SAN ANTONIO, Texas -- Retailers can thank H.E. Butt Grocery Co. here for the new 9-Lives Canned four-packs of cat food that are now making their way to store shelves.
According to Dan Friedrich, general manager of 9-Lives at Newport, Ky.-based Heinz Pet Products, Robert Kailing, who was the category manager for pet foods at H-E-B, was the "catalyst" behind the company replacing its individual 5.5-ounce cans with bundled, single-variety four-packs.
"Kailing was an early pioneer in ABC [Activity Based Costing], and he is the one who came to us and said he was not making money on these little cans, because they are too expensive and the labor is too high," Friedrich said.
ABC factors in the total cost of handling a product, including shipping fees, warehouse storage and costs associated with stocking, ringing up and bagging products.
"We did some testing with H.E. Butt, and we had some initial positive results," Friedrich said.
Kailing could not be reached for comment. An H-E-B spokeswoman said he is no longer the category manager for pet foods. H-E-B did not return further phone calls seeking comment.
After the H-E-B test, Heinz further studied the possibility of offering a four-pack by doing a 20-market, simulated in-store test in the back rooms of shopping malls across the country, where it interviewed thousands of consumers.
"We set up grocery shelves in mall settings, and the canned cat- food buyers came in and shopped the set like they would in a grocery store," Friedrich said. He noted the sample sets only contained canned cat food but had all of the competing brands, including the leading private label in each market.
Consumers were invited to "shop" the aisle and take the cat food home to feed their kitties.
They were invited back a second time after the four-pack bundles were placed on the shelf.
"They said the varieties were easier to find. At first the consumers were saying things like 'I didn't know that you had chicken & tuna,' and it had been in the market for more than 15 years," Friedrich said.
"What this packaging does is put the variety name bigger so they could see what the varieties were, and as a result they thought there was more variety because they could read them easier," he said.
The bundle packs are wrapped in plastic, featuring a large picture of company spokescat Morris on the overwrap. Within the packs, cans are stacked two high and two wide, and are designed to easily fit within existing shelf sets.
Heinz began shipping the bundle packs to retailers in late March. Initial flavors include 9-Lives Super Supper, Shredded Turkey, Sliced Beef, Ocean Whitefish, Shredded Salmon, Chicken & Tuna, Shredded Ocean Whitefish and Sliced Chicken. By next January the remaining varieties of 9-Lives 5.5-ounce cat food will be converted to four-packs. Eventually the large 12.3-ounce cans will be bundled also.
Each 5.5-ounce four-pack will sell for an average price of $1.16, the current price of four individual cans when bought together.
Friedrich said the four-packs will be more profitable for retailers, because aside from cutting down on stocking costs, research shows consumers will buy multiple bundle packs, increasing category sales as a result.
"We feel the success of [9-Lives four-packs] will force the competition to follow. Eventually, at least in our vision, we will see the entire category switching over to multipacks, which is really good for the trade because their profitability dramatically increases when everybody goes to it," Friedrich said.