THE WALL STREET JOURNAL, MONDAY NOVEMBER 3, 1997
By TARA PARKER-POPE
STAFF REPORTER of THE WALL STREET JOURNAL
NEW YORK – Shopping at a pet store here, Meredith Kane grabs a 4-pound bag of
Hill’s Science Diet. At $9, it is nearly double the price of cat food sold in
supermarkets. But Ms. Kane is unswerving in her devotion to this “designer”
brand for her cats, Cecily, Oscar, Kit Kai and A.J.
Why? “My vet recommends it,” she says.
Every year, millions of people spend a total of $9.4 billion on pet food – and
many, like Ms. Kane, choose brands solely on a veterinarian’s recommendation.
Over examining tables across the country, more pet doctors lately are trashing
trusted brand names like Purina and Kal-Kan, calling them “junk food,” and
directing people to shell out an extra $20 or so for a month’s supply of super-
premium “high science” foods.
The biggest beneficiaries: Hill’s Science Diet lines, made by toothpaste giant
Colgate-Palmolive Co., and Eukanuba and Iams brands from Iams Co. of Dayton,
Ohio. Sold only through pet stores and veterinary clinics, the designer brands
pack more calories per bite and promise higher-quality ingredients based on
“pioneering research in animal nutrition” tailored to a pet’s “life stage”
or age.
The result: Vet suggestions ringing in their ears, many pet owners have
switched brands – and the life-stage category has amassed a Doberman-sized
$2 billion chunk of the market.
But few pet owners know just how far premium-market-leader Hill’s has gone
to sew up the vet endorsements.
‘Vets Trust Them’
Borrowing a page from the pharmaceuticals companies, which routinely woo
doctors to prescribe their drugs, Hill’s has spent a generation cultivating its
professional following. It spends hundreds of thousands of dollars a year
funding university research and nutrition courses at every one of the 27 U.S.
veterinary colleges. Once in practice, vets who sell Science Diet and other
premium foods directly from their offices pocket profits of as much as 40%.
“Vets trust them,” says Janil Norris, a fresh graduate of the School of
Veterinary Medicine at the University of California, Davis. While she was in
school, a Hill’s program allowed the struggling student to pay just $3 a bag
for a special prescription brand for her cat, Buffalo Sean. A bag normally runs
about $25. She also received a small stipend, courtesy of the Hill’s program,
to study orthopedic surgery with a Los Angeles vet. “Hill’s was just always
around,” she adds.
A little too much, perhaps, for makers of supermarket brands. During the past
five years, Hill’s sales have surged more than 20%, and now make up an 8% share
of the market – half that of No. 1 Ralston Purina Co., according to Davenport
& Co. in Richmond Va. For the same period, sales of pet-food giant Ralston grew
11% but its market share fell one percentage point; sales at Mars Inc.’s
Kal-Kan unit tumbled 28% and its share slipped three percentage points.
Nabbin Tabby Early
Hill’s marketing strategy is especially potent since pets are among the world’s
most loyal consumers. Nabbing Tabby early is critical: once a pet takes to a
particular brand, a later switch can sometimes cause gastrointestinal troubles;
and because a lot of felines are finicky about the look of their vittles, many
brands come in distinct shapes, like X’s and triangles. Since almost everyone
asks their vets what to start feeding a new pet, Hill’s cleverly has managed to
steer billions its way with that all-important early recommendation.
By chasing after the nation’s 126 million cats and dogs through the backdoor of
vet offices, Hill’s has emerged as a crown jewel at Colgate. Hill’s sales –
which last year were nearly $900 million, up from $40 million 15 years ago –
reflect the power of word-of-mouth marketing. While some competitors spent
between $40 million and $90 million each to advertise last year, according to
Davenport, Hill’s paid $1.9 million. Chicken feed.
Part of the Family
“The bulk of our expenditure goes to the veterinary community,” says John
Steel, who just retired as Colgate’s senior vice president of global marketing
and sales. The company won’t reveal its marketing and promotions budget. He
adds: “It’s just like taking drugs: You go to the doctor and he prescribes
something for you and you don’t much question what the doctor says. It’s the
same with animals.” Pet-food marketers also say the rise of high-science
vittles has to do with American consumers’ obsession with their own health.
