Pets getting picky with their food
Almost 60% of Australians have bought Pet Food in the Supermarket which is a good reflection of pet ownership. Pet Food in grocery is a $2.4 billion category and includes cat, dog, birds, rodents, litter and pet accessories sales. Dog has the largest share of sales, worth $1.8 billion growing at 9.9%, which is almost 3x ahead of Total Supermarket. The growth is driven by the good care we give to our furry friends as we see an increase in fresh and premium ingredient purchases.
Fresh Is King
As a shopper, you may have noticed a transition in the Pet Food aisle in the last couple of years with the addition of the chiller. This was a gesture from the big 2 retailers of their support to the continual growth of fresh pet food. A part of pet food that is now worth $270 million, contributing a large growth of 9.4% in the last MAT period.
Fresh has become an ingrained trend in consumers over the last few year that pet owners have come to adopt this trend for their furbabies, realising that fresh pet food is better for their pets compared to their shelf stable counter parts. The Real Pet Food Company has capitalised on this trend in the early years, and secured the no.1 spot as the main supplier of fresh pet food, amongst the brands most well-known are Nature’s Gift and Nature’s Goodness.
That is not to say that dry and canned pet food no longer holds relevance, contrary to the trend they make up 70% of pet food. It is simply that fresh pet food is a primary driver of the growth of total pet food.
As our pets become our family, we tend to treat them as such. This means premium quality matters.
Shoppers recognise that pet specialty stores offer high quality pet food, so it comes as no surprise that it has gained a dollar growth of 13.5% in the last MAT period. Despite pack sizes getting smaller within pet specialty stores, we are seeing more shoppers moving into the pet specialty space from grocery supermarkets to get more premium quality food for their furbabies.
Pet owners still find quality in grocery pet food. Pet food brands with natural claims are amongst the most popular, with natural pet food selling an additional $85 million in the latest MAT. Scientific pet food is also growing in relevance with a growth of $22 million, these are products that help pets with digestion, dental, bones, and weight.
Pet owners are happy to spend the money on their furbabies when they recognise the benefits to their pets.
The Impact of COVID-19
Looking forward, the COVID-19 crisis might put a hold on premium and fresh purchases as a portion of shoppers will look for savings or might prefer to stock-up on longer shelf life products such dry and wet pet food. However, the decline in sales will be partly offset as pet ownership has increased during lockdown. If things return to normal then we will continue to see human trends such as health, portion control and sustainable packaging become more prevalent. As Coles and Woolworths continue to install more chillers in store we will see continued growth in fresh. Brands that will offer an affordable healthy range will win in this space.
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Jan-Willem Verstraten (IRI, Lead Consultant) & Candice Huang (IRI, Senior Associate Consultant)