By Kathryn Peters, Executive Vice President of Strategic Initiatives, SPINS
Today’s pet owners are taking their love of pets to a new level. When pet owners browse aisles for kibble, catnip and treats, they’re bringing the same list of requirements that they’d bring to the grocery aisle for the products they are going to consume. The leading trends aren’t simply about choosing between dry or wet dog food; it’s about everything from the ingredients to the pricing to the packaging.
These trends are rising while the pandemic is also changing how everyone shops. Today, pet brands and retailers are facing a combination of exciting consumer-driven changes in a unique world. As daunting as that may sound, it’s also providing new opportunities to adapt and reach more customers.
The Pandemic Effect: New Pet Owners and More E-commerce
We can’t talk about what’s happening in the pet industry without first looking at how shoppers have adapted to COVID-19’s impact on our lives over the past six months. As the pandemic has worn on, consumers have adjusted their daily routines and shopping. When everyone was stocking up on groceries in late February through late March, pet owners were also stocking up on pet essentials to prepare for extended lockdown. According to data from SPINS Natural Enhanced Channel, Neighborhood Pet Specialty and MultiOutlet Channel (powered by IRI), pet food (for dogs, cats, reptiles and small animals), treats, litter and bedding, and waste management supplies all saw significant bumps compared to the same period in 2019.
When most shoppers transitioned into lockdown, pet adoption and foster rates increased throughout the country. No longer heading into the office five days a week, new pet owners wanted their newest family members settled in comfortably. Between the end of March and the start of July, pet food continued to see year-over-year growth, but nonconsumable pet items experienced substantial growth as well: grooming and bathing supplies (up 33%), beds and furniture (up 20%), toys (up 20%) and harnesses and leashes (up 10%).
Unsurprisingly, many of these purchases happened via online shopping, particularly during April and May, when internet sales drew from pet outlets and share of wallet peaked at 20%. Internet sales (which include both online and click-and-collect) have tapered off in subsequent months, but they are still well above pre-COVID-19 levels.
There are three major trends that are helping shape the pet supply industry moving forward and that pet brands and retailers can tap into:
1. Raw Food Gains Popularity
Pet owners are seeking out choices traditionally associated with human diets rather than pet diets. These increasingly popular dietary choices comprise a small but quickly growing segment of the market with passionate consumers.
Take raw pet food, for example. Pet owners who prefer to serve their pets minimally processed food are choosing raw options, which usually means food mostly made of animal parts and certain vegetables. Over a 52-week period between July 2019 and July 2020, raw pet food showed signs of strong growth across Neighborhood Pet, Natural Enhanced and conventional channels: Refrigerated raw food grew 62% in Neighborhood Pet and 35.9% in Natural Enhanced. Frozen raw food grew 9.4% in Neighborhood Pet, while shelf-stable raw food increased by 85.4% in conventional outlets. Across all pet channels during that same period, raw pet food was up 9.4%.
2. Refrigerated and Frozen Show Signs of Becoming Mainstream
Over the same 52-week period, refrigerated and frozen pet food (overall, not just raw) grew substantially in conventional outlets, natural enhanced stores and neighborhood pet stores. During this same period, shelf-stable products experienced a small decline within natural supermarkets and neighborhood pet stores. In a 12-week period ending in mid-July, however, refrigerated and frozen pet food sales slowed drastically, thanks in part to fewer promotions and shoppers consolidating their trips to the store. Although these categories only account for approximately 5% of overall volume, their widespread growth is another example of a trend poised to become popular with shoppers looking for the best quality foods for their pets.
3. CBD Becomes a Standout Supplement
Similarly, as humans are increasingly consuming CBD, whether as a standalone supplement, a topical or within food and beverages, it’s also finding its way into pet products and consumables. Pet owners want their dogs and cats to be as comfortable as possible, and CBD’s ability to address joint pain and having a calming effect make it a popular choice. Thirty-two percent of CBD sales came from vitamins and supplements, while 68% came from treats. This suggests that pet owners are attracted to the most convenient solutions for administering CBD to their pets.
Differentiation Is Key
When the lockdown forced consumers to consolidate their shopping trips, whether that meant moving to e-commerce or choosing one conventional outlet for all their needs, and many smaller businesses temporarily closed, neighborhood pet stores felt the effects. Their continued success is important not only for retailers but for the innovative brands they carry.
In neighborhood pet stores, 70% of their sales come from natural, specialty and wellness products. The rising trends discussed above — raw, frozen/refrigerated and CBD — begin with the brands that create solutions for discerning shoppers before the rest of the market catches on.
As brands and retailers navigate a mid-pandemic industry and look ahead to a post-pandemic future, differentiation is key to success. Give shoppers — especially the new COVID-19-era pet owners — a reason to visit neighborhood stores and try a new product that appeals to the high standards they’ve set for pet care. Whether through promotions, in-store education or other marketing efforts, now is the time to connect with shoppers and shape how the pet industry moves forward. Pet parents want the best for their furry family members too.
For more information, reach out to me directly at kpeters@spins.com, or to your IRI representative or to IRI@IRIworldwide.com.
