Rafi Mohammed

Pricing Lessons From the Pet Food Recall: It's All About Versioning

Posted on April 20th, 2007 (0 Comments)

While I often strive to impart a touch of humor in my blogs, I want to be clear that I find nothing funny about the current pet food recall. As an anxious pet owner, I visit the FDA’s site daily to check if my cat’s food has been added to the recall list. Let’s hope that at the very least, the manufacturer gets economically zapped for their poor quality control.

Like most pet owners, I was shocked to find out that one company (Menu Foods) produces so many different brands of dog and cat food…at a wide array of varying prices I must add! Over 100 brands are affected in the recall alone. The same factories that artisinally craft Iam’s (whose pledge is: “you can feed Iam’s with confidence”) and Science Diet (“The Global Leader in Nutrition”) pet foods also crank out lower-end private label brands for grocery store chains.

But when you think about it, Menu Foods is practicing a classic versioning strategy: it produces good, better, and best versions of pet food. Emphatic to make this strategy clear, a spokesman for the Iams and Eukanuba brands asserts “the different branded products made by Menu Foods are not the same.” Menu Foods claims it makes more than 1,300 different recipes and the lines are cleaned between runs. That said, would you really be surprised if it came out that many of the recipes are the same for the various branded products manufactured by Menu Foods (at the very least, for their private label brands)?

This versioning strategy also brings up the concept of value residing in the eyes of the beholder. Many veterinarians have long claimed there’s little evidence that high-end pet foods are better than the cheap stuff. Consider a comparison between a $1.19 can of turkey cat food manufactured by Wellness pet food (a “holistic pet food made primarily with human grade ingredients”) vs. a 33 cent can of Friskies (manufactured by the international conglomerate Nestle). Ingredients in the Wellness tin include turkey, chicken, sweet potatoes, carrots, cranberries, and zucchini while the Friskies recipe includes turkey with meat and poultry “by products.” They sound very different…right? According to Rebecca Remillard, a veterinarian-nutritionist at the Angell Animal Medical Center in Boston, there is no difference nutritionally between these $1.19 and 33 cent pet food products (excepted from a recent Boston Globe article written by Bruce Mohl)The difference in value lies in the eyes of the pet owners. Let’s face it, how many of us really want to know what the “by products” ingredients in Friskies are? As a result, some pet owners willingly pay a 250% premium so their Fido doesn’t dine on “by products.”

Thus, using the same base ingredients and facilities, Menu Foods offers good, better, and best versions. Pet owners then select how much they want to pay for their pet food. And as this discussion clearly illustrates, the difference in value is truly in the eyes of the beholder. Case in point: I recently spoke to a lighting fixture manufacturer that was able to raise prices by 10% simply by including the term “European Design” to their packaging…need I say anymore?

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