Made in the USA: a PPN Industry Roundtable

Retailers share what they believe the definition of Made in the USA should mean and what industry and customer trends they’re seeing on the front lines where American products are or are not being bought. Manufacturers respond with the triumphs and challenges of sourcing, manufacturing and employing in the U.S.<br />Shutterstock (4)<br />RETAILER...

Retailers share what they believe the definition of Made in the USA should mean and what industry and customer trends they’re seeing on the front lines where American products are or are not being bought. Manufacturers respond with the triumphs and challenges of sourcing, manufacturing and employing in the U.S.

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RETAILER FEEDBACK

Chelsea Cassidy, assistant manager at Anaheim Feed & Pet Supply in Anaheim, Calif.
Sherry Redwine, co-owner of Odyssey Pets in Dallas
Ryan Mello, assistant manager at Salisbury Super Pet in Salisbury, Md.

Pet Product News: What is your definition of Made in USA?

Chelsea Cassidy: Made in the USA means that the item has been manufactured here in the USA and contains a majority of the ingredients from the USA.

Sherry Redwine: I believe 100 of the product should be sourced and made in the USA. Or, every country involved should be listed. It would serve as a way for a company to be [held] accountable.

PPN: Talk about pet products completely sourced and made in the USA versus those assembled or formulated in the USA but sourced elsewhere.

CC: Products that say “manufactured in the U.S.” can be misleading to customers, and they may assume that all the ingredients are sourced in the U.S.

Some brands we carry that are made and sourced in the U.S. are Plato Pet Treats, Merrick, Evanger’s and I’d Rather Be With My Dog. These brands are made in the U.S., but some of their ingredients are from out of the country: Zignature, Fussie Cat and Weruva. This isn’t necessarily bad, as some of these ingredients cannot be found in the U.S., but at least these ingredients are not coming from China.

SR: A customer pointed out to us, unfortunately, that a certain brand of rawhide [Tasman’s] that we’ve carried is “processed in Mexico” but has the U.S. flag with “product of the USA” underneath it. We don’t understand how this product can say “Made in the USA” but be processed in Mexico. This is the kind of thing that hurts my store brand, because we are known to only carry USA-made edibles.

PPN: Do you see more manufacturers in the pet industry altering their sourcing and manufacturing to acquire the U.S. label? CC: I have seen this becoming a main concern for the pet industry. Companies are making customers see that it is a product of the U.S. by putting the made in the USA stamp on the front of the bag. [When manufacturers do] this, customers are not [confused as to whether] the item is made in the U.S. or not.

SR: Definitely. Dogswell treats come to mind. Also, N-Bone. I believe that the big-box stores had a big part in this trend. Since they’ve removed China-made products from their shelves, many treat manufacturers are second-guessing how they’ve been conducting business.

PPN: Has consumer interest grown with the trend? Are they asking informed questions about sourcing?

CC: Two years ago, we created a treat wall that says, “China-Free Treats.” This wall is entirely dedicated to non-China treats, and we have recently remerchandised the wall, so all the made in the USA treats are next to each other. This change made a huge impact on our customers, and they were thrilled to see that we were aware of the problems with the China products. Customers are able to shop in a worry-free environment when selecting treats.

"Not as many customers are as concerned about the toys as the treats and food."—CC

"We have a small endcap for made in the USA toys. This has been more difficult, because a lot of the USA-made toys are very expensive and are hard to move in the store. Not as many customers are as concerned about the toys as the treats and food.

Also, any dog food brands not made in the U.S. are in a different section of the store, mainly toward the back.

SR: Customers are concerned about Chinese-made products, specifically in the edible departments. USA-made toys are harder to come by at a good price, but we are always on the lookout for quality U.S.-made toys.

Ryan Mello: We definitely have noticed an increase in demand. A few years ago we would get a few customers periodically throughout the year asking for American-made products. However, in the past year, the number of customers asking for American-made products has grown tremendously.

