Finicky felines are feasting better than ever as more and more owners reach for cat food with an upscale, gourmet twist.
The gourmet segment of the category -- dominated by products with names like Amore and Sheba -- has been able to maintain a stronghold on the pet food shelves of many supermarkets despite the stormy economic times of the last several years, said retailers contacted by SN.
Most of the grocery buyers interviewed said gourmet dinner sales are growing, at rates ranging from about 5% to 9%, despite the fact that the products are usually sold in 3-ounce cans priced slightly above the category's typical 6-ounce cans of more conventional cat food.
And while many said the products generate a modest portion of category sales, a few said they accounted for more sizable chunks of the market -- as much as 70% in one location.
The gourmet goodies are biggest in more upscale stores. One store where gourmet cans dominate, for example, is West Point Market in Akron, Ohio, which caters to a "very educated and upscale clientele," according to Jim Dietrich, grocery
manager.
Another retailer, who asked that he and his medium-sized Midwest chain not be named, said the products account for about 50% of his category sales and represent its fastest growing segment.
That retailer, like several others, said he believes consumer attitudes are driving much of the growth.
"The focus today is on upscale items -- and I think that's what's fueling sales in this area," the Midwest retailer said. In addition, "a lot of cat owners don't have children at home, which may leave them with more disposable income and a desire to really spoil their cats."
While many retailers said the products generate higher dollar rings and gross profit margins, some said their hefty price tags -- usually twice the per-ounce amount of nongourmet items -- can limit the customer base from expanding beyond a certain threshold.
"It's a lucrative part of the category -- but only if it sells," said Chris Mintus, grocery products manager at SuperValu's Pittsburgh division, New Stanton, Pa. Still, some buyers said recent price breaks from vendors may be helping.
Here's what retailers had to say about the gourmet cat food segment:
Dick Salmon senior VP
Melmarkets Garden City, N.Y.
Gourmet products are certainly a profitable and fast-moving part of the total cat food category.
Sales are growing at about 7% to 8% a year -- which is higher than the category as a whole, which is growing at about 5% a year.
Part of the growth is being fueled by the way people feel about their pets. As a nation, we pride ourselves on taking care of our families -- and pets are often considered part of the family. Even the gourmet product names sound like people food. For example, we carry Fancy Feast, Amore and Sheba.
There have always been people who have fed their cats gourmet types of meals by buying inexpensive chicken and fish parts from the supermarket. Today, manufacturers do the work for them.
Although the price is a little higher than other category items, we run promotions four or five weeks a year, which gives customers a chance to stock up.
As for merchandising, we usually place them at about eye level.
John Ruhland buyer-merchandiser
Fairway Foods Minneapolis
Although gourmet cat food hasn't traditionally been a high seller for us, it currently accounts for about 5% to 9% of our category sales, and the figure is growing.
I think some of the growth is due to lower prices from manufacturers. For example, we're now offering 24-unit cases of Fancy Feast for $7.77, instead of $8 -- and we've seen sales jump about 15% over last year.
We've already sold an additional 250 cases of Amore cat food, based on lower prices that go into effect next month. The prices are allowing us to offer a case for $6.48 with a $1.08 allowance, instead of about $8 with a $1.44 allowance.
We'll also be looking more closely at (Purina's) Unique cat food, which costs about as much as Fancy Feast, but comes in a 6-ounce can, rather than a 3-ounce can, making it a better value for customers.
Even though the prices are getting a little more reasonable, I think they will remain a little higher.
Although the lower prices will lower the gross profit margin for retailers, they'll also make the products a more viable subcategory.
But even without the price breaks, I think the category would still be growing. The cat pet population is growing.
Chris Mintus grocery products manager
Supervalu, Pittsburgh division New Stanton, Pa.
We're seeing some growth in the gourmet segment, but it's being offset by the everyday low prices that manufacturers are offering on the less expensive cat food products.
Gourmet cat food carries a higher price and generates a higher gross profit margin, so it's a lucrative part of the category -- but only if it sells.
The problem is that the lower-priced items are drawing a greater volume of customer sales. We definitely sell a lot more of the 6-ounce cans of cat food than we do of the 3-ounce gourmet sizes.
Still, growth is occurring. I think there's always people who want to pamper their pets -- and manufacturers are introducing a lot of new products, which is partly responsible for the growth.
We usually merchandise it at eye level, with the regular products below it.
Bob Rieck grocery buyer
Seaway Food Town Maumee, Ohio
The gourmet segment generates about 15% of our cat food category sales and it's growing about 10% to 12% a year -- which is twice the rate of the category as a whole.
I think sales are being driven by the steady influx of new products and the promotional support that manufacturers are putting behind them.
I think there's a lot of people out there who consider their cats part of the family and want to feed them a more gourmet-type of product.
Most of the sales are probably coming from a more upscale customer, who can afford to pay extra for cat food. Still, right now the manufacturer coupons and discounts are helping drive sales.
That's good for us, because the customer has an incentive to buy the product -- and the discount comes from the manufacturer. I don't know what'll happen once manufacturer support wanes.
Jim Dietrich grocery manager
West Point Market Akron, Ohio
We have a very educated and upscale clientele, which may be one reason our gourmet cat food accounts for about 70% of our total category sales.
We offer about 30 varieties of Fancy Feast, which far outsells any other product we offer and accounts for about 50% of our category sales.
A 43-cent can costs 6 cents more than a 6-ounce can of regular cat food -- and it's about half the size -- but our customers buy it.
We carry dry cat food, but it's a really slow seller for us. The 3-pound bags just don't move. Our store only promotes specialty items, so the cat food category isn't promoted. We simply merchandise it around eye level on the shelf.
Peter Jost head grocery buyer
Harp's Food Stores Springdale, Ark.
We're definitely seeing an upward trend in the gourmet cat food segment. It currently accounts for about 15% of the category's total sales.
I think a lot of the growth has to do with changing lifestyles. People are more isolated because marriages are breaking up more frequently and people are staying single longer, becoming less socially active and moving more often.
As a result, a lot of people are keeping pets for company -- and a lot of them are treating pets as good as or better than they'd treat their families.
Most of our customers still prefer the price-sensitive, 6-ounce cans of nongourmet cat food, but we do see an increase in sales when we promote the gourmet brands.
They hold up well under promotion, because they're not involved in the 4-for-a-$1 price wars that seem to playing out among the other brands.
