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Specialty channels, specialty pet foods - All on recommendation

by Pushan Tagore , 28.05.2014

As the Interzoo trade fair in Nuremberg gears up at the end of May, experts will surely be thinking about trends in pet food.

At GfK, we have recently released the main findings of data for the US pet food market, the largest pet food market in the world.

According to actual monthly sales data from pet specialty retailers in the US during 2013, consumers are increasingly willing to go out of their way on shopping trips to purchase premium pet food products from specialty stores. Furthermore, they are looking for niche nutritional features for their beloved dogs and cats, such as natural foodstuffs or grain-free mixtures.

With the increased “humanization” of pets today, they become true members of the family. People see their dogs and cats as children (of sorts), and are willing to spend on them. During the most recent recession, the pet food category was one of the few to grow.

There are three trends in the market:

Trend 1: Specialty channels continue to grow
First, our data showed that consumers will make an extra effort to buy pet supplies from specialty channels, such as a veterinarian or a pet store. Typically, these sellers focus on premium foods with high margins.

Pet food sales reached roughly 11.8 billion US dollars for 2013 at pet retail stores, veterinary clinics and farm feed stores. They rose at pet retail stores by 6.5 percent, compared to 2012; at veterinary clinics, sales increased by 7.6 percent for the same period.

Trend 2: Focus on "natural," nutritional pet foods
One reason buyers seek out pet-specific channels is their wide selection of specialty mixtures. The data showed that the "natural" food segment continues to grow, as pet owners put a strong focus on wholesome foods for their animals.

We analyzed the monthly sales data and saw brands like Blue Wilderness, Natural Balance, and Taste of the Wild leading the way. We expect other outgrowths of the natural trend to emerge in the coming months.

Natural products boosted category growth at 11.7 percent in 2013, compared to 2012, and were valued at 4.5 billion US dollars (more figures).

Trend 3: Pet owners seek specialty blends of pet food, such as grain free
Finally, some pets suffer from allergies or digestive disorders, and pet food makers have responded with specific blends, including those that help an animal with kidney stones or food-related illnesses. Grain-free (or gluten-free) pet food that is easy for pets to digest is among the most popular specialty blends.

This third finding - that pet owners seek special food blends - is a follow-on from the trend toward more natural foods and driven by high demand for grain-free pet food. Even in non-specialty pet food channels like traditional retail stores, grain-free food is boosting sales.
In 2013, for instance, the GfK data showed a 32.4 percent rise in grain-free dog and cat food sales at US pet stores, worth roughly 1.8 billion US dollars. More than a quarter of all pet food sales are generated by grain-free products.

Recommendations still matter
Separately, another GfK study - PetInsights Consumer Perceived Recommendations 2013 - showed that pet owners still rely on recommendations about what foods to serve their animals.

Dog food recommendations were most likely to come from a veterinary clinic, followed by pet stores and friends and family. Three-fourths of dog owners considered veterinarian advice very influential on their decision to purchase pet food, while half considered the veterinarian's staff very influential.

The study also looked at how often consumers followed brand recommendations.

Brand recommendations from the breeder and veterinarian had fairly high compliance, with about 8 in 10 brand recommendations followed, at least initially. Brand recommendations made online were the least likely to be complied with, although 6 in 10 brand recommendations were complied with, at least initially.

For me, the data sends a strong message to those watching pet food trends, such as the trend toward specialty shops and natural mixtures: Pet food makers need to understand how their investments translate into actual brand recommendations and think carefully about how they allocate their marketing investments to emphasize recommendations - also in the trend areas.

View our infographic “Importance of dog food recommendations in the US”.

For more information please contact Pushan Tagore, GfK’s Director of Pet Nutrition Services, at pushan.tagore@gfk.com.