Many of these customers would come to us asking for dog treat alternatives to the ones manufactured in China. After multiple public recalls, this has encouraged many consumers to care more about where the treats come from.

PPN: How likely is the Made in the USA trend to continue growing?

CC: This trend will continue to grow as customers are becoming more aware of their pet’s food. Owners are treating their pets family and will only give them the best of the best, which will eventually become USA-made products.

SR: This trend will keep growing. USA pride is a factor as well as the knowledge of recalls that have happened due to Chinese production. Millennials especially are really into shopping and sourcing local.

RM: We at Super Pet definitely feel this trend is here to stay, because the customers who care where their dogs’ treats are from are not likely to stop caring.

MANUFACTURERS RESPOND

Jerry Moffet, vice president of sales and marketing for Ruff Dawg in Worcester, Mass.

What is your definition of Made in USA?
For a product to be labeled “Made in the USA” it should be 100 percent produced or assembled in the USA with at least a majority of all the raw material or parts coming from within the USA.

How likely is it that more manufacturers in the pet industry will alter their sourcing and manufacturing?
It’s inevitable. In the last few years, we have seen a majority of treat and food manufacturers move production back into the USA due to consumer demand for safety.

"As a 'pet parent,' if you are afraid to feed your pet food or treats made in a foreign country, why would you trust a toy, or any other hard good, that is manufactured there?"—JM

Are more foreign markets requesting U.S.-made pet products?
We do see a growth in our sales from foreign markets, but not as substantial an increase as with our North American customers. I believe this is due to the value of the U.S. dollar versus the value of other currencies.

How likely is the Made in USA trend to continue growing?
I believe it is here to stay and will continue to grow. It’s an uphill battle for all of us that push made in the USA products. Buyers and consumers want to purchase made in the USA products but still want to pay the lower overseas pricing.

Ward Johnson, president and CEO of Sojos in Minneapolis

What is your definition of Made in USA?
“Made in the USA” means just that—the product is manufactured in a production facility located in the United States. All Sojos foods and treats, for example, are made under our own roof in Minneapolis.

Talk about pet products completely sourced and made in the USA versus those assembled or formulated in the USA but sourced elsewhere.
“Sourced” in the USA means the item or ingredient was purchased from a U.S.-based company. That sounds simple enough, but when it comes to raw ingredients, there’s an important distinction between “USA sourced” and “USA grown.” For example, instances can be found where an ingredient grown off shore and imported by a U.S.-based company for further processing has been designated “USA sourced.”

How likely is it that more manufacturers in the pet industry will alter their sourcing and manufacturing?
As a result of the 2007 recalls involving melamine-tainted pet food from China, followed by recent recalls of Chinese jerky treats, many retailers have chosen to eliminate Chinese pet products from their food and treat shelves. Manufacturing in the USA also provides greater control over the quality and consistency of products, and eliminates the need to divert production dollars to transportation costs and other inefficiencies that are unavoidable with imported products. As a result, it is highly likely that more manufacturers will alter their manufacturing to make Made in the USA a priority.

“The questions about companies stating made in USA but sourcing elsewhere are not fooling the public. The consumer is catching on, and it makes them angry that companies are scamming them. At Python Products we do a lot of different shows throughout the year. We listen closely to what the consumer says and wants. We continuously receive thank yous for making it here in America. We are asked why other companies don’t make their products here and honestly can’t give them an answer. The consumer is willing to pay for made in the USA products because they know they are safer and the quality is of a much higher standard. This is why at Python Products our tag line is: ‘Quality is proof … You have a choice … Choose American!’”—Lance Reyniers, president of Python Products in Milwaukee

Rashell Cooper, marketing director for Redbarn Pet Products in Long Beach, Calif.

What is your definition of Made in USA?
A reasonable definition of Made in USA means that the product is not only manufactured in the USA, but also that most of the ingredients are sourced from U.S.-based ingredient providers. We have a comprehensive definition of the word “manufactured.” In our Great Bend, Kan., plant, Redbarn cooks, cleans, assembles and packages the majority of our products. This commitment to providing American jobs, in combination with our dedication to sourcing U.S.-based ingredients whenever possible, makes us feel confident in our use of “Made in the USA” on the packaging.

