With $31.5 billion in sales last year across pet food and litter alone, and a 6.3% increase in sales versus a year ago, it’s time for independent retailers to give serious consideration to the pet care category, a sector that many independent grocers have mistakenly considered to be out of their reach.
The Independent Grocers Association (IGA) is looking to change the mindset of its members who may be intimidated by the pet aisle, and are reluctant to grow the category in the face of online and specialty retailers. In an IGA webinar, CEO John Ross spoke with Pat Patterson, Purina category team leader North America, on the topic of building pet care profit.
Ross acknowledged the challenge faced by his association’s retail members. “When I’m visiting IGA stores, I see some amazing examples of marketing and merchandising in produce, meat, prepared foods, seafood — basically if it’s a fresh department, you’re going to find IGA retailers who are either already ahead of the game, or are well on their way to getting there. And if you really look at the data, we’re seeing that a lot of our growth is coming out of those departments,” he said. “But center store is where it’s hard to differentiate, so we need new strategies to help our retailers grow sales there.”
He and Patterson both agreed that the opportunities are there in pet care. “I think many times independent grocery retailers believe they are boxed out of pet care because they feel they can’t compete with big-box stores and online sales,” said Patterson. “But pet is growing in grocery across most demographics in nearly every part of the country in both brick-and-mortar and online. And it’s a category that is driven around emotion and affection, which makes it tailor-made for IGA’s locally owned, community-focused stores. Now we just need to find the right mix of assortment, marketing and merchandising to help IGA retailers become the local pet-care destination.”
According to Patterson, there are two key factors driving the growth of pet care products in the United States — home to 91 million owned dogs, he noted. “First, there’s the humanization trend, with a focus on more natural and organic, healthier pet foods and real meat as the prime ingredient,” he said, describing the pet aisle as a microcosm of the overall health and wellness movement in grocery shopping today. There has been 50% growth in those categories in pet food, Patterson said.
“Second,” he added, “is indulgence,” such as that seen in superpremium foods and dog and cat treats. “People are choosing to spend more on pets than ever before.”
Another new phenomenon in the category is “channel jumping” — traditionally online brands going into retail stores. “Premium online brands like Blue Buffalo and Nature’s Recipe are slowly but surely getting into retail distribution,” Patterson said. “This is an opportunity for grocery retailers.”
E-commerce, of course, is a huge competitive factor in the pet food category, but also an incentive for independent operators to launch online shopping. “If you join e-commerce,” said Ross, “watch your pet customers be among the first to sign up.”
As for price, while pet owners have shown themselves to be willing to pay the price for premium product and pet is one of the categories in which discount is less important, Patterson also noted that “many pet customers are loyal to their price class. Those who purchase value are very unlikely to trade up to superpremium.” For retailers, that requires a balancing act between value pet food and premiums. “While premiums can bring in new customers,” he said, “keep your staples for existing loyal customers.”
Asked by IGA’s Ross the top three things retailers can do to move sales forward in the category, Patterson replied, “First, offer the variety of product that shoppers need —more flavors, varieties, better-for-you formulas. Second, make it easy to shop and a fun, friendly experience.
“And third — and maybe this should be first — think about the frequency of promotion. It’s all about the marketing plan and getting those pet shoppers into your store.”
And for those retailers thinking about surrendering pet to online, big box and specialty retailers, Ross warned, “Pet owners spend $31 more per store visit than those without pets. That’s your incentive.”