Pet project: Owners will spend on food, products and services
A recent article published in the Whole Dog Journal included a number of therapeutic ways people can address their pets’ arthritis pain relief needs, including a lengthy discussion on laser and red light therapies. A few years ago, a similar article would have likely focused on prescription-based solutions, but now the conversation often centers on alternative methods for caring for our pets.
It is clear from articles such as these and others that pet owners are willing to go through many lengths to ensure their four-legged family members receive the best food and care throughout their lives.
It is estimated that $69.4 billion will be spent on pets in the United States this year. The lion’s share — some $29.7 billion — will be spent on food, while pet owners will shell out $15.9 billion on supplies and OTC medicines — which constitute the third-largest spending area for pet owners. Vet care is pet owners’ second-largest spending area and is set to reach an estimated $16.6 billion this year.
One of the biggest jumps in spending is on such pet-related services as grooming, boarding, training, pet sitting, pet exercise and pet walking.
In fact, the American Pet Products Association, or APPA, says the sector has been averaging $2.5 billion in growth each year since 1994. Underlying this is the larger trend in keeping pets healthier longer.
“We are so committed to our pets that for many people keeping them as healthy as possible is a top priority,” said Bob Vetere, president and CEO of the Stamford, Conn.-based APPA. “People are willing to spend more on food, products and services that they feel make a difference in their pet’s quality of life.”
It’s not that people have tons of extra money to spend, but as Vetere points out, more and more pet owners are willing to cut back on things that don’t mean as much to them in order to have the money to spend on things that make them feel good, including their pets. This is a trend Vetere expects to continue for some time.
Other category experts concur with Vetere, noting that all signs point toward 2018 being another stellar year for the pet category.
The category is in great shape and the outlook appears positive for the foreseeable future, according to Paul Cooke, vice president of trade and industry development at St. Louis-based Nestlé Purina PetCare.
“Pet care isn’t just ranked eighth out of 305 supermarket categories by IRI, it’s also growing two times that of the overall center store, according to Nielsen Scantrack data,” Cooke said, adding that the value of pet care goes well beyond just category dollars. “Pet care also has the potential to boost total store traffic, triggering more trips than any other category, according to a Nielsen shopper study.”
The renewed interest in products that promote and support health and wellness, as well those focusing on meeting pets’ specific nutritional needs with natural ingredients, are driving sales, Cooke said. As a result, he anticipates the natural products will play a large role in future category growth.
Among the categories whose growth is being driven by natural and eco-friendly products is cat litter, according to Jean Broders, senior brand manager at Kent Pet Group, based in Muscatine, Iowa. Broders noted that the top two features cat owners require are odor control and ease of use, but a growing number are looking for options for shoppers conscious of their ingredients and impact on the environment.
“[More than] 8 billion lbs. of litter end up in landfills each year, and this alone is driving consumers to look for products that are better for the planet,” she said, adding that health-monitoring litters that can help cat owners detect problems early also are a growing subset in the category. “Problem-solution products are a key focus for consumers across all categories, including cat litter.”
Given the mature status of the cat litter category, officials at Kent Pet Group said future growth is directly tied to any increases in the number of cat-owning households. Citing figures from Packaged Facts, Broders noted one-third of cat litter sales occur through mass-market channels (32%); 26% in supermarkets; 8% at wholesale clubs; 27% in pet specialty and 4% online.
Broders advised that retailers who are looking to grow share make sure they carry litters that go beyond traditional clay litters, as millennial consumers are interested in products that are environmentally friendly and healthy for their homes. Broders noted that at Kent Pet Group, the focus is on listening to their consumers’ needs and making sure their products address those needs while working to improve the relationship between the cat and its owner.
“Keeping in mind no one likes cleaning the litter box, we focus on litters that make it a quick and easy process, so owners can spend more time doing things they actually enjoy,” Broders said.
Where owners go, pets follow
One explanation for the strong growth seen in the pet category is the number of retailers moving away from sourcing their own products to focusing on brands that consumers recognize. Just because an item may be an impulse buy doesn’t mean consumers will give their pets just any old treat or toy, said Leslie Yellin, executive vice president at Moonachie, N.J.-based Multipet International. In fact, she noted, it is just the opposite, and discerning is the name of the game. “Consumers actually are more discriminating when it comes to products for their pets than they are for themselves,” Yellin said.
Therefore, given the emphasis on health, she suggested retailers concentrate on offering treats, food and toys that offer interaction and exercise. “Given that most of the traffic in the pet aisle is for food and litter, having branded products on the shelf creates trust and sends customers the message that the retailer has top-of-the line, on-trend products,” Yellin said.
Pet owners are among the group of shoppers who will go to whichever selling the products they desire. And research shows that often, their shopping is split among several retail channels, both physical and online. Mass retailers may have the foot traffic, but as Vetere points out not all are leveraging that asset as best as they can.
“Retailers need to listen to their shoppers more and offer a better selection of authentic products that align with their lifestyle choices versus giving them those you think they need,” he said. “Pet owners spending the most often are not enticed to go down the pet aisle because not enough of the products appeal to them.”
Developing the right assortment doesn’t have to be a mystery. For retailers operating drug, mass or grocery stores, Vetere said the answer to what pet products should be carried can be found right in the store, noting that sales of people-oriented products will often track with pet-related products.
Recognizing the need to play to the masses, experts said there also is room to cater to a smaller but growing segment of pet owners — those who follow a natural, organic and/or grain-free regimen with both food and treats. Some have suggested placing a set-within-a-set in the