Talk about pet products completely sourced and made in the USA versus those assembled or formulated in the USA but sourced elsewhere.
While the sourcing of items from the U.S. is important and does contribute to high-quality pet products, we find that the importance of sourcing U.S. can vary by ingredients. Some ingredients from abroad are higher quality than ingredients found in the United States. Our bully sticks are sourced and manufactured in South America at a Redbarn-owned plant that we hold to the same quality assurance standards as our Kansas-based facility. Products assembled in the United States are typically subject to higher safety standards.

How likely is the Made in USA trend to continue growing?
We’ve been manufacturing 80 percent of our product line in the United States since 1997. While it takes some time to develop good supply chain and production policies, we believe it’s worth it to provide our customers with safe and high-quality pet products. Based on Redbarn’s customer outreach, we see pet parents becoming increasingly educated and making more informed decisions about what ingredients they choose for their pets. Our research suggests that choosing products that are made in the USA will continue to be a huge selling point for customers.

Amy Schumann, marketing communications for West Paw Design in Bozeman, Mont.

What is your definition of Made in USA?
We manufacture 100 percent of both our pet toys and beds in our own facility in Bozeman, Mont. We are the only pet product brand to do so, and we have a very strong opinion on this question. We employ 75-plus people to design our products, purchase 89 percent of our raw materials from American vendors and then manufacture the both injection molded and sewn products.

We put a lot of effort toward sourcing U.S.-manufactured or U.S.-grown materials for our toys and beds. For example, we’ve been partnering with two family-owned fabric mills for 19 and 12 years and have had a great business relationship that would be impossible [to have] working with someone based overseas.

Talk about pet products completely sourced and made in the USA versus those assembled or formulated in the USA but sourced elsewhere.
Manufacturing products in the U.S. are subject to important regulations such as labor laws including minimum wage, Occupational Safety and Health Administration, U.S. Environmental Protection Agency and other regulatory agencies that ensure employees are treated well, the environment isn’t easily compromised, and that we’re living up to our product and brand promises. The latter part here is very important because it’s much harder to have accurate quality control when you are selling a product in the U.S. that was manufactured in an unknown facility in another part of the world. A pet company’s marketing and sales teams might be U.S.-based, but where the products come from and how and where they’re produced is somewhere completely different.

On another note, I see manufacturing in the U.S. as challenging because the supply chain can often be very restricted. For example, when I started in 1996 I could source a high-pile fabric from six mills, but today I have only two options. This means that not only have we lost some technical capabilities, but also, there isn’t as much demand for innovation from the remaining suppliers.

Also, labor is more expensive in the U.S., so a manufacturer must be very focused on creating products that are able to be made with higher labor rates while also being focused on improving manufacturing through lean manufacturing technology and working with industrial engineers. Thankfully, the U.S. has a great support network of public and private consultants who can help manufacturers grow and be successful over the long term.

Do you see more manufacturers in the pet industry altering their sourcing and manufacturing to acquire the U.S. label?
We definitely see more manufacturers coming back or opening in the U.S., and that’s a great thing. Across all industries, producing your goods in the USA is a positive for various reasons. We’ve all seen the negative effects producing overseas can have—including poor working conditions, high transportation costs, lengthy shipping times, and perhaps most important, less safety controls.

We’ve been manufacturing pet products in Montana for nearly 20 years, and we are so proud to employ people, and [proud of] being a part of their success as they build a family, grow a career or buy a home. These are relationships you don’t have if your manufacturing is all based overseas.

Are more foreign markets requesting U.S.-made pet products?
West Paw Design is sold in more than 30 countries, and we attribute this success to the quality of our products being sought overseas. American craftsmanship has a reputation around the world as being some of the best. We are proud to be a world-class manufacturer that’s able to use American talent, and this definitely resonates with our global consumers.

