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The Year Of The Pet

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2014 may be the Year of the Horse in the Chinese calendar, and while horses can be considered pets, I’m pronouncing 2014 the Year of the Pet. In 2012, there were an estimated 157,141,000 dogs, cats, birds and horses in the U.S.

Rick Rusch
Rick Rusch

So why do I think 2014 should be the Year of the Pet?

Here’s why:

• First, we started the new year with Budweiser’s “Puppy Love” commercial receiving the top ranking in USA Today’s Super Bowl Ad Meter.

• Next, the pet industry market size has grown steadily—even through the recession—at a steady clip of 4 percent to 6 percent since 2008. Total growth from 2008 at $42.2 billion to 2013 at $55.53 billion was $13.3 billion or 31.5 percent.

• Then according to the American Pet Products Association, pet ownership will increase from 82.5 million pet owners in 2013 (that’s 25.6 percent of the total U.S. population) to 92 million pet owners in 2018 or 27.5 percent of U.S. population.

OK. I agree these are interesting but somewhat unrelated statistics. However you slice them, though, they point to continued growth for retailers selling products for pets.

While the numbers look good, not all pet retailers have prospered. During the past five years, only supermarkets, mass merchandisers and large retailers benefited from the slowing economy, as they could offer discounted prices and the convenience of one-stop shops. The outlook continues to look favorable for grocers.

Favorable outlook is one thing; how grocers leverage this favorability is another. Knowing pet trends are invaluable when it comes to leveraging this opportunity.

Four Pet Trends Every Grocer Needs to Know

1. Pet Food Continues to Grow—Pet food sales will increase 4.5 percent from 2013 to $21.99 billion.

2. Part of the Family—According to a Packaged Facts survey, 83 percent of pet owners consider their pet to be a member of the family. With more and more families humanizing their pets, the sales of non-traditional pet products, reminiscent of products we ourselves use, are on the rise. These products include pet supplements such as fish oil, human-grade pet food and luxury products. Nearly 70 percent of owners say they will spend more money to ensure the wellness of their pet. This sentiment will definitely continue to boost the pet industry throughout 2014.

3. Older and Younger Pet Owners—Two strong demographic trends support the continued growth in pets being treated like humans: (1) Baby Boomers are turning to pets as family and friend substitutes as they age; and (2) growing numbers of younger singles and childless couples are also turning to pets.

4. Made in the USA—While a concern for a while, the 2013 recalls of Chinese-made pet jerky amplified the situation to a point where it is driving consumers’ purchasing decisions.

There they are—four trends that will make you a better merchant when it comes to pets.

But trend awareness alone is not enough. The competition for pet dollars has never been greater. Pet superstores, mass retailers, the internet and a sluggish economy have created a pet shopper that demands value and is willing to channel-surf to find the best deals.

According to Packaged Facts’ U.S. Pet Market Outlook, 2013-2014 report, pet consumers’ loyalty to a particular channel has been waning for the past several years. In 2006, 53 percent of pet shoppers claimed to be channel-loyal, the report states; that number now hovers around 43 percent to 44 percent. For supermarkets specifically, channel-loyal shoppers dropped from 34 percent in 2008 to 28 percent in 2012.

So how do grocers create loyalty among pet product consumers?

Grocers Have Huge Upside in These Five Pet Trends

Grocers have an even greater opportunity to create consumer loyalty. The newest trend lands firmly within the four walls of your store. Many of the top human food trends have found their way into the pet food market—particularly those that focus on the health and wellness.

1. Better Health Through Nutrition—This is a significant topic these days in the human food industry. Sugar, in particular, is a red flag for some consumers and is being linked to systemic inflammation, which in turn can lead to cardiovascular disease, diabetes, cancer and a whole host of other medical ailments.

Gluten-free is now a mainstream idea and products sell, and that has led to the desire for alternative ways to gain the nutritive benefits of whole grains, nuts and seeds. This trend is just as significant in the pet food sector, where companies are coming out with grain-free dog and cat food and treats, products that boast no added sugars (or dyes or artificial preservatives) and products rich in nutrition additives like omega-3s.

2. Weight Management—This is another trend prominent in human food that has made its way into the pet market. According to the 2012 National Pet Obesity Awareness Day Survey conducted by the Association for Pet Obesity Prevention (who knew there was even such an organization?), 36.7 million U.S. dogs (52.5 percent) and 43.2 million cats (58.3 percent) are overweight or obese. With these numbers comes a rise in type 2 diabetes cases in animals.

It’s not uncommon for overweight people to have overweight pets. Diet and exercise play a major role in weight management for both the pet and its owner.

3. Senior Nutrition—Driven by Boomers, senior -nutrition is a prominent in both the human and pet worlds. There’s obvious crossover between the human and pet -aging. Bone degeneration, immune system functionality and cognitive function and decline are just a few that both markets are focusing on.

4. Information on the Go—There’s an app for that. Owners of overweight dogs and finicky cats are turning to their mobile devices to monitor and regulate their pets’ nutrition and exercise. Smartphone and tablet apps are available to track pet activity levels, calorie intake and overall health. Some are also providing data and collecting real-time information for pet owners to share with their veterinarians.

5. Social Causes—Brands reach consumers through cause initiatives. A full 62 percent of U.S. consumers -appreciate and want to support companies that donate to social causes.

Action Steps for Grocers to Make the Most of Their Pet Category

• Your pet food aisle can no longer be dominated by a couple of brands. Broaden your selection to include products appealing to consumers’ dietary interests. You’re likely on top of that elsewhere in your store.

• Evaluate the location of your pet food. Is it in the same aisle as cleaning and laundry? If so, you may not be sending the proper message about the importance of pet food.

• Have you allocated enough space to the category to create a destination for pet owners in your store? Consider centralizing refrigerated pet foods, toys and other accessories right with the traditional dry and canned foods. With the exception of food and perhaps cat litter, pet products are generally more of an impulse purchase. The better your pet destination is merchandised, the more likely you are to capitalize on consumers’ impulses.

• Keep your product assortment fresh. The impulse response increases with new and different products.

• Include a section for pets on your website. Pet owners crave information about how to care for their pets. Most of your suppliers have a wealth of information available to grocers.

• Include pets in your social media efforts. Customer-supplied pet images are an easy and free source of content.

Grocers are in a great position to make the most of the Year of the Pet. Look at the products or categories that are growing fastest within the rest of your store. Look to wholesalers and distributors who mirror those products with versions for pets. Merchandise your pet products into a destination within your store. And have a great Year of the Pet!

Rick Rusch is CEO/Partner of Denver-based Thought-Tech LLC. Thought-Tech guides clients in all aspects of branding, marketing and selling. The firm specializes in strategic and innovative solutions in product development, brand -formation, product-launch and online marketing for retailers and wholesalers alike. Rusch can be reached at [email protected] or 303.396.5123.

 

 

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