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Pet Food Market Trends
On July 31, 2013

US pet owner spending: Behavior versus attitude

With US pet owners, is it best to follow what they spend, not what they say?

After the Great Recession, it was not surprising to see growth of petfood sales in the US reach only 2.8% in 2010. While any growth was positive, especially considering how the global economy was faring overall, that was down from 6% growth just three years before and 8.3% in 2002, according to Packaged Facts.

Also not surprising was the type of sentiments expressed by pet owners post-recession. For example, in Packaged Facts' 2010 US pet shopper survey, 34% of respondents agreed with the statement, "I am spending less on pet products these days because of the economy."

Here's the surprise : When Packaged Facts included that same statement in its 2013 US pet shopper survey, the number of respondents expressing agreement was actually a little higher, 35%. Yet, the US pet industry is on track to grow 4.7% this year, with petfood sales alone increasing 5%.

What's more, sales are rising in US channels that tend to feature higher-priced petfoods, such as where natural, gourmet and specialty foods for humans are sold; dog food sales increased by 10.5% to 24% in 2012 (depending on the exact type of retail outlet) and cat food by 8.5% to 30%. Conversely, sales of petfood in US mass market channels, where mid-priced and economy products reign, are flat, according to Packaged Facts. (For more information, see p. XX.)

Why the discrepancy  between pet owner sentiment and spending? Perhaps new research can shed some light. In 13 key segments tracked by Mintel, US consumers say they are spending more in only two: in-home food, up 14% according to respondents, and household care, up 2%. Yet Mintel's data show that consumer spending has, in fact, increased in all 13 segments, anywhere from 1.3% (for personal finance) to 7% (transportation).

"Although the country officially exited recession nearly four years ago and consumer expenditures are up, Americans retain a cautious approach toward purchasing and avoid conspicuous consumption," says Fiona O'Donnell, lifestyle and leisure analyst with Mintel. "It is also likely that consumers' attitudes have shifted. Rather than having pride in purchases and all things 'new', consumers now appear to take pride in their ability to cut costs, find deals and pay lower prices than retail."

For example, 66% of US consumers say they spend money more cautiously than they did five years ago, with 68% saying they are now more likely to pay attention to prices. Further, 59% conduct price comparisons, 54% say they buy only items they need and 53% use coupons more often.

Petfood or pet  care are not among the segments tracked by Mintel; yet interestingly, Packaged Facts' research turns up similar purchasing attitudes among pet owners. Besides those saying they are spending less on pet products, 55% say the petfoods they buy are "average priced," with another 14% reporting purchasing petfoods below average price. Similarly, 68% of US pet shopper survey respondents say they watch for lower prices, sales and special offers. Usage of money-saving coupons for petfood has continued to rise since 2006, when 29.8% of respondents to the Experian/Simmons national consumer survey reported usage; that figure hit 33.7% in 2012.

"In many categories, consumers have been conditioned by a nearly never-ending cycle of sales, coupon offers, members-only discounts, lower-priced product alternatives, etc., to avoid ever paying full price," O'Donnell says. "Meanwhile, technological advancements and mobile technology's increasing penetration have made price comparisons and strategic shopping more accessible. For these reasons, marketers should not expect a swing back to pre-recession impulse buying habits."

While frugality likely was prompted by recessionary cutbacks, she adds that its "lingering popularity shows consumer behaviors and priorities appear to have changed, and the focus has turned more inward." Inward to the home, where pets are, is good news for petfood marketers—just remember that value and price sensitivity may be still be front of mind for pet owners, despite what their spending habits might indicate.

See more

Packaged Facts' David Sprinkle discusses US petfood spending at www.petfoodindustry.com/48221.html .

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