The industry has had a successful first half of the year by most accounts. The publicly traded companies are reporting significant growth in sales and margins, and the veterinarian customers appear to be back in a buying mode as they worry less about the economy and get back to focusing on growing their businesses. I’m not saying doubts don’t exist about where we are headed. Certainly rising deficits, taxes, and the effects of the new healthcare bill have tempered our collective attitudes on the recovery and muted our growth coming out of this recession. But the overall mood is positive.

A big part of the industry’s focus thus far in 2010 has been on the flea and tick category of products. At $600 million, it is a huge part of this business, and it has been in turmoil. Companies with long standing relationships with distribution have also gone OTC, while contracts that were traditionally exclusive have become nonexclusive. In addition, new players continue to make their presence felt with twists on their products and services. Therefore, one of the big questions heading into 2010 was how this would all play out. To date, the answer is quite well.
Distributors appear to have successfully navigated the transition. While nobody is ready to call winners and losers at any level, the changes have helped the distribution community, and seemingly many of the flea and tick manufacturers as well. Distributors have found the change to be less confusing than they might have imagined back in January. And by broadening their offering to their customers, they have been able to capture more of their customer’s business. Manufacturers who have a great story to tell and back it up with a great product and service have naturally drawn distributor support and are seeing their business grow.

Perhaps most importantly, distributors have underlined their value to manufacturers in this transition. They have proven that with their sales ability, effort and focus, they can protect – and even increase – market share. That is the best way to strengthen manufacturer relationships over the long term and protect one of a key category of products. Since they no longer can hit their competition over the head with an exclusive product the other might not have, they have gone back to selling their value. Healthy activities for sure.