FILLER'S THE NAME, ODOR'S THE GAME Cat litter is a $350 million industry where the consumer never buys the product but always lets you know if he doesn't like the brand you've brought home.
By Penny Ward Moser REPORTER ASSOCIATE Edward Prewitt

(FORTUNE Magazine) – BUSINESSES are born under most unlikely circumstances. Forty years ago on a cold January day in Cassopolis, Michigan, Kay Draper's sandpile froze solid. As a result, she had to fill the cat's box with ashes, but the pet began tracking black smudges through the house. So Mrs. Draper scurried over to Ed Lowe for some sawdust. At 27, Lowe was just back from the war and struggling to keep his father's coal, ice, sawdust, and we-haul-anything business on its feet. In the trunk of his '43 Chevy coupe was some granulated dried mineral clay that he'd been trying, without much success, to sell to chicken farmers as nesting material. ''Try this,'' he said, pouring some of the absorbent clay in a paper bag and sending Mrs. Draper on her way. Soon she was back for more little bags. So were her friends. Lowe, tickled by the chance to make a few cents, decided to take a flier. He filled ten brown paper bags with clay, picked up a grease pencil, wrote two words on each bag, and took off down the road in his Chevy. Those words were KITTY LITTER. Today Ed Lowe owns 13 homes (28 kitchens, and 19 fireplaces), 3,000 acres of land, an elegant yacht, a stable of quarter horses, and his own railroad. He also owns Edward Lowe Industries, the Indiana-based leader in the $350- million-a-year cat box filler industry. Sales of Lowe's Tidy Cat 3 and Kitty Litter brands were about $110 million last year. ''This is a recession- proof business,'' he exults. ''People will go without a lot of things before they'll go without their cats. And they're not going to have cats without litter.'' Whether they want to or not, 27 million American households -- 30% of the total -- own at least one cat. Three years ago the cat dethroned the dog as the most popular American pet, and now felines outnumber their canine adversaries 58 million to 49 million. Changing lifestyles -- smaller families, no one at home during the day, and that home more likely to be a condominium -- helped the cat become top dog. The so-called cat box filler industry played its part too, by helping tabbies and toms rise above their biggest drawback as house pets. Says Lowe: ''It used to be you'd walk into a house, go sniff- sniff, and know they have a cat.'' Adds William Moll, research and development vice president at Oil-Dri Corp., a Chicago-based clay producer and litter manufacturer: ''Time was when you wouldn't want to visit anybody with a cat in August.'' The problem was odor. The 1,800 workers in the cat litter industry owe their $45 million in annual salary and benefits to the fact that cats, being desert- adapted animals that concentrate their urine, produce among the foulest waste products in nature. Behind the cat's quick rise to the status of the nation's favorite pet, according to Moll, was the ability of manufacturers to come up with a filler that could dissipate a powerfully unpleasant smell. Says he: ''Cat litter has done for the cat what air conditioning did for Houston.'' Because of what the industry trade association calls ''tremendous growth and increased litter awareness,'' American consumers select from some 75 brands of litter box fillers and heft home 1.3 million tons -- 245 million bags -- a year. The industry has grown 10% annually over the past five years. So you see them, America's cat-owning purchasing agents, pacing along the grocery shelf, trying to make a decision. A supermarket may carry as many as a dozen different brands, in seven-pound to 50-pound bags, ranging from 14 cents to 26 cents a pound. Do you want litter with Sanatac? Green Gard? Healthguard? A nice woodsy scent or baby powder? A pressure- or moisture-activated material? Clay from the Mississippi Valley embayment, the Florida-Georgia rift, or California mountains? The battle for the grocery shelf, and the hand that empties it, has never been so fierce. ''When I sold my first bag of litter in 1947, I had 100% of the market,'' says Lowe. ''Today I have only 30% of the pie, and you'd better believe I'm going after the rest of it.'' How? ''By making the best product better,'' he says. Like all the other litter barons, Lowe is fighting his battle for market share first in research and development laboratories. There, armed with such sophisticated instruments as gas chromatographers, white-coated scientists evaluate the competition and toil to improve their products. Then comes the marketing. Focus groups of feline fanciers talk about what they think -- and what they think Kitty thinks -- about a product. Some human testers even sniff soiled litter. Distributors angle endlessly for shelf position in the grocery stores, while advertising agencies dream up tough- talking product pitches or maybe just cuter cats for the label. Last