Private label pet food programs can mean big sales for retailers. But how do you know if what you’re doing is working? In this blog, we discuss what it takes to be successful, and 3 key indicators to watch out for.
Launching a house pet food brand isn’t easy. To have real private label success, in pet food specifically, there are important steps that you must take first.
Part I. The Building Blocks of Private Label Success
1. Know Your Customers
It starts by considering where your product or product line will fit into the tiers that make up the pet food marketplace.
Today, private label pet food is much more than a value option solely focused on low pricing. You can launch a premium or super premium pet food brand, appealing to customers who are less focused on price and value higher quality (or even exotic) ingredients.
So, what products are most successful at your store? How would that translate to pet products? Is your average customer price-driven? How likely are they to examine the ingredient list and package design?
Once you know what your customers are looking for, you will be able to craft a brand promise based on that information. Then, hopefully, your brand will deliver on that promise, and your customers’ perception of your brand will match your intentions. This is the best way to build a private label pet food program that appeals to your customers.
2. Invest in Your Brand
Knowing your customers and creating a product they will like is one thing. Promoting and delivering that product to them is another. There’s no “if you build it, they will come” here.
Private label success also depends on the investment you make in your brand.
For example, retail-worthy pet food packaging must consider many stylistic, functional and regulatory elements. From bag style and material to visual elements, this investment in your brand is important to make a lasting impression on your customers.
Also, don’t forget to invest in shelf space, promotional displays and advertising. The good news is that this is typically less expensive than promoting a national brand in your store.
Remember: You’re building a brand, not just a cheaper alternative.
3. Partner with a Pet Food Manufacturer
Of course, you will need to work with a pet food manufacturer to actually produce your pet food. But a manufacturer is much more than that. A good partner will guide you through the entire process: R&D, formulation, packaging design, bag size, style and materials, compliance, production and distribution.
The right manufacturer should help you not only execute on your ideas but also help you come up with new ideas based on trends in the market.
Ultimately, the quality of your pet food product will be dependent on the manufacturer you partner with. It’s important to select a private label pet food manufacturer you can trust, one you can depend on to deliver the quality you are promising your customers. The partnership you have with your pet food manufacturer can make or break private label success.
With these building blocks in mind, what does a successful private label pet food brand actually look like?
Part II. Signs of Private Label Success
1. Better KPIs
A clear sign of private label success will be an improvement in key performance indicators (KPIs). This speaks to the importance of identifying goals and metrics ahead of time – and then tracking them as you launch your brand to see how they may evolve.
You can separate your KPIs into two main categories: revenue related metrics and customer metrics. Here are some good measurements to track but be sure to align your KPIs with your overall retail goals and processes.
Revenue Generation
- Year-over-year sales: Compare sales from one period to the same period in the previous year. This provides a good before and after snapshot of the success of your private label pet food.
- Gross margin return on investment: Measure your return on the funds you invested to stock the private label brand. This is a direct indication of how much money your inventory of the private brand has made.
- Sell-through: The percentage of units sold versus the number of units available to be sold. This is another great way to directly evaluate the performance of your private label pet food brand.
Customer Service
The following metrics should be applied specifically to your pet food brand and the way your customers interact with it. They can be collected through purchase data as well as online reviews and surveys.
- New customer acquisition: This reflects the cost to acquire a customer, allowing you to measure your investment into your private label brand against its effectiveness of bringing in new customers.
- Net promoter score: A direct metric of customer loyalty. This measures the willingness of customers to recommend your pet food product to other people.
- Customer satisfaction: A measurement of your customer’s experience with your pet food.
- Customer retention: How many new customers actually return to your store to repurchase your pet food brand? If your products are performing well and you’re building brand loyalty, this number will be higher.
- Brand perception: How are you measuring up to your brand promise? You want your customers’ perception of your pet food brand to match the image you are presenting.
2. Increased Brand Loyalty
As discussed, you will see brand loyalty reflected in certain KPIs. But what does this actually mean?
Brand loyalty goes beyond the numbers. Loyal customers are typically more engaged, leaving reviews and testimonials online and promoting your brand to their family and friends.
If you truly invested in your band and the quality of your product is good, customers will keep coming back for more. Plus, you’re the exclusive source of the pet food, which creates stronger customer recognition.
3. More Innovation
A successful private label brand will provide more opportunity to bring new products to the market.
With private label, you have more flexibility to pivot and respond to trends. This is because you have more leeway to experiment with new products while continuing to offer more essential items at a steady price without as much risk.
This is especially true if you work with a partner that has in-depth R&D domain expertise. You will be able to develop and implement new ideas to gain more market share. Or make quick adjustments to products based on the ever-evolving customer preferences.
Conclusion
At the end of the day, private label success comes down to two important relationships: The one you have with your customers, and the one you have with your pet food manufacturer.
So, make sure you don’t make hasty assumptions about what you think your customers want in the process of developing a new pet food product. Deeply consider their needs and preferences and continue to respond to them as they may evolve
And working with the right pet food manufacturer partner will make it easier to pivot and better serve your customers. The positive results will follow.
Alphia helps retailers create market-leading pet food from concept to shelf. Learn how to create pet food here – or contact us if you’re ready to get started.