Innova Dog Food News
Procter & Gamble buys Natura!?
The giant that owns Iams and Eukanuba buys the Co that makes Innova & Evo!
Will P&G turn some of the best commercial dog food out there to mass-market crap?
OR – will they use their corporate/marketing might to make these brands more visible and popular to the masses?
Will Innova/EVO be sold in supermarkets?
HMMMMMM……..
http://news.cincinnati.com/article/20100505/BIZ01/305050006/P&G+buys+Calif.+pet+food+company
well i’d wait until seeing changes to the ingredient list before saying Innova/EVO is going to the ‘bottom of the barrel’
If they don’t significantly alter the ingredients, their scalability may enable them to offer the product at a lower price.
I don’t feel good about it, but I analyze this as follows:
1. I’m sure some numbers can be found on ‘net if I bothered looking, but an educated guess tells me it’s the fastest growing segment in the industry. The health trend is stamped all over the grocery segment for human food – why should dog food be any different, since we’re talking about same consumer group? In fact it’s probably growing faster than most segments in which P&G competes, since this segment is relatively new, while P&G mainline businesses are mature.
2. Margins are clearly solid, given what I pay for Innova.
3. Large companies typically grow by acquistion since organic growth is limited. They’re always on the lookout high growth, high margin businesses.
4. Natura has clearly built brand equity over the years, i.e. they’ve successfully positioned themselves as a premium, healthy brand. It’d take years for P&G to build this on their own in this segment.
5. As one person pointed out, P&G can create synergy through distribution, marketing and potentially purchasing. Whether Innova ends up in the supermarket, who cares really? Large grocers like Safeway are selling lots of human food that previously you could only find at Whole Foods or some such. Are you likely to find Innova at Walmart? Unlikely since that’s not the target demographic. You don’t find True Religion jeans at Walmart either.
5. It doesn’t pay for P&G to change the formula or really anything Natura does, other than the few things I mentioned. If they did, they’d quickly destroy the brand equity they’re already likely paying a premium for and that’d be self-defeating. I bet they keep a lot of the Natura processes and management team in place.
Anyway, like I said, I don’t love this, but wouldn’t switch from Innova for this reason alone.