year about $10 million in litter ads hit the nation's print media and airwaves. On Capitol Hill the cat litter industry lobbyist -- yes, there is one: Steven Hellem of the Sorptive Mineral Institute -- jokes, ''This was, for a time, a Rodney Dangerfield business -- we didn't get no respect. But today our technical sophistication and success in the marketplace have shown us to be a classy bunch.'' MORE THAN A DOZEN small companies produce or market cat litter, but the industry is dominated by three major players. Lowe Industries' Kitty Litter and Tidy Cat 3 brands constitute just under a third of the market by dollar volume. Clorox Co., which in a venture with Oil-Dri makes Fresh Step and Litter Green, is next with about 14% of the market, and Excel-Mineral, the maker of Jonny Cat and other brands, has 10%. Most cat box fillers are made from fuller's earth, a crystalline clay mineral that has been used by man for about 7,000 years -- longer than any mineral except flint. Cat litter clays are kissing cousins to kaolin, the absorbent diarrhea remedy found in Kaopectate. ''I myself wouldn't say cat litter will cure diarrhea,'' says Oil-Dri's Bill Moll. ''But if I were in Mexico and it was all I had, I'd go for it.'' The commercial history of fuller's earth dates back to the days when the Roman emperor Hadrian ruled the British Isles, a time of much wool gathering but lousy detergent. In order to pull the smelly lanolin from wool, fullers mixed a barrel of wool with highly absorbent clay minerals, which extracted the lanolin and then were rinsed from the fibers. Nature didn't put fuller's earth just anywhere, and she certainly didn't put it anywhere recently. The biggest and best deposit in this country traces back about 225 million years when Africa pulled away from the Florida-Georgia coast, leaving behind a rift filled with the fine minerals of rare purity that all these years later remain highly porous. Another deposit is located in the Temblor Range of central California, known as the ''Jonny Cat hills.'' Excel has its mine there. Litter is strip or open-pit mined. At the Oil-Dri mine in Ochlocknee, Georgia -- which is spelled three different ways on the water tower, town hall, and post office -- mine chief Wayne Bennett was recently standing 80 feet down in a 12-acre hole, assessing the absorbency of the clay. ''Not all clay works. It has to be just right,'' he says. To demonstrate the desired properties, he picks up a chunk of the gray or blue substance, puts it to his tongue, and invites a visitor to do the same. It sticks tight, pulling all the moisture from the tongue's surface and attaching itself firmly in search of more. You have to tug it off. ''Just like sticking your tongue on the pump handle in winter,'' Bennett says. ''This clay is just right.'' Taking in the good clay are a pair of giant excavators that make the people and trucks around them seem Lilliputian. A single clump, 3 1/2 tons of future Fresh Step cat box filler, slams the dump truck six inches down on its axles. Six more clumps and the truck races up toward the plant. There the clay is ground to precise tolerances and dried and sterilized at more than 600 degrees in tumbling ovens the size of boxcars. The lighter, drier granules are screened to eliminate dust from grinding. But the dust isn't wasted. Oil-Dri is looking into selling it as an ingredient in pricey makeup bases and tightening masks for the human pelt you love to touch. The litter winds up in coated paper bags that march like soldiers, more than 20 million a month strong, through plants across the land. Originally the weighty little bags didn't venture far from the manufacturing source, but today several are marketed throughout the country. Oil-Dri exports to Israel and Japan, where Cat's Pride becomes Proud Cat, though Dick Jaffee, the president of Oil-Dri, notes, ''It doesn't make much of a dent in the trade imbalance.'' NEVER UNDERESTIMATE the power of the paw, times 58 million. Though the cat doesn't buy the stuff, if your puss doesn't like the filler you bought, he won't use it. Trying to win the heart, or at least the front paws, of the ultimate consumer, Lowe Industries employs 125 cats (and six rabbits, since pet bunnies use litter too) as professional eliminators, plus a full-time animal behavior specialist to observe and record the animals' litter box preferences. On the night shift the observer is assisted by a video camera activated by a motion detector -- the same system used to catch bank robbers -- trained on the litter box. When a cat approaches, the sensor starts the camera, so that the next morning the observer can play back the tapes to analyze each cat's overnight needs. ''When a cat sticks its paw into a litter box,'' says Peter Borchelt, a New York pet psychologist who deals with litter box rejection syndrome, ''it is investigating the medium. The tactile and olfactory responses are carefully measured. If he doesn't like the litter -- look out, rug.''

