Wagg Foods makes a fifth of the UK's dogfood and sales are up 26%. No wonder its sales and marketing director is partial to a nibble, says Nick Hughes
It takes a dedicated salesman to prove the tastiness of his dog gravy by eating it in front of a buyer. Fortunately for Wagg Foods, sales and marketing director Tom Page is prepared to go beyond the call of duty to ensure Wagg competes on supermarket shelves with the likes of Pedigree and Winalot.
Wagg Foods burst into the petfood top 20 chart in The Grocer's 2009 Grocer Top Products survey last month, having grown its annual sales 26% to £17.9m. And it has bold ambitions to extend the reach of the brand both at home and abroad.
Page believes Wagg's positioning at the value end of the dry dogfood category has helped it pick up share from rivals with higher price points. "Selling value products in a recession is where you want to be," he says. "There's been a lot of trading down from mid-market into value and a lot of the consumers who have traded down have turned to Wagg products."
The family-owned company, which produces a range of dry dogfood and other petfoods as well as own-label lines for almost all the major multiples, already makes one in every five kilos of dry dogfood sold in the UK. Page believes its television advertising debut on ITV1 in the middle of next month will further increase penetration. "We're taking a big step by going on TV," he admits. "It's an unusual step for a value brand, but it's our way of saying: 'we're here to stay and we're going to invest in our brand'."
Page estimates that if growth continues at its present rate, Wagg's current production capacity will be sufficient until 2011, when the company will have to consider expanding beyond its current single factory in Thirsk, North Yorkshire.
"The scary thing for a company our size is when the numbers suddenly start getting quite big," says Page. "We'll need to invest an eight-figure sum over the next few years to keep up with capacity."
Some of the additional volume will come from overseas. Wagg is well established in Ireland, which Page describes as "an easy win", but the private label-dominated Western European market will be harder to crack, he admits. A more realistic target is Eastern and Southern Europe, where Wagg has already secured regular distribution contracts in a dozen countries. Another potential growth area is Wagg's Harringtons brand, launched in May 2008 as a mid-market alternative to the regular value proposition.
Page admits to being something of a sceptic about upmarket petfoods. As he observes: "A dog and a cat can't say whether it's crap or good." Yet the development of Harringtons proved an eyeopener for Wagg. "When we launched Harringtons, we were very surprised at the production cost compared with Wagg. It exploded the myth that the price was all in the marketing."
Page claims Harringtons is performing strongly in independents. But where the multiples are concerned, the future is all about Wagg. And while dogfood accounts for the bulk of Wagg's sales, Page believes there is great potential to grow its range of small animal feeds, which currently includes hamster, rabbit and gerbil products. In case buyers are sceptical, Page is already working up an appetite for hamster food to convince them.
Top Products 2009: Petcare (19 December 2009)
My Alternative CV: Tom Page (14 November 2009)