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Are premium brands still growing in the Dog Food market?

By Chris Elliott

Humanization is the key factor driving the growing Pet Food market. Market research firm Packaged Facts (2017) estimated that the Pet Food market reached $28 billion in 2017, up 6 percent from the previous year.

Pet owners are increasingly viewing their pets as one of the family. This humanization is extending to Pet Food choices with ‘natural’, grain-free and raw frozen food growing in popularity.

This humanization has led to an increase in premium options in the market. Major manufacturers have jumped on this trend with new product launches, Mars Petcare introduced the WILD FRONTIER brand in June 2018, and acquisitions with the J.M. Smucker Company buying Ainsworth Pet Nutrition for $1.7 billion.

 

Are Dog Food choices increasing?

Brand View has reviewed the Dog Food market over the last year to see if it has grown and which retailers are growing the most.

All of the five retailers analyzed saw a growth in the number of Dog Food products in the last year. Pet Supplies Plus had the greatest increase in product range as it had 27.9 percent more Dog Food products at the end of the period.

The number of Pet Supermarket products increased by 21.2 percent. The majority of this increase occurred on 16 April 2018 when it introduced a number of Private Label, Stella & Chewy’s and Whole Earth Farms products.

Chewy had the smallest amount of growth, with its total number of products peaking on 6 November 2017 before declining slightly since.

 

 

Which manufacturers are driving the growth?

Looking at the top ten most-listed brands, only Natural Balance and Iams have seen a decrease in the number of listings. The number of Iams listings declined by 8.1 percent over the last year. This was largely due to Pet Supplies Plus delisting almost half of Iams products.

The number of Nature’s Variety listings grew by 29.1 percent. Pet Supplies Plus again influenced this as it introduced 51 Nature’s Variety products in January 2018. It also grew on the Chewy and PetSmart websites; however, Petflow delisted 14.3 percent of it’s lines in the last year.

Looking at the top ten most-listed brands in each retailer we can see Purina lost share of category in all of the retailers analyzed, with the exception of Chewy where it grew noticeably from a 7.5 percent share to 8.7 percent.

Blue Buffalo had more listings at the end of the period in all retailers except Pet Supermarket. In spite of it’s listings growing on PetSmart, Blue Buffalo’s share fell due to a significant increase in the number of Private Label and Royal Canin products. PetSmart had no Private Label listings on 1 May 2017 but, by 30 April 2018, Private Label accounted for 16.1 percent of it’s Dog Food listings.

 

 

Are shoppers paying more?

Brand View has indexed the average price of Dog Foods products listed throughout the period, excluding products that were delisted or newly listed, to see how the average price has changed over the period.

Chewy, PetSmart and Pet Supermarket all had a lower average base price at the end of the period than the beginning. The average base price in PetFlow and Pet Supplies Plus increased across the period, with Pet Supplies Plus’ average base price increasing by 6.4 percent.

PetSmart had the most significant change in base pricing on 11 September 2017. It reduced the base price of over 800 products across the category.

The average shelf price increased in all retailers, with the exception of Pet Supermarket, where it was 1 percent lower at the end of the period. PetSmart’s average shelf price was 5.2 percent higher at the end of the period, the highest of retailers analyzed, just ahead of Pet Supplies Plus which increased by 4.8 percent.

The promoted price had a similar pattern to that of the shelf price, with PetSmart’s average promoted price 6.6 percent higher than at the start of the period.

 

PetFlow, PetSmart and Pet Supplies Plus all had a higher introductory price per lb than their products that were delisted or continuously listed.

The same three retailers all introduced products that had a smaller average pack size than their existing range. The higher average price, but lower average pack size points to these retailers introducing a more premium range of products.

There was not a significant difference between the average shelf price per lb and average pack size on the Chewy website, suggesting it is not adding as many premium products as its rivals.

 

The growth of the Dog Food market doesn’t appear to be slowing, with all five retailers increasing their ranges over the last year. This benefited premium brands such as Acana, Fromm and Stella & Chewy’s that gained listings in retailers that they did not have a year ago.

Much of the growth came from smaller retailers PetSmart, Pet Supermarket and Pet Supplies Plus. PetSmart and Pet Supplies Plus all had a noticeably higher introductory price per lb than products that were listed for the entire period, showing it was introducing more premium products.

A greater number of premium brands, rising shelf prices in most retailers and growing Pet Food market sales shows that shoppers are willing to spend more on ‘healthy’ and ‘nutritious’ Dog Food, demonstrating the impact of pet humanization.

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