December 12, 2018

Trends in Pet Food, Treat Purchases

Online sales are transforming the pet food industry, but pet owners are not yet ready to abandon retail locations.
 
By Amanda Carrozza
Spending on pet products, services, and food is expected to reach an all-time high of $72 billion this year. One area that is showing particularly impressive gains is the pet food sector, with food and treats accounting for $32.7 billion in spending over the past year. This represents a 5% increase ($1.5 billion) over 2016, according to recent Nielsen findings.

In addition to the increasing number of pet owners in the country—nearly 57% of US households included a pet in 2016—experts attribute the upward trajectory largely to the ease of buying treats and food online. In fact, e-commerce sales in this category have increased by 53%.

“As with the human food and beverage industries, product assortment and fulfillment options across the pet industry have exploded as consumers have shifted how they shop for their furry companions,” the Nielsen reports reads. 

Choosing Quality Over Quantity
And while the Nielsen report indicates that the total amount of food being sold has dipped slightly, experts believe the increase in overall sales can be linked to pet owners selecting premium products for their pets. Sales of wet food, in particular, grew by 4.7% and the segments for “natural” and “free from artificial colors” foods increased 43% and 27%, respectively.

This correlation is in line with a 2019 trend report that predicts pet owners will continue to become much more cognizant of the types of foods they feed their cats and dogs. A survey of pet owners conducted by the Michelson Found Animals Foundation found that 70% of those who follow a diet for themselves have also put their pet on a special diet. For instance, 45% of pet owners on a protein-rich diet feed their pets protein-rich foods, whereas only 17% of owners not on a protein-rich diet feed their dogs in this manner.

Not only has the trend toward choosing healthier pet foods affected how manufacturers market their products, it has also had a direct impact on what retailers choose to sell. In an unprecedented move last month, Petco announced that it will begin removing pet foods and treats containing any artificial colors, flavors, or preservatives from its stores and online marketplace in January.

Brick-and-Mortar Remains Primary Pet Food Source
Even with the significant uptick in online sales, brick-and-mortar locations maintain a stronghold on the pet consumables market, comprising nearly 50% ($16 billion) of annual sales. According to Nielsen’s Digital Shopping Fundamentals research, 1 in 2 pet owners indicate that they don’t ever intend to buy pet products online. These findings indicate the while growth among big-box retailers has slowed, retailers must cultivate an omnichannel presence to succeed in the marketplace.

Pet Food Sales Decrease in Vet Hospitals
One area that did see a notable decrease in prescription pet food sales was veterinary clinics. The segment received $1.6 billion in sales across pet consumables this year, a 6% drop from the prior year. According to Nielsen, pet food volume sales (which totaled 393 million pounds) has declined by more than 8% in veterinary hospitals. The research also found a decline across almost all prescription pet food and treats, with more pet owners likely turning to the internet for support or filling their prescriptions online rather than directly with their pet’s veterinarian.

 

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