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What E-Commerce Means for the $27B Pet Food Market

It faces ‘enormous headwinds.’

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The $27 billion U.S. retail sales of dog and cat food market continues to grow, but it’s facing “enormous headwinds,” according to market research firm Packaged Facts.

“For pet food, retail, marketing, and new product initiatives are hopping,” says David Sprinkle, research director for Packaged Facts. “And from a merger and acquisition perspective, the past couple of years have been nothing short of dynamic.”

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But as in almost every consumer product category, e-commerce continues to upend traditional retail as more pet owners opt to buy their pet food online instead of, or in addition to, from brick-and-mortar sellers. That’s one finding from the new Packaged Facts report Pet Food in the U.S., 14th Edition.

For pet food, a side effect has been to speed up the dissolution of the pet specialty/mass channel divide that has long helped to justify the “superpremium” prices of brands sold only by pet specialty retailers, according to Packaged Facts.

Specialty retailers have for years bolstered dollar sales absent volume growth by converting pet owners to higher-priced fare. At the core of the premiumization trend have been natural products, including grain-free formulas, which have driven pet food sales growth for over a decade.

Now, however, virtually all pet food brands are available online, accelerating the “mass premiumization” trend whereby pet-specialty-type products are now widely available in the grocery and mass channels, Packaged Facts notes.

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As online sellers including Amazon, Chewy, and Walmart battle it out, including via private labels, the upshot is downward pricing pressure market-wide even as the costs of producing pet food continue to rise.

Since the dog and cat population is not growing enough to provide much of a volume lift, pet food marketers and retailers will have to come up with new and compelling premiumization drivers in order to maintain dollar sales gains, according to the report.

Since launching in 2017, PETS+ has won 16 major international journalism awards for its publication and website. Contact PETS+'s editors at editor@petsplusmag.com.

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US Pet Food Spending Falls to $28.9B

The segment accounts for 37% of total US pet spending.

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Pet food spending in the U.S. fell by 7.3 percent in 2018 to $28.85 billion, according to the Pet Business Professor blog.

The $2.27 billion decrease stood in contrast to 2017, when food spending grew by $4.6 billion “due to a deeper market penetration of super premium foods,” the blog’s John Gibbons writes.

A small increase in pet food spending had been anticipated in 2018. The unexpected decrease “was likely due to the reaction to the FDA warning on grain free dog food,” Gibbons explained, noting: “A pattern of over 20 years was broken by 1 statement.”

Pet food spending has been choppy since 1997, with the general pattern being “2 years up then spending goes flat or turns downward for a year,” according to the blog.

Total pet spending in the U.S. climbed by 1.9 percent in 2018 to reach $78.6 billion, according to the blog. The pet food segment accounts for 37 percent of total U.S. pet spending.

 

 

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Video: Brave Housecat Fends Off 3 Coyotes

This feline showed moxie.

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A cat in the Highland Park neighborhood could have been in serious trouble when three coyotes came along.

But Max, who belongs to Maya Gurrin, showed amazing courage, CBS Los Angeles reports.

Max was surrounded, and the coyotes were nipping at him. But Max showed no fear. He even caused one of the coyotes to back away and jump onto a nearby wall.

“He’s always been crazy,” Gurrin said. “Like, if this were to happen with any cat, it would be him.”

The entire scene was captured on security camera.

As tough as Max may be, his owners have nonetheless decided not to let him roam outdoors anymore.

Watch the video:

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Dogs May Be More Perceptive Than We Ever Realized, Study Finds

Even untrained strays can read human gestures.

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Dogs seem to be able to interpret human gestures even when they’ve had no training, a new study has found.

As any dog owner knows, pet canines understand commands and gestures with ease. A group of researchers set out to determine whether these capabilities are innate or require training, according to a report from Frontiers Science News.

The researchers looked specifically at pointing, with Dr. Anindita Bhadra of the Indian Institute of Science Education and Research Kolkata, India, and colleagues studing stray dogs in several Indian cities.

“The researchers approached solitary stray dogs and placed two covered bowls on the ground near them,” Frontieers Science News reports. “A researcher then pointed to one of the two bowls, either momentarily or repeatedly, and recorded whether the dog approached the indicated bowl.”

About 80 percent of participating dogs successfully followed pointing gestures.

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“We thought it was quite amazing that the dogs could follow a gesture as abstract as momentary pointing,” Bhadra was quoted saying. “This means that they closely observe the human, whom they are meeting for the first time, and they use their understanding of humans to make a decision. This shows their intelligence and adaptability.”

The research was published in Frontiers in Psychology.

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