As premium pet food brands enter grocery channel, sales grow

Shoppers primarily purchase pet food at mass and pet retailers, and shopping for pet needs at several retailers is common, according to a new study from sales and marketing firm Acosta.

The report, “Pets Are Big Business,” provides insight into pet ownership by generation as well as purchasing habits and factors that drive decision-making when it comes to pet food.

“Pet care is a rapidly growing $75 billion industry (including veterinarian care), with pet food sales up more than 6% versus last year,” said Colin Stewart, executive vice president, Business Intelligence at Acosta. “With this growth, we’re seeing spending behaviors shift to reflect more hassle-free buying options and more interest in healthy options for their pets that include real, natural ingredients. As pet ownership continues to soar, retailers should capitalize on industry growth by honing in on their competitive advantages and competing from all directions — price, assortment and convenience.”

With this growth, spending behaviors are shifting: Brick-and-mortar retailers that sell pet products are still key, with $17 billion spent on pet food in these channels, but shoppers are rapidly changing their behaviors to reflect more hassle-free options. In fact, 54% of Millennials have purchased pet supplies or food online, driven by the benefits of convenience, price and assortment. Premium brands are also entering grocery and mass retailers — fueling growth while also attracting buyers with mainstream prices.

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The study noted that one in five pet owners have changed their buying behaviors to reflect more convenient options. Top reasons for Millennials to change where they shop for their pets include convenience (49%), price (31%) and assortment (17%). “Changing brands is more common than changing retailers,” the report notes, “and dog owners that shop most often online are least likely to change.”

Acosta notes that pet owners primarily purchase pet food at mass and pet retailers, and shopping for pet needs at several retailers is common. Thirty-two percent of dog owners reported shopping at four or more retailers.

In the past year, grocery retailers have grown pet food dollars ( 5%), while food sales for pet retailers are in decline (-1.7%). “This is primarily due to premium brands entering grocery stores,” said Acosta, “making it more convenient for pet owners to purchase food there and saving them an extra trip. Another contributing factor is that pet food prices at grocery retailers are often comparable or lower than pet retailers.”

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E-commerce is surging with 54% of Millennials purchasing food and supplies for their dogs online in the past year, and 45% of Millennials doing so for their cats. Compared to last year, online pet food sales are increasing but penetration is low at 9%. Household penetration is down across key brick-and-mortar channels.