ökocat Natural Cat Litter: How Healthy Pet Created a Playful New Brand August, 2014

2 Background 36% of all U.S. households own a cat 53% of cat owners own 2 or more cats Total of 74 million pet cats in the U.S. Cat litter = $1.7 Billion market, growing 4% a year World’s Best is natural litter brand leader (1)(Mintel, March (2) (1)(Jan 2014, Packaged Facts)  Cat owners are an attractive market.  Healthy Pet identified natural cat litter as a potential opportunity for brand development.

3 Capitalizing on the Natural Litter Opportunity Healthy Pet used series of consumer research studies over a one year period to develop a brand to leverage its opportunity in natural cat litter. Product Concept Test Category attitudes and product use Cat owner segmentation Concept appeal vs. World’s Best Positioning Exploration Key benefits Corporate names and positioning Subbrand positioning Naming Packaging Refinement Message priorities Brand design Line Optimization Optimal number of SKU’s Optimal assortment June December February June Launch November Assess Market Size and Profile Target Ensure Corporate Brand and Subbrand Appeal Communicate Brand Benefits Address Segment Specific Needs

4 Key Learning: Category Attitudes and Usage Cat Litter User Segments Buys Only Clay Litter 78% Buys Natural* Litter Occasionally 15% Buys Only Natural Litter 7%  22% of cat owners use natural litter at least some of the time  Natural cat litter users are different: –More likely to own kittens and long hair cats –More likely to purchase wet cat food –Have more litter boxes, and scoop and change them more frequently –Prioritize natural and biodegradable over long lasting odor control –Spend one-third to two times more on litter than clay-only users

5 Key Learning: Product Appeal  Healthy Pet (Wood and Paper) outperforms the natural litter leader, World’s Best, on top box trial interest based on written concepts.  Interest is strongest among Natural Litter Users, but also surprisingly high among Clay-only users. Top Box Trial Interest Clay-only Users Occasional Natural Users Natural – only Users Healthy Pet - Wood 37%54%57% Healthy Pet - Paper 35%70%55% World’s Best (Control) 31%55%48% Healthy Pet Product Concept (Wood)

6 Positioning and Names Positionings Tested Your Cat Deserves the Very Best Healthy/ Active More Love and Affection We surveyed a total of 2,569 cat owners  35% of all cat owners are Healthy Pet Concept Acceptors (top box) regardless of positioning.  Clay-Only Users represent 70% of total Concept Acceptors, confirming an opportunity to grow the natural segment.  All cat owners say they strongly prefer the NaturalCat name over WonderCat because it is more descriptive.  Cat owners preferring WonderCat say it is more ‘fun.’ Preferred by Clay- only users

 Focus groups find all three package designs are appealing and different from other brands. They are described as ‘modern’ and ‘eye-catching.’ The most memorable design elements are the leaping cat and the color blue.  There is no clear winning name for the scent. Scent name should include ‘Natural.’  ‘Clumping’ and ‘7-day odor control’ drive appeal. 7 Packaging Refinement Packages Tested B is preferred overall, and especially by Natural litter users. Best at communicating odor control E is preferred by Clay-only users. Best at communicating wood base. G is well-liked but some think it looks like a box of cereal.

 ö kocat selected as final name based on its playfulness and ownability.  Final package design features refined based on focus group learning. 8 Final Brand Name and Design Clear Features Strong call-out for clumping and other performance features. ✔ Wood Grain The wood grain along the bottom helps reinforce the idea that the litter is 100% wood. Respondents are split on whether they want to see an image of the actual litter. ✔ Large Icons Large enough to communicate the most important information effectively. ✔ Cat Logo Strong cat imagery gives a clean, modern look. ✔

 TURF analysis suggests optimal line has 3-4 SKU’s.  SKU’s with the greatest purchase consideration ratings (top two box, 7-pt scale) are: –Natural Wood Scented (Clumping): 55% –Natural Wood Unscented (Clumping): 51% –Natural Wood Multi-Cat (Clumping): 48%  More than half say they are willing to pay more for ‘100% Recycled Packaging’. 9 Line Optimization Diminishing returns for more than 4 SKU’s

 ö kocat launches June 2014 with distribution on Amazon, Walmart, Petsmart, and more. 10 Launch

 $2 million marketing campaign will be launched September 2014 with messaging informed by research insights. 11 Marketing Campaign Rufus: “It’s bad enough we have to do our business in a tiny box in the closet as if it was something shameful. The least you could do is get us Ökocat litter from Healthy Pet. It’s made from all-natural plant fibers with no chemical additives.” Irreverent campaign features Rufus, a cat dressed as a human, to present the ‘user’s perspective’ on cat box odor and additives. Campaign Executed via a series of online videos designed to run on okocat.com web site and as pre-roll on websites like BuzzFeed, SheKnows and YouTube. okocat.com 3 minute video 15 second video “We wanted to break the mold and do something that would entertain people, content that people actually want to consume” – Adam Kleinberg, CEO Okocat agency, Traction

 Collaboration between the brand, design, advertising and insights teams is key to effective product and brand development.  Working together with the brand team at Healthy Pet, the design (Polan+Waski), advertising (Traction) and insights (Brand Amplitude) teams were able to efficiently develop and leverage insights about:Polan+WaskiTractionBrand Amplitude –Targeting –Product features and claims –Positioning and messaging –Package decisions –Naming decisions –Line optimization –Messaging 12 Key Takeaways

13 The Last Word “Healthy Pet® brand is defined by a new and uniquely comprehensive approach to pet products built on three fundamental elements; Active, Happy and Natural. Partnering with Brand Amplitude, we were able to fully understand the opportunity represented by the natural fiber cat litter market. Our partnerships with Traction and Waski+Polan, leveraging insights about cats and their owners, was key to bringing our brand to life. Product development and brand development and were done in parallel with research helping to inform decisions every step of the way. Our success here provides a model for future efforts.” Sam Cohen VP, Sales and Marketing Healthy-Pet

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