A summary of my recent trips around the U.S. including my comments on regional trends and the economy
by Mark V. Howley
This blog is a summary of my customer and prospect visits and my observations on regional trends, the economy. I made several trips to customers and prospects throughout the US between September and November. It was old school stuff filled with face to face meetings designed to extend my gratitude for business, hear about any concerns, introduce new PBI products, or introduce PBi to new prospects. It was a fast paced schedule filled with hotel stays, fast food and airplanes rides, but it made me feel good…almost young and spunky!
My travels took me all over: Montana, Idaho, Wisconsin, Illinois, Missouri, Kansas, Louisiana, Alabama, Arkansas, Florida and Georgia. It fires me up when I see and hear about customer’s business, their markets and strategies, and of course our competition. The face to face and first-hand experience is priceless.
My observations on the economy of coffee and petfood:
Coffee: It is said by pundits coffee is a stable in both the up and down markets. I agree and go a step further when discussing regional, and for lack of a better term the micro-regional* specialty coffee. The vast majority of the customers and prospects I visited reported business has been good, not great, throughout the downturn. I also met numerous companies launching new targeted high end coffees into regional markets.
a) Midwest – coffee consumers like flavors. It’s obvious the minute you get into the middle of the country. This is not trend or fad. Flavored coffee has had a strong following in the central US for years. I’ve seen it!
b) Regional cafes adjusted to Starbucks with a more enjoyable place for socializing, studying and consuming coffee. This is not a new observation, but it’s obvious café owners put a lot of thought into competing against the big boys. All the cafes I visited were designed for socializing – some traditional, or tied to the region, or artistic/eclectic.
c) Ethnic/cultural specific coffees are on the move. What’s the roast/brew preference for these target groups? Did you ever think about coffee folks from the Middle East, Asia, etc.
d) Green Beans: the rising cost of green is killer everywhere, but prices, I am told, seem to be on the downturn. This is hearsay, as I don’t know commodities and I stay out of the commodity speculation business.
f) Biotre® (pictured on the right): PBi introduced Biotre®, a biodegradable heat sealable barrier material, in response to customer requests. There is a lot interest, and we are interested to see if the price premium supports the technology.
(*) Small roasters and cafes who serve small communities. I assume we all know the small folks that dot our country side. I just made up “micro regional” while I was typing the blog. Sorry for any confusion.
Specialty petfood: Customers and prospects I visited, mostly in the middle of the country, all report a similar story to coffee. Consumer dedication to companion pets was not hurt in the past few years. I met with companies expanding production, launching new products and buying companies in the pet food, treat and pet care markets.
a) Investment money has stormed the market and consolidated a lot of brands. There will be losers and winners.
b) Independent channels are reeling from the Natura/California Natural sale to P&G. As a result, there is considerable activity with specialty products, sold by companies dedicated to the independent stores. Loyalties are shifting and opportunities can be seized.
c) Premium diets and treats (raw, frozen, extruded and baked): continue to grow and new smaller companies are introducing products at a fast clip.
d) Petfood packaging (the devil is the details!!): Small and medium size companies need to dot the “i’s “and “t’s” when they review packaging. There is an enormous array of options, but all bags need to be filled and sealed properly.
Here are few pieces of time and money saving advice:
- Get your co-packer or your production manager involved in packaging decisions as soon as possible.
- Get your package supplier, hopefully PBi, in touch with production as soon as possible. Some great packages can be a production nightmare!!
I wish I could go on and on about all the great customers and prospective customer I met, but much like my days on the road, all good things come to pass.