Hey Fluffy. Is It Tasty?

DOGS, CATS DETERMINE WHAT'S ACCEPTABLE AT HEINZ PET FOOD FACTORY

WHEN it comes to pet food, the devil is in the details. Take texture. As many an owner will attest to, cats can be persnickety eaters if their entrees are shredded instead of sliced, or if the cat food company decides to try out a new recipe that, for whatever reason, doesn't make a feline's grade. And where cats' tastes go, their owners are sure to follow.

All of which is a very big deal at the Heinz Pet Food Factory in Terminal Island, a boxy factory filled with some of the best-fed animals in L.A.

It is here, perched on the edge of Fish Harbor, where dogs and cats, not humans, determine whether a particular recipe makes it to supermarket shelves.

Inside the factory is a lab and Kennel containing 160 dogs and 440 cats who get to dine on the latest creations, while technicians weigh, poke and prod them to see whether or not the food is both appetizing and digestible.

"We find out if the animals like the food," said John Heil, chief revenue officer and president of Heinz Specialty Pet Products. "How much do they eat of one formula and how much do they eat of another? How much do they ingest and digest, which are very important things for animal owners to know. Especially for owners of cats, because they are finicky."

This is strictly top-secret stuff; no journalist had ever toured the factory until a request was made by the Business Journal. After a delay of several weeks, Heinz officials consented to the tour -- but only after flying two public relations executives to Los Angeles from the company's Kentucky headquarters, and only on the condition that the animal-testing facility would be off-limits.

Company officials insist that the secrecy is for competitive reasons -- Heinz doesn't want other pet-food makers to know how it tests its animals or what products it is developing.

They say the dogs and cats are well taken care of and get plenty of exercise (reports from several animal groups indicate as much). Each one has a name and an assigned animal care technician. Most of the dogs and cats are born there and spend their entire lives at the facility.

"You could argue that (breeding) is one of the forms of recreation we provide here," joked Larry Hawley, the manager in charge of applied nutrition at Heinz's Tenninal Island factory.

Not to mention eating.

The in-house animals are an integral part of the company's development process, and have helped make Heinz the country's No. 2 manufacturer of pet food under such brands as Cycle, Skippy, Reward, Snausages and 9-Lives.

Very competitive industry

Heinz Pet Food generated $1.2 billion in sales in 1999, making up a little more than 10 percent of parent company H.J. Heinz Co.'s annual revenues. It remains a distant second to Ralston Purina Co., which had $4.72 billion in 1999 sales.

"This is a very competitive industry," Hawley sald. "Pet food is not a high-priced item, and the profit margins are slim. So we have to protect our product."

The factory, which employs nearly 800 people and operates around the clock six days a week, produces 30 million to 35 million cases of pet food a year.

About 40 percent of Heinz's canned pet food is produced at the 4.5-acre Terminal Island site. The building originally was a cannery where StarKist tuna, a division of H.J. Heinz, was packaged for 32 years until the industry left the United States in the 1980s for less expensive locations in American S[grave{a}]moa and Puerto Rico.

Purse seiners used to pull up to the wooden wharf to unload their tuna catch. Today, fishing boats dock to deliver mackerel and sardines used in cat food. Trucks hauling chicken, lamb and beef byproducts arrive almost every day. Grain products are shipped from across the country to be added to the pet-food ingredients.

It is an enormous business, and a fast-growing one. Pet food in 1998 was a nearly $11 billion industry, up from $8.4 billion in 1993.

The reason is that America's pet population shows no signs of slowing down. In the United States, the cat population last year numbered 71 million, compared to 62.4 million in 1991. The dog population last year totaled 58 million, compared to 53.2 million in 1991.

Making the food

The principal item produced at the Terminal Island facility is 9-Lives cat food, which comes in 27 varieties. Images of Morris the Cat go whizzing by on the assembly line, his furry face plastered on the plastic wraps that hold four-can packs together. The 9-Lives brand last year made up 26 percent of the U.S. canned cat-food market, according to a company report.

On another assembly line, chunks of brown dog food tumble into tin cans that are then filled with gravy before being sealed, sterilized, labeled and packed. Skippy, Reward and Nature's Recipe dog food are canned here as well as O1' Roy, a brand sold at Wal-Mart, and Can-O, a product distributed in Mexico.

Steam rises from large stainless-steel vats whose contents look like pureed stew. The odor is everywhere. "We've gotten used to the smell," explained Larry Burke, the general manager of manufacturing, as he walked around the plant.

Burke and the other workers at the Heinz plant face a dual challenge: It's not enough to produce food that's appealing to pets, you also have to target their owners.

"Consumers buy for many reasons, from the cost of the product, to new products on the market, to packaging, which plays a big role," said Heinz spokesman Michael Mullen. "Or pet owners will switch products as the animals' dietary needs change."

But all that is for the marketing department. Here, the main concern is creating food that pets will find appetizing.

One of Heinz's secrets for attracting more customers is its particular way of "forming" its food, meaning it has a certain texture that cats and dogs like. There is shredded cat food that has been sliced in a way that is supposedly appealing to cats, and dog food configured into large chunks.

Cats are more particular about their meals than dogs. "Cats are much more brand loyal than dogs," Mullen said.

The R&D side

The process for developing a new pet food can take from one to three years. It all starts with consumer research and identifying unmet needs. Right now, for example, dog and cat treats make up a growing share of the U.S. pet-food market.

Once a market niche like that is identified, the 50 veterinarians, nutritionists and food scientists at Heinz's 25,000-square-foot animal care facility on Terminal Island start tinkering with ideas to develop a prototype. If there is a competitor already in the market, Heinz looks at the competing product's strengths, weaknesses and price point.

Once a prototype is developed, it is tested on animals at the facility and compared to tests on products already on the market. Researchers take blood samples and check fecal matter to better read the nutritional value of the new pet product and its competing product.

After some fine-tuning, a research firm will mail out the prototype to test homes, where consumers have their pets sample the product. The owners fill out questionnaires and describe the animals' responses.

After that, a marketing test is set up in three or four states. If successful, the product is launched nationwide, using promotional coupons and advertising to attract customers. If a pet product doesn't test well in the first six months, it is usually pulled from supermarket shelves.

Heinz officials remember developing one product, named Rawhide, they were certain would be a hit among pet owners. This dog treat was launched in late 1997 and died 90 days later. Mullen said Rawhide didn't succeed for a number of reasons that boiled down to consumers not being attracted by the packaging and the cost.

Also, dogs didn't like the taste.