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    NONFOODS: Animal instinct

    By matching the right products to its consumer base, Sunflower Market's pet business is no longer in the doghouse.

    "Serious Food -- Silly Prices" is Sunflower Market's motto. The Phoenix-based independent grocer operates 10 stores in Arizona, Colorado, New Mexico, and Nevada, all of which share a farmers' market feel and a fun shopping atmosphere.

    But there was nothing silly about pet products sales at the chain earlier this year. "The pet category was just kind of flat, not doing anything exciting for us," says Sunflower Market's senior director of operations and purchasing, Bob Millsap. "It wasn't attractive to our core shoppers, the shoppers who are driven in by our crazy produce and meat prices. They were coming to the pet category and seeing these brands that they really didn't recognize, at price points that, although they were great for those particular brands -- better than anyone else could offer for those brands -- just weren't making the connection with our customers."

    Sunflower's core shoppers are typically mainstream consumers who lean toward healthy eating. While not hardcore organic consumers, they want healthful, premium products, but aren't comfortable with paying premium prices.

    Sunflower Market was built around providing such a value equation. "The format of our stores is similar to a farmers' market -- very produce-driven," says Millsap. "It's kind of like a farmers' market meets Trader Joe's, so to speak. The founder of Sunflower Market also founded Wild Oats. So you'll see elements of the Henry's Farmers Market model [a 27-store fresh and natural food retailer, acquired by Wild Oats in 1999, with locations in Southern California and Arizona], elements of the Trader Joe's model -- stuff from a lot of different folks all rolled up into one."

    To make his pet category live up to consumers' expectations, Millsap reassembled the entire category from scratch, keeping his core market in mind. Those products that didn't fit the bill were replaced by new ones that did, until a new working model for the assortment emerged. "The products we dropped were more specialized and higher-end, more geared toward the traditional natural food-type stores," explains Millsap, "and they were at a price point that wasn't quite compatible with our shoppers."

    Right product, right time

    The revamped category centers on the Pet Promise brand from Natural Pet Nutrition in Westminster, Colo., a line launched last October. The name is based on the product's guarantee of purity (see the sidebar at left).

    In addition to canned and dried food, Sunflower will also market Pet Promise's treats, supplements, and supplies, the last of which include shampoos and conditioners.

    "Its packaging and presentation is very attractive to that mainstream shopper who shops in our stores," says Millsap. "It's priced in a range where that mainstream shopper feels comfortable that they're giving their pet the best-possible-quality products."

    The Pet Promise line is merchandised in an eight-foot section within the pet category. Front and center is Pet Promise's "Promise of Purity." "The packaging and merchandising really make a statement," says Millsap. "They've also done some demos and couponing to add to the merchandising impact. Plus, with the volume we're going to show in that particular line, we were able to convince our primary distributor, UNFI, to carry it."

    Sunflower's product offering isn't totally devoted to Pet Promise, however. Balancing out the remainder of the 16-foot pet aisle are Aptos, Calif.-based Newman's Own Organics pet food, and treats from Castor & Pollux Pet Works in Portland, Ore.

    "Anything with a Newman's Own organic label on it is really doing well," says Millsap. "They've come out with a line of pet food that has limited SKUs, but it's doing well. Castor & Pollux is also a known brand, and they've developed a great program for us. They're going to be rolling out their toys and supplies. Altogether we'll have approximately 16 feet total of pet per store."

    To date, tests have shown positive results. "We tested it in our North Phoenix location that opened early in the year, and we saw a substantial bump in our pet food sales," says Millsap. "It was noticeable from day one. It's definitely going to help our basket size. Currently it's in several stores, but we're in the process of rolling it out to all 10 of our stores and expect to finish during the summer. With the new products and strategy, we've finally turned our pet category into a destination."

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