Since at least the Great Recession of 2008-2009, the pet food market has beenrenowned for its resilience. After all, that was preceded by the massmelamine-related pet food recalls in the U.S. in 2007 – and yet, by 2011, petfood sales and spending were increasing again.
Today, with a global pandemic spurring an economic meltdown, can pet foodcontinue its run of resilience?
Strong pet food spending pattern since 1997
We started the Petfood Industry Confidence Index (p. XX) at the beginning of2020 before knowing all this year would bring, but its aim is to provideinsights to questions like that over time. For a broader perspective of howthe market might fare considering current conditions, perhaps it helps to lookto the past.
On his blog, PetBusinessProfessor.com, John Gibbons offers analysis of U.S.pet food spending, using data compiled by the U.S. Bureau of Labor Statistics.Going back to 1997, the data display a pattern through 2017 of a two-yearincrease, followed by a plateau or decreasing year – except for 2006-2010,with the 2007 recalls and Great Recession.
That pattern seems to have changed in 2018 and mid-year 2019, with drops ofmore than 7% each year. (Data for the last half of 2019 is due in September2020.) That could be partially a market correction to higher spending in 2017due to mass premiumization and channel disruption, plus the Food and DrugAdministration’s ongoing investigation into a still unproven link betweengrain-free pet food and canine dilated cardiomyopathy (DCM).
Industry resilience back to the ’70s?
The recession-resistant nature of the industry may go back farther than the1990s. A longtime pet food expert told me that, years ago, she trained herdogs in classes at a pet store started in about 1970. Despite a significantrecession in 1973-1975, the store owner was able not only to keep her businessgoing but to grow it.
“One of the first lessons I learned in this pet business was that it is veryresilient to economic downturns,” my contact said. “The mix of products willshift but people care very deeply for their pets and will continue to sustainthem.”
Will that hold true even amidst a COVID-19 pandemic and free-falling economy,on top of evolving situations like DCM and shifting purchase channels? Withhumanization of pets now a foundation of pet care, let’s hope it can help themarket withstand anything thrown its way.
Source:Debbie Phillips-Donaldson Petfood Industry.com
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