Blue Buffalo Thinks You Are An Idiot

Let me say it simple: The folks who make Blue Buffalo think you are an idiot, and if you are buying their dog food, you are proving them right.

Over at Business Week they profile this factory of liars, charlatans and bunko peddlers, noting that the founder, William Bishop, was an ad man who made his fortune peddling crap food to gullible low-information consumers.

Bishop saw parallels to sweetened beverages: high margins and low barriers to entry. “You can get into the market small with contract manufacturers making the stuff,” he says, displaying an easy candor. “Slap on a good label, come up with a slogan, and off you go,” he says. “There were already a lot of smoke and mirrors in how pet food was advertised, and that was the sort of stuff we were good at.”

He commissioned a local holistic veterinarian to design recipes. “The top ingredients are meat, vegetables, fruit, whole grains—expensive stuff equal to whatever Wellness and Eukanuba (PG) have,” he says, referring to other premium brands. “Then we add the extra supplement in LifeSource Bits,” nuggets advertised as providing kelp, blueberries, and other ingredients “rich in antioxidants.”

Blue Buffalo commissioned consumer research and discovered that pet owners have strong ideas of what they don’t want their animals eating—above all, anything called a byproduct. Consumers just don’t like the sound of “byproduct,” says Bishop.

Joseph Wakshlag, a nutritionist on the faculty at Cornell University’s College of Veterinary Medicine, recalls becoming aware of Blue Buffalo in 2005 when he worked at a vet’s office in Woodbury, Conn.: “They had salespeople who paid for ‘lunch and learn’ sessions where they talked about the owner’s dog, Blue, who had died of cancer, and now they had a new dog food that prevented cancer. I asked for the data, some evidence. They said, ‘Look, it has blueberries.’ There was no data.” Wakshlag, who since has done paid consulting for Purina, says he doesn’t “think Blue Buffalo is necessarily worse than other brands, but there’s no real evidence it’s any better.” (Bishop speculates that Wakshlag “misinterpreted” the sales pitch. “We have never claimed the product prevents cancer.”)

Many pet owners considering healthier fare for their animals turn to vets for advice. With at least some of the experts skeptical of its health claims, Blue Buffalo didn’t take off immediately. So Bishop hired a staff of in-store representatives to sidle up to customers overwhelmed by the profusion of natural brands and steer them toward the Buff. PetSmart (PETM), a national discount chain, went along with the strategy, in part because Blue Buffalo offered retailers relatively high margins. The new brand began to break through.

Customers who do convert to the Buff pay more. While prices vary from store to store, one comparison cited in court papers shows that Purina One Smartblend Chicken & Rice Formula retails for $39.99 for a 31 pound bag, or $1.29 per pound. A slightly smaller bag of Blue Buffalo’s comparable Life Protection Formula Chicken & Brown Rice Recipe goes for $59.00, or $1.97 per pound. “Whatever the brand,” says UC Davis’s Larsen, “consumers seem willing to pay more for pet food that’s natural and special, because, I think, it makes them feel good about themselves.”

In March 2014, at the conclusion of an elaborate proceeding during which Blue Buffalo had the chance to defend itself, the NAD issued a detailed ruling concluding that Bishop’s company “has not provided any evidence that ‘big name’ pet food manufacturers … are actively concealing the truth about the ingredients in their products.” The NAD recommended that Blue Buffalo correct its TV ads to remove unsubstantiated references to competitors and amend website claims generated by its “True Blue Test.” Bishop says his company is appealing the NAD decision. A spokesman for Hill’s declined to comment.

Whether or not Blue Buffalo’s claims about avoiding ground-up chicken intestines and feet are false, there’s actually nothing wrong with such ingredients, says Kurt Venator, a Ph.D. vet employed by Purina. “Included in a balanced diet,” he adds, “byproducts are actually an excellent source of nutrition for pets”—a point reinforced by the NAD decision in March that scolded Blue Buffalo.

So what's the latest? The latest is that the NAD -- the National Advertising Division, an investigative arm of the ad industry’s self-regulating body -- has recommended that Blue Buffalo modify certain ads asserting that larger competitors were “fooling” customers about ingredients. In short, NAD has told Blue Buffalo to STOP LYING.

But, of course, without lies, Blue Buffalo has nothing.  But nothing may look good compared to what may be coming. Purina has sued Blue Buffalo under the Lanham Act, and the fines are likely to be substantial if Blue Buffalo loses, as I think is likely.