrast to the somber, black-and-white, full-page ad two days earlier from Iams and Eukanuba, the biggest customers of Menu Foods, the Canadian contract manufacturer most heavily affected by the recall. The letter-style ad said employees were "heartsick any of our products were involved" and assured consumers the brands' dry products were safe and produced by P&G.

A P&G spokesman said it's too soon to tell how Iams and Eukanuba sales will be affected long-term or whether the spike in niche brands will last.

Iams sales
A Morgan Stanley report last week said Iams sales were flat year over year for the four weeks ended March 25, which included only about one week affected by the recall, compared to up 4% in the same period last year.

Even before the crisis, the Organic Trade Association projected natural- and organic-pet-food sales grew 36% last year, and Datamonitor projected they would reach $1 billion by 2009, compared with $15 billion for all pet food.

Vladimir Fernandez, a Miami field distributor of Life's Abundance pet food, which also bought Google search ads last week, said sales are up 300% since the crisis., an online retailer of specialty pet products, has upped its search budget and seen sales climb more than 30%. That's despite or, as president and founder John Gigliotti believes, because it stopped selling all products from Menu Foods -- not just the recalled ones.

Most retailers haven't gone so far, but the move looked more prudent April 5 as Menu added 20 more products and one more month of production, going back to Nov. 8, to its recall, which covers five manufacturers and more than 100 brands.
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