Pet retailer Petco has pledged to stop selling all dog and cat food items containing artificial colors, flavors and preservatives by May, throwing out millions in annual sales in the process.
The decision, spearheaded by new CEO Ron Coughlin, is indicative of a broader commitment to pet health, and is meant to push the privately held business back in front of pet owners who treat — and feed — their animals as members of the family.
"As we set our future strategy, nutrition was a big part of it. We looked each other in the eyes and said, 'How do we make sure that we're actually leading and doing the right thing for pets?' " Coughlin said. "The elimination of artificial [ingredients] was a big part of that. We knew that in the short-term we might have a little bit of business risk, but we felt it was the right thing to do."
Starting in January, Petco will discontinue dog and cat food and treats containing any one of more than 50 artificial ingredients, including dyes and chemical substances.
The list extends to substances that add color or flavor to foods through artificial means, and chemical preservatives that slow food spoilage, deterioration or discoloration.
Brands affected by the decision include well-known names such as Pedigree and Cat Chow, though the pet retailer is working with suppliers to encourage them to switch to natural ingredients.
Petco said it expects to complete its food overhaul by May 2019 with the exception of titanium dioxide in Pro Plan and Science Diet Urinary formulas for cats. The company said there is no suitable, artificial-free formula for the health problem, which 10 percent of cats have.
Currently, products containing the soon-to-be banned ingredients account for only a "single digit" percentage of total sales, Coughlin said.
"We've already started weaning people off those [products and moving them] to natural products," he said.
Still, the business will take a substantial hit, estimated at as much as $100 million a year.
It's a risky move that comes during a period of upheaval for the brand, which unexpectedly switched chief executives in June. The former CEO served less than two years.
Coughlin has conducted more than 90 store visits across the nation and started a weekly staff update in an effort to improve Petco's internal culture. The company, which operates around 1,500 stores and employs 25,000 people, has also been working to improve its operational and supply-chain efficiencies. It has been slower than peers and category newcomers to embrace e-commerce sales.
Valued at $4.6 billion in 2015 when it was purchased by a private-equity firm, Petco is also looking to branch out beyond the U.S., where most of its stores are based, and increase its retail business in Mexico and Canada.
