Consider it a perfect storm, a convergence of two American obsessions — the growth of health and wellness as a factor in all of our buying decisions, and our love for our pets. As the two merge, retailers are seeing a boom in the niche category of better-for-you (or better-for-Fido) pet food and products.
“Over the decades, dogs and cats have moved from staying outside or in the barn to sleeping in our bed and even receiving birthday treats,” said Dana Brooks, president and CEO of the Pet Food Institute. “This trend continues to drive greater investment and innovation in new pet food and treat products and an increased shopper interest in pet nutrition and diet. We’ve particularly seen evidence of this interest via total sales value of pet food and treats. The sales value has increased steadily during the past decade, even during an economic downturn.”
A recent report from Nielsen noted that “the humanization of pets has played well for brands and retailers that have developed or pivoted their strategies for consumers looking to treat their furry friends to the best that life has to offer.” According to the report, titled “Trends in Pet Care Mirror Those of Pet Owners,” the demand for higher-quality premium food has boosted retail sales dramatically over the past 10 years, with annual pet food household spend among pet owners increasing 36% between 2007 and 2017.
Bob Vetere, president and CEO of the American Pet Products Association (APPA), noted, “The industry is moving beyond simply the humanization of pets to where they are now widely accepted as part of the pet owner's lifestyle. No matter the primary cause of increased spending on pets, be it enhanced nutrition, better health care, increased pampering or greater technology, the one thing we know for sure is that pet owners have a top priority in pursuing longer, healthier lives for their pets.”
The numbers bear that out. The most recent annual industrywide spending figures from APPA put overall spending in the pet industry higher than ever before with $69.5 billion spent in 2017 — a 4% increase over the previous year, and a whopping 40% more than in 2010 when the total was $48.3 billion. APPA estimates a total of $72.13 billion in pet spending for 2018, or another 4% increase year over year.
Of that total, pet food makes up $29.9 billion, virtually flat year over year, but still a significant number. And one of the trends that could start moving the ticker upward is a rise in sales of higher-cost healthy, natural and super premium pet foods.
Pet products at retail
Retailers are paying attention to the growing interest in higher-quality pet foods.
At Williamsville, N.Y.-based Tops Markets, “continued growth of higher-end brands is the future of the feeding category, both on the dog and cat food side of the business,” predicted John Cole, GM and pet food category business manager for the 170-store chain. “Ongoing channel jumping of the brands that were once only available in pet specialty shops and online will provide more sales growth and selection for our customers as they will no longer have to make an extra stop to a pet specialty location.”
To that end, Tops began carrying Pure Harmony super premium pet foods with cleaner, healthier ingredients in 2017. “A higher-quality product means that consumers can feed their pets less, pets on grain-free diets often experience fewer allergies and eating such fare may eliminate pets’ digestive issues,” said Cole. “As people understand the health benefits associated with vitamins, supplements and a healthier lifestyle, this translates to a healthier diet and lifestyle to their pet.”
The Pure Harmony brand comes from Topco Associates, a co-op that supplies premium brands to about 50 member retailers such as Tops, as well as Bashas’, Raley’s, Schnucks, Southeastern Grocers and more. Cole added, “We carry all major brands and will continue to update as channel jumping becomes more prevalent. Decisions on assortment are an ongoing necessity to meet shopper expertise satisfaction as well as maximizing profitable sales for the retailer.”
Whole Foods, which has built its business on better-for-you categories, has also taken that approach in its pet department and its private label Tender & True premium pet food and Whole Paws premium foods with added vitamins and minerals. The company “has long-standing, trusted relationships with several pet food companies that put animal health first and that are transparent in their manufacturing practices, so we can know as much as possible about the ingredients in every product,” according to a spokesman. Both Tender & True and Whole Paws brands are also available on Amazon.com, the parent company of Whole Foods, as well as Amazon’s own newly introduced Wag pet food brand.
Customers are much more aware of the ingredients in their pet food than ever before, and retailers are responding to that as well. Kroger, for example, offers all-natural Abound pet foods with high protein and vegetable content. “Protein has always been an integral part of the canine and feline diet,” according to Nielsen, “and in light of growing health concerns for our four-legged family members, consumers are newly focused on the variety and amount of protein in their pets’ diets. As the demand for transparency is increasing, meat is more commonly the primary ingredient.”
The e-commerce quandary
With 21% of pet food sales shifting to online, according to Nielsen, “retail is facing some challenges, and the right assortment and experience is key to capturing sales. Just in the last year, share of sales shifted 9 percentage points toward e-commerce, and there are no signs of slowing down. Notably, one in four Americans say that they’re more likely to purchase pet food online than in traditional stores.”
While acknowledging the growth of pet products online, Tops’ Cole remains confident. “With Instacart, Tops is competing well with our selections,” he said. “The convenience that Instacart offers gives our customers an easier shopping experience, especially when it comes to extra-large bags of food and litter.”
In addition, said Cole, “Beyond food, Tops has an extensive instant gratification category for our customers’ pets — something digital doesn’t offer. Giving our customers an extensive and ever-changing toy, rawhide and treat category on top of a full line of grooming aids and health products, lets our customers immediately interact with their pets.”
At the end of the day, that interaction is what all pets and their owners want.
Halo, Purely for Pets’ offers holistic supplemental whole foods for pets with specific conditions such as Joint & Hip Support, Senior Dog Defense, Sensitive Stomach, Skin & Coat Support and Immune Support. halopets.com
SPICE OF LIFE
PawTree’s pawPairings superfood seasonings are sprinkled on top of a pet’s regular food — wet or dry — at every meal and provide a powerful blend of natural vitamins, minerals and antioxidants. pawtree.com