Why company is spending $88 million on a new center in Thompson’s Station
February 15, 2013
The Tennessean
By Walker Moskop
During the past two years, there’s been a lot of fanfare surrounding the $88 million regional innovation center being built in Thompson’s Station by pet food giant Mars Petcare.
But throughout the process, very little discussion addressed two burning questions: What exactly takes place at a pet food innovation center? And what about the pet food industry is so competitive that a company would spend nearly $100 million to build one?
Mars Petcare U.S., headquartered in Franklin, has 15 manufacturing facilities dispersed across the country. Having a single facility where all of its pet food products can be researched will allow it to create, test and scale new products more quickly, said Jennifer Aspen, the company’s vice president of research and development.
In addition to having the technological capacity to research and produce a range of new products, the center, Aspen said, “is going to be like the Ritz-Carlton for pets.”
The Thompson’s Station site will be the company’s fifth innovation center, and its only one in the U.S. The state and Williamson County agreed to issue a $10 million construction grant and a $2.2 million tax break, respectively, to the pet food giant, which said it would create 144 new jobs at the center. The company plans to eventually move its headquarters to the site.
During a recent tour of the 90-acre site, the ground was muddy and the construction still had a long way to go, but it was clear that, yes, even the buildings where dogs are housed would make today’s cubicle-dwellers jealous.
Housing, feeding and socialization
The campus, which is expected to be completed in spring 2014, will include four buildings containing pet food labs, office space and a product development center, as well as a 28,000-square-foot health and nutrition center, which will include housing for pets involved in feeding trials, “socialization rooms” where animals can play, and seven large circular dog pods with high ceilings and natural light pouring in from every angle.
The campus will hold up to 180 dogs and 120 cats.
Pet food is regulated by the U.S. Food and Drug Administration, and Aspen said the company goes “above and beyond any government regulations” for animal safety. Pets are given up for adoption once they’re no longer needed for research purposes.
Market share gains
Mars, whose brands include Pedigree and Whiskas, is the global pet food leader and ranks second in U.S. sales to Nestle Purina. When it last disclosed revenue figures in 2010, its sales were roughly $12 billion. While its U.S. sales lag far behind Nestle’s, Mars has gained market share in recent years (in part through acquisitions), and accounted for 17 percent of the American market in 2010, up from 12 percent in 2006, according to the market research firm Packaged Facts.
As pet owners know, the cuisine options available in stores have exploded in recent years.
Owners have increasingly humanized their pets, and companies have been selling them increasingly specialized, humanlike food. Store shelves are now stocked with everything from gourmet breakfast meals to hypoallergenic treats to food designed for weight loss.
As options have grown, so, too, have sales. In tough economic times, pet food has proved to be a resilient industry, one in which consumers spent more than $20 billion in the U.S. in 2012, according to a projection from Packaged Facts.
Sixty-two percent of households now have pets, and pet food companies are spending heavily to reach them, through advertising and by developing new products.
Sources of ideas
Being able to design test multiple products at once, in the same location, will be a big advantage, said Jarrod Kersey, the company’s director of health sciences and regulatory affairs.
When creating a new item, Kersey said, the idea generation process can start from a variety of places, from academic journal articles to research from another Mars facility to observations gleaned from pets’ electronic medical records.
The insight could be as simple as noting that some dog owners do a poor job when it comes to addressing oral care. Enter DentaStix, an X-shape treat that helps fight gum disease. Before DentaStix was able to enter the market, many questions had to be addressed. Do dogs like the taste? What nutrients should go into it? Does it actually reduce tartar buildup? How does it affect digestion? (“Back-end performance,” as most pet owners can attest, is an important part of the research.)
Other Mars research has been focused on creating foods to help with pet obesity (1 in 5 dogs and cats are obese in the U.S.), as well as taking a closer look at nutrition for smaller dogs, which are becoming more popular.
Key observations
Not all research is centered on product testing. At a Mars innovation center in England, for instance, researchers are looking at whether small dogs are, in fact, naturally fussy, or if their owners make them fussy.
Mars employs trained behaviorists to observe its on-site pets, and will be hiring handlers to look after pets and take note of everything from an animal’s energy levels to how much it sheds.
“The reason we’ll have so many handlers here is because observations are really, really critical in the type of research we do,” Aspen said.