Hill's-Colgate focuses on therapeutic and wellness pet food
The days when people would feed their pets leftovers from the dinner table are almost a thing of the past. Pet food nowadays is a whole new ball game with the emphasis on health and nutrition, thus making pets big business in Japan.
The value of the pet market is estimated at more than 1.2 trillion yen, with pet food making up around one third of the market. Premium dog and cat food maker Hill’s-Colgate – a subsidiary of Colgate-Palmolive—is at the forefront of the business in Japan, having had a presence in the Japanese market for more than 40 years.
Overseeing the company’s operations in Japan is Gordon Dumesich, representative director and president of Hill’s-Colgate (Japan) Ltd. Born in Sydney, Dumesich has worked for Colgate-Palmolive for 20 years. He joined the Hill’s pet nutrition division about 10 years ago at the company’s Global head office in Topeka, Kansas. After spending three years as general manager of the company’s operations in Canada, he came to Japan about 10 months ago.
Japan Today editor Chris Betros visits Dumesich at the Hill’s-Colgate Japan office in Tokyo’s Chiyoda Ward to hear more.
What areas of the pet food market does Hill’s-Colgate focus on?
We focus on therapeutic and wellness food. Our products are very targeted, depending on the age and health needs of pets. We are a well-known brand name in Japan because vets, pet shops and pet breeders recommend us.
How big is the pet industry in Japan?
The market is worth about 1.2 trillion yen for dogs and cats. Pet food accounts for around one-third of that. Japan is the second biggest market outside the U.S. for Hill’s globally.
How is the market changing in Japan?
One is an emphasis on nutrition. People are definitely more interested in the health of their pets just as they are for themselves. Pets are getting older, fatter, and are experiencing lifestyle disease such as diabetes, arthritis and skin issues.
People used to put kibble in a bowl and that was all they fed their pets. Now they are looking to enhance it by adding condiments. They want the look and smell of real food just like what they feed their family. So you’ll see pieces of vegetables, and a sprinkling of real dehydrated fish.
What are some unique characteristics of the Japanese market?
Japanese are obsessive about quality. If there are any markings on or damage to packages, for example, Japanese consumers will reject it. But the biggest thing I noticed when I arrived here was the way people dress up their pets. Some of them have mini wardrobes of outfits.
Is feeding pets scraps off the dinner table a thing of the past?
Yes and no. We constantly remind consumers that if you feed pets scraps off the dinner table, they will suffer the consequences with vomiting and diarrhea. The data from our research in the U.S. on the natural life of a dog or cat in the wild is that it would be a very short life because raw food can be contaminated and doesn’t provide all the essential nutrition your pet needs.
With advanced nutrition food, pets can live 20-plus years now and that’s unprecedented. All our products are naturally preserved, enhanced with key vitamins, anti-oxidants. They are all natural food-based ingredients. The trend in Japan is for pet owners to prepare up front some extra human food which they put on top of the kibble.
Which is bigger for you – dog or cat food?
Currently, dog food accounts for about 60% of revenue.
How have the last 18 months been for the company in Japan?
2013 was a good year but a challenging year. As you know, we are affected by currency fluctuations. After the sales tax hike on April 1, there was a drop but we had a big forward buy in March.
Where are your products sold?
We have a therapeutic line of pet food called Hills Prescription Diet, that you get from a veterinarian. Your pet might be overweight, have kidney or urinary problems, so the vet has to check the pet to ensure this is the right food.
Our Hill’s Science diet brand is sold in home centers, GMS (general merchandising stores) and pet stores. Globally, Hill’s focused on specialty sales channel only, but because of distribution laws here in Japan, we are available in all outlets. Japanese consumers are also showing a very strong preference to buying their pet food online.
How do you market the brand?
Referrals from vets, pet shops and breeders and word of mouth are the main methods and we are just starting to become active in social media.
We also participate in major industry events, some of which attract 50,000 pet lovers. Often, we sample up to 5,000 sachets of our products at these events. We are trying to encourage more pet ownership in Japan, especially for old people living alone.
How do you get feedback from consumers?
We use various facets. We do product development research and shopper research. In addition, we have a consumer affairs group call center. We get about 5,000 calls a month from pet owners with questions about our products and asking advice. We use that to recalibrate our strategy.
We have a very good relationship with vets and spend a lot of time with vet associations and universities. Since we are science-based, they see us as credible and honest source of information.
How often do you introduce new products?
Twice a year – in spring and autumn—we have two new product launches because that’s the way the industry works in Japan. The products are basically the same as we sell in other countries, but we adapt for Japan in some cases. Fish is big here, so our cat offering has more fish varieties.
How many staff do you have?
Here we have about 150 people. The bulk are in marketing and sales; they do product development, research and advertising. There are two major sales functions: One is covering wholesalers because 100% of our product goes through wholesalers, making sure they know how products; and the second is the professional customers.
What is a typical day for you?
I show up between 7:30 and 8 a.m. I like to get out in the field meeting wholesalers, retailers, attending national sales meetings and visiting veterinary clinics around Japan. I am very mindful of the supply chain side of things. Since we are importing everything, we have to watch our stocks to make sure our sales forecast matches supply.
Any weekend work?
Sometimes. That’s when I meet vets at conferences or go to pet shows. But when I’m not working, I have three young kids very active in sports and I am assistant coach in the school baseball team. I have also had to pick up my golf game.
Do you have any pets?
I have two dogs and they are very healthy.