At her office in Goleta, California, Excel-Mineral's chief executive, Betty Stephens, the indefatigable wife of the semiretired founder, hears a lot about stained rugs. Her Jonny Cat fan mail is often crisis-related. Take the letter from Klamath Falls, Oregon, where a cat owner tried to save a few cents by switching to a low-end brand of litter. When the cat began using the whole house as its box, the owner thought the animal was going mad. She realized it was a case of brand loyalty when she found the cat squatting happily over a hole he had gnawed in an old bag of Jonny Cat. ''Litter makes for tricky marketing,'' says Excel executive vice president Bill Jones. ''We've always got to factor in that we're dealing with two consumers -- and the ultimate consumer is not the buyer. So we have to go out there and hook the human, please the cat, and keep them both loyal to the brand.'' But humans and cats, as anyone who ever opened a can of Puss 'n Boots knows, have very different ideas about what smells good. Your nose might love Fresh Step's mint-herbal, paw-pressure- and moisture-activated, magical secret ingredient. On the other hand, you might hate the smell, while the cat will settle for nothing less. All litter aims to make what a cat does in its box as inoffensive as possible to its human servant. Fillers help the cat hide its waste and thus the resulting smell. All clays counteract odor and slow bacterial growth by absorbing the liquids from cat waste and stifling the natural conversion of urea into the ammonia smell we all know and don't love. Cats and other true carnivores metabolize a higher percentage of protein than omnivores, such as pigs and dogs, which produce milder-smelling waste. ''If cats ate corn on the cob,'' says researcher Moll, ''the litter box would smell a lot better.'' IN THE PAST TEN YEARS the industry has developed what it terms ''second- and third-generation litters.'' Second generation involved adding a highly proprietary perfuming agent to the litter. As the market grew, research and development teams scrambled to find agents that would prevent the odor from forming, leading to third-generation litters that are treated with a mild disinfectant to slow microbial growth. Says Sam Scott, chief executive of Pennsylvania-based Waverly Mineral Products, the makers of Glamour Kitty and MultiCat: ''Today we're no longer just folks who put dirt in a bag. We have a sophisticated product. The litter business is right up there with toothpaste and underarm deodorant.'' Ed Lowe claims he has ''always been one step ahead'' on R&D. He should be. The nine scientists and technicians at his high-tech Cassopolis research facility perform exhaustive studies on competing litters. Lowe occasionally employs about eight humans to sniff on a part-time basis various soiled litters as they age at room temperature. In 1986, for example, the company went through about $100,000, a ton of feline feces, and 2,000 test noses -- both human and cat -- to choose an ''exciting yet subtle new fragrance'' that smelled like pine and turned out to be a big hit with man and beast.

At Oil-Dri's Ochlocknee plant, one door is marked NO ADMITTANCE. ''That is where Clorox keeps its magical secret ingredient,'' a visitor is told. The entire industry adopts a no-admittance stance when talking about proprietary litter additives. Insiders will, however, talk about the competition. ''We all had a good industry laugh when Ed Lowe came out with the claim that his litter was 99% dust free,'' one source says. Almost everybody else's is too. But reliable gossip reports that Lowe has used a Teflon-like product in his virtually dust-free litter and that the company has taken another step into the future by sanitizing its Kitty Litter clay with an iodine complex popularized as a hand scrub for surgeons. Stronger disinfectants would seem a simple answer to the odor problem for the entire industry, but all companies walk the fine line between what's bad for bugs but okay for cats and people. Says Oil-Dri's Moll: ''Regardless of what we technically could do, we're going to be sure that anything we sell -- well, if you take a spoonful at night, you're going to be here in the morning.'' Depending on whose research you believe, the penultimate litter consumer is typically either a Porsche-driving, penthouse-dwelling, corporate mogul or a little old lady in pink sponge curlers watching Lawrence Welk reruns on television under a bare light bulb. On his wall map tracking Jonny Cat sales, Bill Jones notes that they ''pretty much follow the weather belts. The colder it is, the more the cats are inside, the more litter is used.'' America's top litter buyers are the folks in the Albany-Schenectady-Troy market of New York, who each year use 43 pounds for every household, with or without cat. That's almost five times more than the households in the Shreveport-Jackson market in . Louisiana and Mississippi, who dump and scoop only about nine pounds a year. Of the $10 million the industry spends on advertising, about 60% is Ed Lowe hawking his product. ''First he puts his picture on the back of the bag, then the front, and now he's on TV too,'' grouses a competitor. But Carol Parks, vice president of marketing for Excel, claims her company was ''the first to actually put the cat in the box on network TV.'' Clorox takes cat owners on a guilt trip with a recent campaign that asks, ''Are you doing everything you can for your cat?'' For smaller companies, the bag may well be the best shot at snagging the customer. Says Waverly's Scott: ''For years we sponsored a Glamour Kitty contest, like the Miss America pageant. The winning cat would be on our bag the next year. The problem was, since character counted, the winning cat wasn't always photogenic. So we changed the bag design.'' Today Glamour Kitty has ''a tabby that makes great eye contact,'' Scott says. To test-market MultiCat, a litter with a proprietary odor-eating ingredient that works better if two or more cats use it (not simultaneously), Waverly went to a shiny white bag with high-style black line drawings of feline friends. ''We felt bag advertising was too soft,'' Scott says. ''So the MultiCat bag takes a 'we mean business' attitude. This is not Lean Cuisine. This is a tool to fight the odor problem.'' OF COURSE someone's always out there longing for purrfection. One outfit is looking at a top-secret litter-free litter box, while another has hopes for rinsable, reusable litter. Says Oil-Dri's Moll: ''There must be a patent granted every week on a cat toilet. But in the end, it all comes back to clay.'' When Excel's Bill Jones stands atop a scrubby range of California mountains, he's in his glory. ''Our reserves here should last a billion years,'' he says. That's good news for man's new best friend.