Chain reaction

Again, recently, the petfood industry faced – at least in certain parts of the world – massive recalls, maybe unprecedented in the history of the industry. A lot of debate breaks out again with the aim to try and solve "the problem" for good. Solutions brought to the table range from new committees, new regulations, additional ....... etc! It looks as if the industry puts the blame of the disaster outside of its own court; but is this justified? Guided by some introspection the industry might come to the conclusion that it is not.

The chain reaction probably starts with somebody deciding what the end-buyer is prepared to pay for a product; whereas exhaustive consumer-research clearly indicates that price is not the key decisive factor for choice. Provided that the end-buyer perceives an added value relevant to her/him. Do 2 dollar-cents therefore really make the difference?

Because the distributive trade is increasingly more demanding regarding margins, while offering less added value, (stockbrokers' analysts are watching over their shoulders), manufacturers are forced into a situation of extreme cost-diligence; they also have their stockbrokers' analysts who need to say some wise things each quarter. And, because manufacturers also outsource, where can they put the burden of cost? Exactly!

Bonus-schemes and careers dictate that the performance of companies must be better than the previous year; so, taking market-circumstances into account would therefore evidently be a silly thing to do. In a situation of – probably structurally – rising ingredient prices where can the compensation be found? Upstream?

Without wishing to imply that this has been the case with the more recent recalls, I ask myself this: "is the industry prepared to sacrifice the love for the animals - to which everybody in the industry pays at least lip-service - for just that little bit of extra profit?" If so, we need only wait for the next disaster to hit us; it's consequence being diminishing consumer-confidence in industrially prepared petfoods: our business!

If players in the industry are prepared to shoot themselves in the foot for the sake of the quick buck, they will then have lost the right to complain about being crippled.

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