“People think of pets as an extension of the family,” says Robert C. Wheeler,
Hill’s chief executive.
But the reliance on vet endorsements has its critics. “Consumers think they’re
getting a better product because veterinarians are recommending it,” says Ann
Martin, author of a new book, “Foods Pets Die For, ” She notes that many pet
doctors are “brainwashed into thinking they have to recommend these commercial
foods,” having been so heavily exposed to them in vet schools. Adds Francis
Kafifelz, professor of nutrition at Cornell University’s School of Veterinary
Medicine in Ithaca, N.Y., “I’ve never seen any research to prove animals fed
premium products all their lives have fared better than animals fed standard
products.” More definitive research would require “a lot of animals and a lot
of time,” he says, and it is too early to say there is one best pet food.”
Despite that, he feeds his golden retriever Hill’s Prescription Diet.
Science and Sales
Pet-food marketers insist it is science, not salesmanship, that ultimately
sways many of the estimated 36,000 small-animal veterinarians in the U.S.
At the Hill’s research center in Topeka, Kan., scientists proudly point to
Cocoa and Brandy, two 18-month-old Labrador retrievers. Since she was a pup,
Cocoa has munched only Hill’s products, while Brandy ate a Brand X food that
Hill’s won’t name. Brandy is fat and has a dull coat. Cocoa is bright-eyed and
slim, with a lustrous coat. “The products do what we say they do,” Mr. Wheeler
says. “We’re not selling dog food. We’re selling nutrition.”
Makers of supermarket pet foods disagree. Ralston Purina, which now sells two
premium lines and is reaching out more to veterinarians, says even its lower-
priced foods such as Dog Chow and Puppy Chow provide the same basic nutrients
as the super-premium brands. “What you’re hearing from veterinarians might be
colored somewhat by the products they have for sale,” says Larry McDaniel, a
vet himself, and Ralston’s director of veterinary marketing.
But Hill’s has a long history with the veterinary community. Hill’s Pet
Nutrition was founded in 1948 by Kansas veterinarian Mark Morris, who, in his
own kitchen, cooked up a special diet for treating kidney problems in dogs;
20 years later the company introduced its Science Diet brand, touted as a
healthier alternative than the table scraps commonly used or low-priced foods
sold in supermarkets.
The company – which never was more than a niche player in pet food and began
to diversify into other pet products, such as flea shampoos and sprays – was
acquired by Colgate in 1976, when Hill’s was part of Houston-based Riviana
Foods. Several years later when Colgate, of New York, decided to shed all
noncore business and put Hill’s on the block, a senior executive named Reuben
Mark, who would later become Colgate’s chairman, argued to keep the fledgling
company.
“I was struck by the similarity of our world-wide toothpaste business, with the
endorsement of the dentists being so important,” Mr. Mark says. “I knew if we
did the same thing with Hill’s, it could be an enormous global brand.”
So, similar to Colgate’s spadework in dental schools, Hill’s now funds a
nutrition professorship in nearly half of the nation’s vet schools. Hill’s
employees wrote a widely-used textbook on small-animal nutrition that is
distributed for free to students. Hill’s also sends practicing veterinarians to
seminars on wringing more profit from clinics and offers the only formal
nutrition-certification program for clinic technicians. In a savvy marketing
coup now being copied by other pet-food companies, Hill’s each year donates
tons of free food for the pets of cash-strapped veterinary students.
Hill’s also beefed up its sales force, which has grown to more than 500 people
from just 16 in the early 1980s, including many who are vets. Outside
universities, Hill’s is believed to be the country’s single largest employer of
veterinarians. One is Tony Rumschlag, a territory manager for Hill’s in
Indianapolis. Last month, he arrived at the Post Pet Hospital armed with framed
posters to hang on walls, post-it notes for the reception desk and free samples
of Hill’s dog treats for the clientele.
Weight Watchers
“Dr. Tony” headed for Exam Room Three, where he met with hospital veterinarian
Scot Harbin to talk about recommending Hill’s diet foods for the fat cats and
pudgy dogs that visit the clinic. Today, Hill’s is launching a special two-
month promotion to pay the clinic $3 per animal it puts on a diet. “We’re
offering a bounty to get pets on a weight-management program,” Dr. Rumschlag
says.
