Healthy Spot Blog

This past Wednesday, It was announced that Procter & Gamble is acquiring Natura Pet Products.  This is a very sad day for pet parents and a major shift in the pet industry.


Natura is the maker of great foods like EVO, Karma, Innova and California Natural.  It was a family run business since 1992.  Natura owns their own manufacturing plants and were never involved in any pet food recalls.  In order to keep the integrity of the company and free from undue influence, they refused to sell to big box retailers such as Petco, Petsmart and Walmart.  They were a shining example of success through the independent retailer channel with a high quality product.


Now compare Natura to Procter & Gamble.  P&G owns some of the largest names in pet food, IAMS and Eukanuba.   They are sold at all the big box retailers and even at some liquor stores and mini-marts.   Both brands were major offenders in the massive pet food recall of 2007 (http://www.accessdata.fda.gov/scripts/petfoodrecall/#Dog).  The sourcing of cheap ingredients to make money led to the deaths of thousands of pets.


Beyond the issues of the food quality and ingredient integrity, Procter & Gamble’s IAMS has also been accused of inhumane animal treatment during the testing of their food products by animal activist organizations including the Indiana Society for the Prevention of Cruelty to Animals (ISPCA) and People For The Ethical Treatment of Animals (PETA).  Here is some of the undercover footage of the IAMS practices. WARNING: This is really heart-breaking footage and may upset you. Original Link: http://www.youtube.com/watch?v=WucllIFy9iU.

No big secret, Procter & Gamble’s sole motivation is an obligation to shareholders to make a profit.  I know this especially well from my years working at a hedge fund.  As investors, we only wanted to see the management grow the bottom line. The cost is quality.  The cost is our pets.


I am greatly disappointed in the news.  Not because we carry most of the Natura lines, but rather because we are about to see this great company and its products destroyed over time.   Leaving the consumers like us, even fewer options in the marketplace.   The owners, the Rademakers, leave 25 years of building a reputable brand and now have cashed out to “enjoy the rest of their life without the risk and worry associated with operating a large and complex business”.  Sadly, the Rademakers or the CEO Peter Atkins will not stay on in any capacity with the company after the deal closes. They will collect their checks and not look back.


I don’t anticipate any immediate changes by P&G because of the short term scrutiny they will be under to keep things running the same way Natura did.  However, given the history of P&G in pet foods, it really is just a matter of time.  It may not be as drastic as a change in the formula (though likely, in the not so distant future) but simple things that the consumer may never know and would make all the difference such as the sourcing of their ingredients and the integrity of the manufacturing process.


A lot of consumers also may not understand the pressures manufacturers will be placed under once they start to go into big box retailers.  There are many examples of this in the pet food industry.  Take for example Solid Gold.  They were a leader in the holistic pet foods and in the independent channel.  When they started selling into Petco, they ran into supply issues and had to change and move their manufacturing process.  This is why, at Healthy Spot we avoid names that you find at these big box stores.  The financial pressures to supply these stores often force the manufacturers to make cost cutting changes.


To make matters worse, Walmart recently announced a billion dollar initiative to move into the pet space which does not bode well for pet product manufacturers under the weight of the retail goliath.  Did you know the world’s best selling dog food is Walmart’s very own Ol’ Roy?  Other lines they carry included IAMS, Pedigree, Beneful & Purina.  Compare the list of the names sold at Walmart to the names found on the recall list in 2007.  Is it likely it is a major coincidence or rather a product of the financial pressure of the big box retailers?


With the independent retailers and pet parents shocked at the deal, Natura and P&G will attempt to persuade us all that they will be the same company with better resources.  Consumers are smarter, we know better.  It holds the same amount of weight of saying that a slow conservative driver passing over the keys to a driver with history of reckless endangerment will have the same results.  After all, it is the same car.  But again we know that the car is not the issue.  It is the driver.   With the changing of the ownership at Natura, in time you will see different results.  Count on it.


At Healthy Spot, we will be proactively seeking new brands that remain independent to insure that we continue to provide the highest quality products made with the highest level of integrity.  Since the deal doesn’t close until end of June and we anticipate little change immediately, we view this as an excellent opportunity to identify newer and better products that meet our strict standards.  Also we still hope that, by some luck, the deal does not close.  However if it does, we will not remain idle and will be ready for action.


We are saddened because we know that we may lose some customers as a result of our new strategy to replace the Natura lines out with comparable alternatives. For us, it is more important that we don’t lose our soul.   We will remain true to who we are, our standards and what our role is.  We are here to serve as a partner with the customer, not the manufacturer, to provide the best products available.  P&G pet products have and will fall short of our measures.


As a consumer, we have the ability to make changes.  It is critical for us to stay informed and make educated choices.  What we buy, is our vote and our voice to these companies.  Ask yourself the question, why would you want to continue feed your dogs brands that sell out for profit and may have questionable integrity? Why continue to give your dog the brands that have been involved in recalls and killed thousands of pets?  Purchasing these brands is telling these companies that we are okay with their business practices. Doesn’t Spot deserve better?


At Healthy Spot, we understand that our dogs are more than just pets; they are family.   They do deserve better and we are here to help.