A new report on the U.S. pet food market indicates few dog and cat owners arespending less on food for their pets – based on a survey conducted by PackagedFacts in April and May 2020. As the country struggles to contain escalatingcases of COVID-19, unemployment and financial hardship are also increasing.That could eventually affect how much pet owners can spend.
The report, “Pet Food in the U.S., 15th Edition,” released July 10, shows just16% of dog and cat owners agreed they are spending less on pet food, with only5% strongly agreeing with the statement. Encouragingly, 25% disagreed with thestatement, and 36% strongly disagreed, perhaps confirming the perceptioncreated after the Great Recession of 2009-10 that many pet owners willsacrifice spending on high-quality pet food only as a last resort.
What’s a little worrisome, however, are the 22% in the middle: pet ownersneither agreeing nor disagreeing that they are spending less on pet food. Thatsegment could be comprised of people experiencing financial strain or worriedthat hard times are on the horizon. Despite the responses to the specificquestion about pet food spending, the report also states, “Packaged Factssurvey results show that 70% of dog and cat owners are cutting back onspending as a result of the virus, with 69% cutting back on buying non-essentials and 67% being more conscious about wasting food.”
U.S. pet food market still growing
The report covers only dog and cat food, plus toppers and mixers, and does notinclude treats and chews. Given those parameters, the market reached US$28.89billion in 2019, Packaged Facts says, representing a healthy 6.4% increaseover 2018.
In addition, the market research firm is projecting a slightly larger growthrate for 2020 – up 7% to US$31 billion – even better than the 6% rateoriginally forecast prior to the onslaught of COVID-19. The rosier projectioncomes thanks to “coronavirus-driven stockpiling and supplemented by increasesin new pet adoptions for the remainder of the year,” the report says. Whilegrowth will moderate over the next several years, according to Packaged Facts’modeling, it will still increase by at least 5% a year through 2024, reachingUS$38 billion then.
The caveat to those positive predictions revolves around the economy andmillions of pet owners likely suffering financial duress, Packaged Facts says.That could dampen dollar sales as some owners trade down to lower-cost petfood brands and foods, including private label. Yet the continuing shift ofthe market to “mass premiumization” – premium pet foods expanding from theiroriginal pet specialty home channel into mass market, online and beyond –could ameliorate the trading down to some extent.
In fact, U.S. mass market pet food sales (including grocery but not clubstores) increased 6.7% in 2019, while pet specialty sales declined 1.5%.“Comparing dollar and volume sales, Packaged Facts finds that all of the 2019dollar growth in mass channels, including Walmart and supermarkets, came fromhigher prices per unit and despite volume losses, intensifying the trend of2018,” the report says.
Lower pet food e-commerce pricing may prevail
Of course, e-commerce is now king, and it’s well documented how the pandemicand accompanying lockdowns and quarantines have driven even more consumers tobuy online, including their pet food. A key takeaway from Packaged Facts’April/May 2020 survey of pet owners is that 70% of dog and cat owners reportedshopping in brick-and-mortar stores less, while at the same time, 65% reportedbuying online more as a result of the coronavirus. In addition, 64% of surveyrespondents agreed that more of their everyday spending was being done online,and 73% said they feel safer buying things online as opposed to in a store.
That could actually be a boon to pet specialty retailers, includingindependents, that have been able to adopt omnichannel strategies offeringonline ordering, plus home delivery and/or curbside pickup, to augment theirbrick-and-mortar locations. A certain portion of U.S consumers – 79% of dogand cat owners, according to another Packaged Facts survey – said that, due tothe coronavirus, they believed it was especially important to buy from local,independent merchants, so they may stay loyal to those retailers if they can.
Yet financial realities often end up dictating purchasing decisions. The lowerprices typically offered by e-commerce giants like Amazon and Chewy may wellwin out if indeed some pet owners have to start cutting back on their pet foodspending.
Source:Debbie Phillips-Donaldson Petfoodindustry.com
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