Dr. Harbin likes the idea, and sets a goal of putting one dog and one cat on
a diet each day. The money raised might be used to host a pizza party or even
dinner at a fancy restaurant for the staff, he says.
Later, Dr. Harbin concedes that for years Hill’s “sort of had a lock on the
veterinary market.” But now, he says, competition has increased. “At 12:30,
– the Eukanuba rep is coming in to give her spiel,” he says.
Dr. Rumschiag moves on to the Broad Ripple Animal Clinic, where he hands over
200 custom-printed coupons for pet owners to receive a discount on Hill’s food.
He also pledges about $1,200 worth of free puppy and kitten food, about 175
bags, to dole out to new pet owners who visit. Not only will the help the
clinic sell more food, but the coupons could help get pet owners back into the
clinic for a checkup, he figures.
David Brunner, who owns the hospital, says the marketing push sometimes makes
him uneasy and adds that he is careful to tell clients they can always find the
same foods at the pet store. “I don’t want to be perceived as a food salesman,”
he says. “We don’t want it to enter clients’ minds that “Oh, you’re just trying
to sell me dog food.”
Junk-Food Diet
Yet he and other vets say they are convinced premium foods are far better than
cheaper brands. One doctor compared using cheaper supermarket pet foods to
feeding a child potato chips and pizza every day. Dr. Kallfelz of Cornell says
the basic ingredients in most pet foods are the same, but the difference lies
in the amount, quality and concentration of ingredients. In general, he says,
standard foods have a higher concentration of vegetable proteins, while premium
foods have a higher concentration of animal proteins. Premium foods are
generally the same from bag to bag, while the formulation of standard foods can
change, depending on market prices for ingredients.
But Dr. Brunner says his trust in Hill’s products stems mainly from the success
he has had in treating animals with urinary tract infections, kidney disease
and other problems with the specially blended Hill’s Prescription Diet foods.
The diets can only be prescribed by veterinarians and are more than twice the
price of supermarket foods.
Other pet-food makers that have launched their own premium brands, including
Purina’s Pro Plan and Mars’s Waltham brand, have also tailored their products
to tempt vets. Ralston Purina, for instance, offers 13 “therapeutic” diets,
which can only be prescribed by vets, to compete with Hill’s popular
Prescription Diet brand. The company also now has free food programs at a
handful of U.S. veterinary colleges, and this year “significantly increased”
its veterinary-marketing budget to provide coupons for vet students to receive
big discounts on Purina foods.
To compete with Hill’s stature in vet schools, Purina last year announced a
$550,000 endowment for a professorship in small-animal nutrition at the
University of Missouri-Columbia College of Veterinary Medicine in Columbia, Mo.
The company also provided a $175,000 grant to the American College of
Veterinary Nutrition to develop a “noncommercial” nutrition curriculum for all
vet schools to follow.
‘Share of Mind’
“We feel strongly if the playing field is leveled in the veterinary colleges,
it will go a long way toward unbiased education, and it will only benefit us,”
says Purina’s Dr. McDaniel. “We feel we’re making significant inroads into
‘share of mind’ of the veterinarian.”
Not to leave anything to chance, the company is hoping to grab a share of
consumers’ minds. In new ads for a blend of Purina One, a dog visiting a
neighbor’s house prefers the Purina One food served up there. The reason? The
main ingredient is lamb, the ad says, tastier than the corn in that “designer
dog food.”
For its part, Mars has hired a public-relations firm to tout its Waltham
pet-nutrition-research center in England, and is running ads saying its foods
are “developed by vets” at the research facility. Last year, Mars spent $50
million on advertising – a 50% jump from 1995, according to Davenport.
The rivals are clearly nipping on Hill’s heels. New York vet Harold Zweighaft
says a sales call from a Purina representative persuaded him to start stocking
Purina food along with Hill’s. “Now I have as much Purina as I do Hill’s” he
says. When New York interior designer Christiane Lernieux got her frisky
Labrador pup Jake six months ago, she was all too happy to snap up some
Eukanuba Lamb & Rice, on her vet’s recommendation. “It has coat enhancers,” she
says, stroking jake’s smooth amber fur. “My vet says it’s the highest quality
brand.”
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