Pet care remains buoyant as consumers cling to premium brands

BEST TAKEAWAYS

  • Across all retail outlets, sales of dog food and treats were up 12.2% from a year ago, while sales of cat food and treats were up 14.6%.
  • The “humanization” of pet food – i.e. owners seeking more humane foods for their pets – continued to drive innovation and sales gains in the category
  • Fresh and frozen pet food saw the strongest year-over-year percentage growth in the overall pet category

The ‘premiumisation’ of pet food continues to drive supermarket sales amid inflationary pressures, ongoing supply chain issues and growing online sales.

Momentum has remained strong since the surge in pet adoption during the pandemic that boosted the category, said Shep Kroner, director of customer insight for UNFI Brands+, Providence’s private label division. , a distributor based in RI United Natural Foods Inc.

Across all retail outlets, sales of dog food and treats were up 12.2% from a year ago, while sales of cat food and treats were up 14.6 %, according to NielsenIQ data he cited for the 52 weeks ending July 23.

The gains came mostly from higher prices, Kroner noted.

“Inflation has had a major impact on the category,” Kroner said, noting average unit price increases of 14% for dog food and treats and 15.5% for cat food and treats over the course of the year. of the last year.

Jeff Tawson, category manager at Western Grocer Raley’s, agreed that dollar sales remain at all-time highs in the category, although unit volumes “remain a major concern in the cat and dog segments.” He said pet food brands have raised prices by 7% to 17%, and some have passed through multiple increases over the past 12 months.

Supply chain gaps also remain a challenge, particularly for value-priced brands, where fill rates have been “well below 60%,” Tawson said. Wet cat food also continues to experience supply chain issues, according to UNFI’s Kroner.

“If pet owners wanted to switch to a more economical brand, would they be able to?” said Tawson.

Barbara Connors, vice president of business intelligence at Cincinnati-based data research firm 84.51°, a subsidiary of Kroger Co., said pet owners are hesitant to trade or switch brands, even in the face of to rising prices.

While 52% of consumers in a recent 84.51° survey said they were cutting back on non-essential products due to inflation, only 7% said they were doing so with pet food, Connors reported. .

Additionally, 46% of consumers said they are switching to cheaper brands more often overall, but only 20% of respondents are willing to switch to cheaper brands in pet food. The only category with a lower percentage of consumers willing to switch was baby care, where 10% of consumers said they would buy a less expensive brand.

“We don’t want to cut back on feeding our two-legged and four-legged babies,” Connors said.

Sales data from 84.51° shows that dry dog ​​food and dry cat food were the most stable subcategories in terms of sales. But consumers are buying certain pet supplies less frequently, and some consumers are selling fewer treats and accessories.

“Dog treats are the space where we’re seeing the highest deal-seeking behavior from customers,” Connors said, adding that private label treats also gained share of sales this year.

Fresh and frozen pet food grow

The “humanization” of pet food — that is, owners seeking more humane food for their pets — has continued to drive innovation and sales gains in the category, a noted Raley’s Tawson.

“I would say the trend started before the onset of COVID, although 2020 and 2021 accelerated the emotional bond between pet and pet parent,” he explained. “Premium and Super Premium pet foods and treats seemed to have no caps.”

Premium fresh and frozen brands continue to grow, Tawson said. Raley’s, based in West Sacramento, Calif., continues to expand its relationship with Freshpet, a refrigerated pet food maker, and the retailer has also added human-grade frozen pet food to its ONE locations. Market.

“We have three stores where we can test and learn with ingredients, packaging, size and pricing,” according to Tawson.

Connors said sales data of 84.51° shows fresh and frozen pet food had the highest percentage year-over-year growth in the overall pet category. , although a small portion of the category’s total volume remains.

In addition to adding more refrigerated and frozen pet foods, Raley’s is expanding a new kiosk displaying human-grade baked dog treats in more locations.

UNFI, meanwhile, has seen growing demand for premium all-natural pet foods, including its private label Wild Harvest, Kroner said, adding that cat and dog foods have been the categories fastest growing for the brand over the past year.

Bryan Jaffe, analyst at Cascadia Capital, said the trend towards humanizing pet food bodes well for the supermarket chain.

“We are seeing an increase in the incidence of human-pet corollaries, which lends itself well to grocery distribution,” Jaffe said. “You buy jerky for yourself, you buy jerky for your dog. You buy cookies for yourself, you buy cookies for your dog.

by Raley

Raley’s Roseville ONE Market offers fresh, human-grade pet food and specialty dog ​​treats.

Raley’s expands its pet treat stand

Western grocer Raley’s has rolled out a new baked goods display for dog treats in its ONE Market stores and is expanding to traditional supermarkets in Raley.

“Our goal was really to create a destination that meets and exceeds all of our customers’ dog treat needs,” said Kristina Garris, West Sacramento, Calif. foodservice manager, Raley’s.

The display at the dog bake/treat kiosk includes four categories of human-grade treats: retail wrappers of treats from Claudia’s Canine Bakery; bulk dog biscuits and biscuits; specialized dog “bakes” designed to appeal to both humans and dogs and designed to resemble items from a typical human bakery; and happy birthday/gotcha day (the anniversary of adopting a pet) cakes and cupcakes for dogs for special occasions.

“Our idea was to create a dog bake/treat kiosk that could be cross-sold in the bakery department, near our human bakery and donut showcase, so customers could include canine family members in an occasional treat with the rest of the family,” Garris said.

In addition to promoting the kiosk with special offers in its traditional print ads, Raley’s promotes the program through an e-commerce platform and paid social media, she added.

“Customer response has been overwhelmingly positive and the program is definitely exceeding initial sales projections,” Garris said. “We’re seeing a lot of great organic posts on social media, and this is one of our most mentioned new programs.”

Due to initial success, Raley’s is launching the program at its four natural/organic ONE Market stores, as well as Raley’s stores in Incline Village, Nevada, and the banner’s newly renovated Bel Air store in Sacramento, California.

“As we learn in these places, we will decide on additional expansion opportunities,” Garris said.