Pets integral to health and wellness, will drive the business
For several weeks we have predicted resilience for the pet food segment, and that is borne out in recent sales performance reports from Nielsen. Dog food was up 37.5% year over year for the week ending March 14, and up 54.7% for the week ending March 31.
While this may be attributed to some stocking up (and even hoarding) behaviors in and around the stay-at-home restrictions, the overall forecast for the remainder of 2020 continues to show modest growth, now projected at 4% for the pet food segment for the year, according to Packaged Facts.
Long term, the pet food business will not only weather the storm but will continue to grow despite the economic conditions impacting other business segments. Unlike the Great Recession of 2008 and ’09, the pandemic is a different threat, one that has served to greatly enhance the value proposition of pet ownership.
In a related story, Emergent has tracked a variety of reports from around the country showing pet adoptions are increasing as mandated stay-at-home conditions continue to favor the presence of dogs and cats in the household.
Human and pet food trends are intertwined
As many in the pet industry already know, the relationship between human food business trends and pet food are extremely close. According to a recent report from The Hartman Group on consumer response to COVID-19, stress and anxiety management have risen to the top as the fundamental driver for self-directed efforts to manage health and wellness.
Consumers are laser focused on developing ‘nurturing habits’ to help them feel well. Conversations about mental health have been de-stigmatized in recent years and consumers believe their wellbeing is tied not only to physical exercise and better eating, but also to their ability to manage stress in their lives.
Dogs and cats are known stress-reducers. Hartman goes on to report an uptick in physical activities among home-bound households, as people work to resolve their growing needs for physical and mental wellbeing. Dogs, especially, are part of this regimen as anecdotal reports continue to escalate about increased frequency for dog walking and outdoor activities involving them.
Emergent believes these trends form the basis of resilience for pet food, even as other sectors in pet care, including Veterinary services and pet boarding, face increasing headwinds.
Pet Food Processing survey underscores continued growth
A recent survey conducted by Pet Food Processing reports 63% of pet food manufacturers have seen an increase in demand fueled by novel coronavirus conditions.
Other relevant data useful for planning:
57% of pet food brands are seeing growth in the e-commerce channel, and 30% say distributor sales are up.
25% are experiencing growth in grocery, supercenter and club channels.
73% are reporting no current declines in any channel.
28% have reported no material changes in their business results.
20% have experienced disruptions in the supply chain, an area of vulnerability.
Rigid demand supported by value surge
Now is not the time for pet brands to go dark in the midst of economic uncertainty. Dogs and cats own a unique and special position in the home that will continue to elevate their value as part of the household budget. History shows repeatedly that brands which continue to invest in times of economic challenge show comparative growth and increased share of market, as a reward for their perseverance.
- Rather than focus on protein percentage wars that have been a familiar refrain for some time in pet food marketing, Emergent recommend brands become more focused on pet lifestyle relevance and the incredibly important bond between pets and their parents.
The pandemic has served as an ultimate reminder to people about why their pets matter and how much they derive personally from the relationship. Scientific studies that for decades have shown a positive relationship between pet ownership and the physical health and wellbeing of owners, is getting the biggest global real-world test in the history of the industry.
While the year on year growth will be more conservative than previously forecasted (pre-pandemic), it is nonetheless a viable condition to manage, unlike other businesses now struggling with relevance and priority.
We anticipate the demand for pet food to remain steadfast based on the growing evidence that pet ownership is irrevocably tied to human wellbeing.
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Bob Wheatley is the CEO of Chicago-based Emergent, The Healthy Living Agency. Traditional brand marketing often sidesteps more human qualities that can help consumers form an emotional bond. Yet brands yearn for authentic engagement, trust and a lasting relationship with their customers. Emergent helps brands erase ineffective self-promotion and replace it with clarity, honesty and deeper meaning in their customer relationships and communication. For more information, contact [email protected] and follow on Twitter @BobWheatley.