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Pet care remains buoyant as consumers cling to premium brands

MAIN CONCLUSIONS

  • Across all retail outlets, dog food and treat sales were up 12.2% from the prior year, while cat food and treat sales grew 14.6%.
  • The “humanization” of pet food—meaning owners seeking more human-style foods for their pets—has continued to drive innovation and sales growth in the category.
  • Fresh and frozen pet foods have seen the highest percentage growth year over year in the overall pet category

The “premiumization” of pet food continues to drive supermarket sales amid inflationary pressures, ongoing supply chain issues and e-commerce sales growth.

Momentum has remained strong since the surge in pet adoption during the pandemic that fueled the category, said Shep Kroner, director of customer insights for UNFI Brands+, the private-label division of Providence distributor United Natural Foods Inc., Rhode Island.

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

The gains came mainly from rising prices, Kroner noted.

“Inflation has had a big 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 in the past year.

Jeff Tawson, category manager for Western grocery store Raley’s, agreed that dollar sales remain at all-time highs in the category, though unit volumes “remain a major concern in both the dog and cat segments.” of cats”. He said pet food brands have raised prices 7% to 17%, with some passing through multiple price increases over the last 12 months.

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

“If pet parents wanted to switch to a cheaper brand, could they?” Tawson said.

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

While 52% of consumers in a recent survey of 84.51° said they are cutting back on non-essential items as a result of inflation, only 7% said they are on pet food, Connors reported.

Additionally, 46% of consumers said they are switching to lower-cost brands more often overall, but only 20% of respondents are willing to switch to lower-cost 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 lower-priced brand.

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

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

“Dog treats are the space where we’re seeing the most customer behavior around deal-seeking,” Connors said, adding that private-label treats have also gained sales share this year.

Fresh and frozen pet foods grow

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

“I would say the trend started before the onset of COVID, although 2020 and 2021 accelerated the emotional bonding between pet and pet owner,” he explained. “Premium and super-premium pet foods and treats seemed to have no ceiling.”

Fresh and frozen premium brands continue to grow, Tawson said. West Sacramento, California-based Raley’s continues to expand its relationship with Freshpet, a manufacturer of refrigerated pet food, and the retailer has also added human-grade frozen pet food at its ONE Market locations.

“We have three stores where we will be able to sample and learn about ingredients, packaging, size and price points,” according to Tawson.

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

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

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

Bryan Jaffe, an analyst at Cascadia Capital, said the trend toward humanizing pet food bodes well for the supermarket channel.

“We’re seeing a higher incidence of corollaries between humans and pets, 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 Baked Pet Treat Kiosk

Western grocery store Raley’s has launched a new baked goods display for dog treats in its ONE Market stores and is expanding them into traditional Raley’s supermarkets.

“Our goal was really to create a destination that meets and exceeds all of our customers’ dog treat needs,” said Kristina Garris, director of food services at Raley’s, based in West Sacramento, California.

The display at the dog treat/cake kiosk includes four categories of human treats: Claudia’s Canine Bakery retail treat packs; bulk dog biscuits and biscuits; special dog “cakes” designed to be aesthetically pleasing to both humans and dogs and made to resemble typical human bakery items; and happy birthday/gotcha day dog ​​cakes and cupcakes for special occasions.

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

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

“Customer reaction has been overwhelmingly positive and the program is really outperforming initial sales projections,” Garris said. “We’re seeing a lot of great organic posts on social media, and it’s one of our most talked about new programs.”

Based on 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, Nev., and the brand’s newly remodeled Bel Air store in Sacramento, California.

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

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