All in the family

Pet-food shoppers seek human-food attributes

Premium pet food drives growth

Pets have become such an important part of the family for many owners that dogs and cats have earned a seat at the dinner table — figuratively, at least.

But even though consumers are seeking out natural, organic and minimally processed foods for their pets — as though they were shopping for their own children — price is still very important to pet-food purchasers, says Rachel Shemirani, VP of marketing at Barons Market, a seven-unit supermarket operator based in San Diego.

“While people love their pets, and while people love spending money on their pets, value is still very, very important,” she says. “People do want to feed their animals good-quality foods without spending way too much.”

Barons carries a tightly edited selection of natural and organic cat and dog food, including the leading products from Castor & Pollux and Wellness, the brands that its customers have said they prefer. The company seeks to price cheaper than larger pet superstores, Shemirani says.

She cites grain-free pet food as “the first big trend that we heard our customers asking for, and now organic has been coming on even stronger than it was a few years ago.”

“About 10 or 15 years ago, it was all about ‘human grade’ pet food, but now we have kind of gone beyond that,” says Shemirani.

‘Premiumization’ of pet foods

The humanization of pets and the premiumization of pet food are two key trends driving growth in the pet industry, says Evelia Davis, VP of dog and cat consumables for Phoenix-based pet-products retailer PetSmart.

“Premiumization is about elevating how we treat our pets, which includes enhanced health care and dietary practices,” she says. “As humans focus more on natural, organic and high-quality foods, we’re seeing this trend move onto the pet space as well. There is an increasing awareness and belief that feeding high-quality pet food can have positive health benefits for our pets.”

PetSmart’s insights reveal that natural pet food is the fastest-growing segment at more that 10% per year, compared with 3% to 4% for the total pet food category, “and we expect that trend to continue,” says Davis.

The pet food industry is continuing on a trajectory that was propelled by the widespread recalls of 2007, which prompted consumers to take an increased interest in the safety of the cat and dog food they buy.

In fact, 64% of dog owners and 56% of cat owners consider product safety and the potential for contamination when purchasing pet food, according to a recent Packaged Facts report, “Natural, Organic and Eco-Friendly Pet Products in the U.S.” The report’s consumer survey also found 50% of pet-product purchasers agree that natural and organic pet foods are safer than regular pet foods.

Human-food attributes

In addition to gravitating toward natural pet foods, pet-food purchasers are also looking for foods that share many of the other attributes they want in their own diets, including gluten-free foods and grass-fed and cage-free protein sources, as well as meatless offerings, says Shannon Brown, an analyst with Rockville, Md.-based Packaged Facts.

“Superfood ingredients — such as chia, kale and quinoa — are also popular, and tend to move fairly quickly from the human food market into pet foods,” she says.

The sales growth of pet foods labeled as “natural” has been outpacing conventional pet food sales growth, and is expected to continue to do so, says Brown. However, she added, as natural pet foods become more mainstream, “the cachet of ‘natural’ product will become more diluted,” forcing natural pet-food marketers to call attention to other attributes.

Meanwhile “grain-free” pet foods also continue to gain steam. The Packaged Facts pet-owner survey found that 19% of dog owners and 15% of cat owners were using grain-free pet foods.

Brown noted that while organic foods still form a relatively small portion of the pet food market — estimated at less than 0.5% market share — such products could see sales growth if marketers can procure enough ingredient supply, keep prices in line, and overcome regulatory complications.

The Packaged Facts research also cited growth in consumer interest in eco-friendly products.

“Consumers that are looking for more natural products are typically those that are also interested in environmentally friendly practices,” says Brown, noting that sustainable/humane sourcing of ingredients and “green” packaging are among the key eco-friendly attributes customers are seeking.

Davis of PetSmart says that company is seeing increased interest in its higher-end natural pet foods, which it calls “pinnacle pet nutrition” — 100% natural, minimally processed and freshly prepared.

The chain offers an exclusive line called Only Natural Pet that falls into this category, she says.

Increased transparency

Marketers in the natural pet-food market are striving for increased transparency in terms of labeling, says Brown of Packaged Facts.

“Consumers are becoming more educated when it comes to pet food purchases, and they want to know what’s in the bag, so to speak,” she says. “An additional factor is that what ISN’T in a product can be just as important, and marketers will alert consumers to which potentially problematic ingredients have been eliminated.”

In mass market channels, alerting customers to the availability of natural, organic and/or eco-friendly pet foods is critical,” says Brown.

“Using in-store promotions and educating store employees about the products will help get the word out,” she says.

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