Business Essentials: 'Why can't it be that every dog food has its day?'

Lucies Farm uses specially reared cattle to make luxury food for pets, says Kate Hilpern. But supermarkets and distributors aren't biting

"Our biggest headache was deciding what to do with our beautiful herd," says Mr Walsh at Lucies Farm. "But then we had an idea."

Mr Walsh comes originally from Hawaii, where Japanese residents and tourists have eaten a type of meat called Kobe beef for years. Producing it involves massaging the cattle regularly and feeding them a daily diet that includes large amounts of beer. This, he says, produces meat that is extra-ordinarily tender, finely marbled and full flavoured.

So he sought to use his own cattle in this way. "While the beef is a special grade from cattle raised in Kobe, Japan, I saw no reason why I couldn't apply the same process here."

And the idea worked - up to a point. "It is extremely expensive but the demand is high, and we've been doing very well selling it via the internet."

However, because the beef is so costly, people tend to want only the prime cuts. "We are always playing catch-up on fillet and sirloin, and the other perfectly good cuts - like brisket, silverside and rump - go begging," he says. "Eventually, we took them off our website altogether, and my wife, who enjoys cooking for our dogs, started feeding it to them."

That's when his next brainwave struck. "Spoiling pets is huge in the UK and US, and so we did our homework about nutrition and started making luxury Kobe beef dog food. Everything is homegrown - even the calcium comes from eggs that come from the farm."

But now for the second problem. Because the meat has no preservatives, freezing is the best form of storage, and this has presented a big obstacle. "I can't get supermarkets to stock it," says Mr Walsh. "They aren't geared up to put frozen products in the dog aisle and they don't like to put dog things next to non-dog things. What's more, it only has a six-month shelf life, unlike traditional dried dog food."

Even finding a distributor is proving impossible. "Supermarkets want relatively few trucks delivering goods to them, so they like the smaller manufacturers to deal with a bigger distributor. But it's hard to find one interested in a product that doesn't have instant demand. Likewise, it's difficult to get demand if people can't see the product in a store."

The dog food has had some good publicity - a double-page spread in the Evening Standard and a large advertisement on Oxford Street. "In fact, we were 'highly commended' in the Waitrose Small Producers Award last year. But we're still finding it difficult to get our product out there."

Like other dog foods, it can be ordered directly from the manufacturer. But, says Mr Walsh, most people don't have big enough freezers to order in bulk and, because frozen products are expensive to send, it isn't cost-effective to order small amounts. Selling it via pet stores hasn't been successful either. "For one thing, they don't tend to have freezers, and for another, most people don't buy their pet foods from a pet store. That's because they don't visit one very often, whereas they go to supermarkets at least once a week."

www.luciesfarm.co.uk

WHAT THE EXPERTS SAY

Karen Todd, local sourcing manager, Asda

"Our supermarket has an excellent record with local and small suppliers: we have over 1,500 of them and they can deliver direct to a store.

"However, there is not much positive advice I can give. While the product is innovative, it is very difficult to handle and, as Mr Walsh is aware, proven demand has to be there.

"Customers already dislike handling pet food due to its perceived smell - hence the recent development of pouches and the huge growth in dry food. Separate freezers in pet food would be a huge investment which we would find hard to justify.

"Ironically, we are currently trialling frozen baby food in 20 stores, with freezers in the baby department. But this is being funded by the food manufacturer.

"I think most supermarkets would ask the same with frozen dog food if the demand was proven.

"I know Mr Walsh has tried but the best bet is still the specialist pet stores. Pets@Home has done very well with its dried food. Perhaps a product ahead of its time?"

John Greenhough, head of business development, the Chartered Institute of Marketing

"The right product at the right price in the wrong place is doomed to failure. Distribution is a crucial element in the marketing mix, and unless the Walshes take radical measures to address their distribution problems, they will struggle to establish their brand in the pet-food market.

"Although they state that freezing is the best method of preserving the meat, the provision of freezers appears to be a major stumbling block for most retailers. However, Kobe pet food has many unique attributes, and even if it were sold in dried or canned form, it would still stand out from other products in the same category.

"The advantages of using another method of storage, and the consequent improvement in the ability of Lucies Farm to get its products to its customers, may well outweigh the disadvantages of a slight compromise on quality.

"There is little point in trying to sell the perfect product if customers can't buy it."

Stewart Masterton, business adviser, Business Link for London

"Kobe beef is little known for human consumption, let alone for dogs. The issue here is of market education - gaining media exposure for the product and its benefits. The high cost and rarity of the meat would suggest that a careful selection of market sectors and routes to those markets is necessary.

"The Walshes already sell via the website and could include their product here or create a new website. Alternatively, a farm shop would offer the opportunity to explain the product, building a customer base.

"Another option is selling wholesale, both in the UK and other European countries where there is a market for Kobe meat. This would generate a greater volume of sales.

"Choose a wholesaler who has the required food- handling chain, who values the product, and who has the right customers. They should not compromise quality for sales. Shelf life should also be extended and guaranteed.

"The Walshes could consider marketing and selling their product via a brand name synonymous with their target market. Developing a PR and marketing plan is vital in targeting distributors and high-end retailers."