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On February 1, 2013

Sustain petfood growth by connecting to emerging consumer groups

Strategies for marketing to Baby Boomer pet owners won’t necessarily work with GenX, GenY and other emerging consumer segments

While pet ownership and petfood sales are both growing briskly in many developing regions, such as Latin America and Eastern Europe, and in individual countries like Brazil and China, developed markets have seen slow to no growth in recent years. Can longtime pet powers like the US return to previous growth levels?

A new report from the American Veterinary Medical Association (AVMA) indicates uncomfortable answers to that question. The US Pet Ownership and Demographics Sourcebook (2012) shows that Americans owned fewer cats and dogs at the end of 2011 than in 2006, the last time AVMA conducted the survey. Specifically, in 2011 Americans had 70 million dogs (36.5% of US homes), down from 72 million in 2006, and 74 million cats (30.4% of US homes) compared to 81.7 million in 2006.

Now, those numbers don't match up with data released by the American Pet Products Association (APPA) last year in its biannual APPA National Pet Owners Survey, 2011-2012. That report showed the US had 78 million dogs and 86.4 million cats as of 2011, and both numbers represented slight increases from the last APPA report released in 2010. Without knowing the methodology behind each survey, it's impossible to explain the discrepancies. But the emphasis with APPA's increased numbers is on slight: only a 1.5% rise for dogs and 1.8% for cats. Those types of gains are not going to help move much more petfood.

The sluggish economy, of course, is the main culprit behind lagging or slow-growing pet ownership in markets like the US, but demographics are playing a significant role, too. As the huge Baby Boomer population continues to age, reports such as AVMA's and one last year from Experian Simmons show people over age 65 are among the least likely to own pets. Even older people who have always owned pets seem reluctant to replace them once they die or to add any pets.

Another demographic concern, according to Leslie May, owner of pet consultancy Pawsible Marketing, is the traditional pet product buying segment of women age 25–55 is starting to decline. "Within the general population, the number of women aged 35–45 has been declining over recent years," writes May on her blog. "In addition, the number of women ages 15–34 has been leveling and/or slightly declining in recent years."

It stands to reason then, says May, that the next generations of pet product consumers will be more male and fall into the groups known as GenX (currently 31–51 years old) and GenY (presently 8–30 years old). She doesn't address ethnicity, but US demographic trends also indicate fast-growing groups like Hispanics and, to a lesser extent, Asian-Americans, could be prime pet product markets.

To help marketers  of pet products, May refers to a study from the Ethics Resource Center on the behaviors and characteristics of GenX and GenY vs. those of Baby Boomers. Strategies of appealing to Boomers' sense of their pets' entitlement and "idealist vision of pets as four-legged family members, pushing loyalty," May summarizes, won't work with younger generations. Because they tend to be more cynical and less loyal, marketing needs to prove a product's worth, show what's in it for the pet owner and be communicated quickly, pointedly and visually using technology such as social media and the Internet.

At a conference last fall, Jim Adams, managing director of Venture Catalysts, presented similar information about the need to connect to emerging markets—not just GenX and GenY but also GenZ and "new Americans" (immigrants or their children). Adams will address these consumer segments, along with emerging geographic regions, at Petfood Forum 2013 (see p. XX).

Learn more

For more on the AVMA sourcebook, visit www.petfoodindustry.com/47749.html.

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