How likely is the Made in USA trend to continue growing?
After the recession in 2008, we saw manufacturing begin to come back to the U.S. There is a huge consumer appetite for American-made goods, whether that’s for textiles, electronics or pet products. We see this trend growing each year.

Tracey Hatch-Rizzi, vice president and co-founder of Radagast Pet Food in Portland, Ore.

What is your definition of Made in USA?
For pet parents, Made in USA extends beyond products that are just produced in the USA. Consumers want to know where the ingredients for foods are sourced and really want to see that all or most of the ingredients are sourced from the USA, in addition to just being produced here.

Some people might not think the Federal Trade Commission’s standard is good enough. But for companies like mine, where all but one of our ingredients comes from the USA, and our products are made in the USA, we’re fortunate that there is a little bit of flexibility.

For example, the organic psyllium husk powder we use in our products comes from India, because that’s the largest region in the world where psyllium is grown. There is no such thing as psyllium grown in America. But it’s certified organic and is the highest quality psyllium that can be found.

It would be terribly unfortunate for us to have to substitute the organic psyllium with another ingredient to be able to use the Made in USA label. Sometimes ingredients can’t be sourced here, so having a little flexibility in that definition is appropriate.

Talk about pet products completely sourced and made in the USA versus those assembled or formulated in the USA but sourced elsewhere.
Pet parents feel they can trust products that are made from ingredients that are sourced in the U.S. People also really want to support American workers and producers at all levels—from the farmer to the employees that make their food. People want to support the economy and job growth. Buying domestically made products can be a direct way for consumers to participate in that. It’s important for people to be able to feel that connection with the products they buy and the food they feed to their pets.

There seems to be less of a connection and trust level when all or some of that process is outsourced. There is a perception that there is less oversight when products are made outside the USA, which might be true. So many pets have been sickened from products made outside the country or from ingredients sourced from other countries that pet parents feel strongly about feeding products that are manufactured domestically.

A country’s national character and history come into play here. There are some ingredients that can’t be sourced from the U.S., simply because they aren’t grown or available here. Just because ingredients are sourced from the U.S. Doesn’t necessarily make them safer or of a higher quality than those ingredients sourced elsewhere.

Do you see more manufacturers in the pet industry altering their sourcing and manufacturing to acquire the U.S. label?
Consumer confidence and trust is important to every manufacturer. Pet parents want to know where and how ingredients are sourced, and the answers to those questions strongly affect their purchasing decisions. Products with a made in the USA label tend to make people feel more confident that these products were made with tighter quality control and safety guidelines.

There also is a sense of pride when people purchase products that are made in the USA, and manufacturers want people to be proud they are purchasing their products. It’s now a point of distinction for brands to be U.S.-manufactured and use U.S.-sourced ingredients, and many new manufacturers will most certainly make this a priority.

The flip side is that their products will cost more in the end. American-made ingredients and materials often cost more than those purchased abroad, which will affect the price point. This often pushes American-made products into the premium category.

Are more foreign markets requesting U.S.-made pet products?
Consumers in other countries are looking for high-quality, safe pet products, just as we do here in the states. If what they’re looking for isn’t manufactured in their country, then they will look outside their borders.

In many regards, I think the USA is known for having very high standards. We have unique, innovative products that pet parents are looking for, worldwide. I say this more from my experience as a raw food manufacturer, based on emails I receive from around the world, from people looking for high-quality products that they can’t find readily available in their own country.

How likely is the Made in USA trend to continue growing?
There’s a huge consumer demand for products that are made in the U.S. and that use primarily U.S.-sourced ingredients. With this increased consumer demand for USA-made products, I see a greater focus and expansion on these products in all retail channels, from big box to more independent retailers. Many customers are making the shift toward buying locally made products and really want their dollars to support their local communities. Buying USA-made products is another way to keep those dollars local. This is really about supporting American workers and businesses, rather than just getting the best deal.

