Niche Brands, New Formulations and Variety Driving Premium Pet Food

Sales of premium pet food are up. As American consumers become more interested in reading labels and eating clean, it’s no surprise that they’re looking to do the same for their household pets.

“Pet parents are continuing to expect better-quality dog and cat food. In particular, they’re looking for products with fewer artificial ingredients, more protein and better vitamins,” says Joe McQuesten, SVP of fresh and center store merchandising for SpartanNash, Grand Rapids, Mich. “This trend started many years ago and continues to grow because pets are our family. That’s why it continues to be critical to continue to expand higher-quality pet food.”

What’s really resonating with customers, he says, is high-quality and a 100% natural ingredient list, more than organic offerings. Even traditional brands “are beginning to add 100% natural options or switching all of their recipes to natural formulas,” McQuesten says.

Photograph courtesy of SpartanNash

Gee Zaran, category manager for Chandler, Ariz.-based Bashas’, concurs. “Consumers now more than ever are reading labels and making educated choices based on ingredients and quality,” he says. “Organic and grain-free labels have not made a huge impact on purchasing, but overall, clean ingredient lists and flavor variety is important.”

Flavor assortment is essential as owners look for their pets to have enriched lives in more ways than one. “Customers are looking for more than just beef and chicken options for their pets,” Zaran says. “They’re interested in exotic flavor combinations—things like herring/egg/sweet potato, salmon/brown rice, salmon/whitefish/olive oil for cats. In the dog world, it’s appealing flavors such as salmon meal/sweet potato, lamb and potato, or pork/peas/wild boar.”

Zaran is also seeing different types of food. “The biggest changes are in cat food, where the explosion is taking the business by storm. Soups, broths and warm-and-serve cat foods weren’t around five years ago,” he says.

And pet owners—sometimes known as “pet parents”—are unconcerned about the cost of these premium brands. In 2018, 36% of people surveyed said they were willing to pay more for pet food products that are healthier for their pets, according to Packaged Facts, Rockville, Md.

“A greater degree of transparency on the part of pet food marketers will be key to winning and keeping pet owner trust, with clean labels that tout ingredients sourced in a safe, sustainable and ethical manner playing a big part in pet owners’ decision-making process,” says David Lummis, pet market analyst for Packaged Facts.

And with pet food sales increasing by 6% in the past year, according to Nielsen, there’s plenty of opportunity for retailers, especially in dog food. Dog food accounts for 67% of sales in all retailer outlets, while cat food accounts for the remaining 33%, according to Packaged Facts.

Niche Brands

To meet the need for premium products, SpartanNash is starting to bring small brands into the pet treat category, which is helping drive sales. “We’re also starting to see smaller companies engage with retailers to get on the shelf, because more and more customers are asking for more natural and better-for-you pet food,” McQuesten says. “In some respects, these smaller companies are able to adapt more quickly to what our customers are looking for, and we’re excited to partner with them to deliver those cutting-edge and trending products.”

Small brands are also gaining ground at Bashas’. “It’s important to stay on trend with boutique brands that are well-known in the digital space or in pet specialty stores,” Zaran says.

To capitalize on this, large consumer packaged goods companies are looking to get in on the action. In 2018, General Mills purchased Blue Buffalo Pet Products for $8 billion, the same year that J.M. Smucker acquired Ainsworth Pet Nutrition.

Evanston, Ill.-based Merrick Pet Care, which is sold in the specialty pet channel, launched two lines for natural grocery stores such as Whole Foods Market and Sprouts Farmers Market—Castor & Pollux Organix and Castor & Pollux Pristine—“because pet food trends tend to follow human food trends,” says Jilliann Smith, director of communications for the brand.

“Consumers are looking for transparency for everything,” she says. “They want to see ingredients they eat themselves, recognize and know.” And it goes beyond ingredients, she says. Shoppers want to know the meat they’re feeding their pet was responsibly raised, with fresh air and room to roam. The company illustrates this with photos of the farms and ranches it sources from.

“A lot of people look at the first ingredient, and we pride ourselves for starting with meat, fish or poultry,” Smith says. “You’ll see that across the Merrick portfolio. The first ingredient is always a high-quality protein.”

Photograph courtesy of Stew Leonard

Purina is getting into the niche brand game too. “The move toward ‘better for you’ has translated to ‘better for your pet,’ ” says Joe Toscano, VP of trade and industry development for Nestle Purina North America, St. Louis. The brand’s Purina One line has no artificial colors, flavors or preservatives, and real meat is its No. 1 ingredient; its Beyond line allows consumers to trace their ingredients back to its country of origin.

The more specific companies can be with their premium pet food, the better. Portland Pet Food Co. in Oregon offers dog food made with hormone-free chicken, pasture-fed beef and local turkey and no more than 11 recognizable ingredients. It even offers treats made with repurposed spent grains from nearby breweries and boasts “no artificial anything.”

Gott Pet Products in St. Francis, Wis., offers cage-free turkey and “absolutely no China-sourced ingredients” in its Hounds & Gatos line for cats and dogs. The products have no grains or fillers such as peas, potatoes and lentils.

Purina took things a step further with its Just Right for Dogs brand, which launched in 2014 and recommends a nutritious dog food tailored to a customer’s pooch. “Consumers come to Just Right for a variety of reasons, but we hear most often that they like being able to choose the benefits and ingredients in the food,” says Toscano, adding that interest in personalized pet food options is up. 

In 2018, Petco announced it would stop selling pet food with artificial ingredients. It also partnered with Los Alamitos, Calif.-based Just Food For Dogs to offer fresh, small-batch, human-grade food for dogs from exhibition kitchens, the first of which opened last May in New York City. Petco plans to open more of these nationwide over the next four years.

Merchandising Details

While product assortments are changing, merchandising is not. Refrigerated Freshpet products are front and center at Bashas’ stores, and the remainder is merchandised by brand, with some sorted by functionality or type, such as puppy, indoor cat, adult or senior.

SpartanNash merchandises by tier and brand. There’s ultrapremium, superpremium, premium and value; within each tier, food is merchandised by brand, so “if a customer wants a specific brand, it’s easy to find,” McQuesten says. “They can also shop the section easily if they’re not sure what they want to buy, because merchandising by tier allows them to easily see all the offers for what they want to feed their pet.”

Endcaps are useful for pet food, and Smith says Merrick ran a successful endcap promotion with Whole Foods. “We’ve been able to raise awareness for the pet food offerings within the store. By creating the awareness that it’s available there, and you can pick up pet food while you’re there, has helped in those natural grocery stores,” she says.

“Have a dedicated pet endcap to tell your shoppers you’re in the pet business,” says Toscano of Purina. “Highlight the ultra/natural products to show consumers you have the type of products they need.” What’s more, he adds, showcasing pet items every week in circulars allows grocery retailers to demonstrate they’re ferociously committed to the pet category.