TailsSpin, Pet Product News’ 2015-2016 Retailer of the Year, weighs in on the Made in the USA issue

Jusak Yang Bernhard and Jeffrey Allen Manley, co-owners of TailsSpin Pet Food & Accessories, which has locations in Georgia

We believe that the Made in the USA label should mean that 100 percent of the contents need to be sourced, produced and manufactured in the USA. That’s what customers currently believe it means.

Manufacturers like Nature’s Logic, boasting that its pet food does not contain synthetic supplements, should be applauded. Maybe using local manufacturers is the answer, as they would be easier to reach, with accountability and trustworthiness.

In the pet food industry, recently, Blue Buffalo Blue Cat Treats and Halo, Purely for Pets cat food have been voluntarily recalled by their manufacturers due to potential manufacturing issues. Dogfoodadvisor.com also has a list of pet product lines that are being recalled.

Recalled food items are being sourced or produced in a variety of countries, including the United States, and overseas such as China and other countries. Popular brands, such as Pedigree, Barkworthies, Stella & Chewy’s, Nutrisca, Bravo and Simply Nourish, are among the list. The country in which an item is produced does not eliminate it from being recalled.

The Federal Trade Commission regulates the Made in USA labeling standards. For a product to be labeled as Made in USA without qualifications or limits on that claim, all or virtually all significant parts and processing that go into the product must be of U.S. origin. If a negligible portion of the product’s total manufacturing costs and ingredients are considered insignificant parts of the final product, it can still be labeled as Made in USA without qualifications or limits on that claim.

A product composed of 60 percent U.S. content also can be labeled as “made in the USA” as long as it states the percentages of U.S. and non-U.S. components. But the size of that additional information in relation to [the statement] “made in the USA” on the label is not regulated. A majority of consumers will still feel that they are buying a genuine USA-made product that has this type of label.

A majority of human supplements are only sourced outside of the U.S. and not produced in this country. The Food and Drug Administration says it does not have sufficient staff to monitor the overseas plants, which produce nearly 80 percent of the pharmaceutical ingredients and nearly 40 percent of the finished prescription drugs consumed in the U.S. For example, according to The Seattle Times, China has captured 90 percent of the vitamin C market in the U.S. Many vitamins are being added in the manufacturing of soft drinks, cosmetics, food and pet food.

So even with the “made in the USA” label on pet food, it becomes almost impossible to know if the food is 100 percent U.S. made. We learned that consumers do not need to be told if a manufacturer changes a food’s recipe or ingredients. Typically consumers will only ask once they notice that their pets are not eating the food [the same way] they used to. Or maybe by chance they happen to compare the ingredient panels on two different bags of the same food. With the wiggle room within the “all or virtually all” requirement regarding labeling, Made in the USA might not mean as much as the consumer thinks it does.

Keeping the jobs in America, boosting the American economy and having control and accountability are major reasons why more and more consumers are seeking products made in the USA. Typically, though, more than half of the customers that ask us for USA-made products will pause for a moment when they notice the price difference. Prices become a big challenge for retailers. At the end of the day, it is tougher to carry, and likewise sell, too many items that customers believe will cost double to four times as much.

Businesses are always watching the bottom line, trying to raise profits and make more money. Ways of cheaper costs will always be explored and maintained. Items with higher profit margins will be sought out. This commonly makes Made in the USA a tough sale based on price alone.

Because of these common human behaviors and emotions, maybe the answers should lie in seeking a health-conscious standard of transparencies among all of the manufacturers. Standards can be implemented for every aspect of establishing a product that can highlight those products that are truly 100 percent USA made.

The labeling process needs to be honest. For example, “lamb (New Zealand), rice (Thailand) and vitamin C (China); bags printed in the USA.” As parents need to be accountable regarding their children’s education, manufacturers need to be accountable regarding their sources of ingredients, and make sure that quality standards are implemented and maintained.

This article originally appeared in the January 2016 issue of Pet Product News.

Source: www.petproductnews.com