On April 9, 2014

Superpremium sales potential through veterinarians

Number of pet owners who buy petfood through vets is growing, say data

Veterinarians' pet health and wellness expertise and ability to recommend products have yet to be leveraged to full advantage across much of the pet products market. Although the level and sophistication of pet product retailing varies from one veterinary office to the next, such efforts will typically be anchored by high-grade foods, with a focus on specialized diets. This business got a push back in 2011 when the American Animal Hospital Association (AAHA) and the World Small Animal Veterinary Association released guidelines calling for the nutritional assessment of pets as part of routine physical examinations, making nutritional recommendations the "5th Vital Assessment" in pet healthcare alongside temperature, pulse, respiration and pain.

Even so, nutritional therapy is still a relatively new concept, and the therapeutic petfood segment is capable of significant growth as traditional veterinarians become more enthusiastic about recommending specialized foods, as holistic veterinarians routinely do. Moreover, the growing range of petfood delivery services, and particularly subscription deliveries, could be a perfect fit and logistics simplifier for veterinarians and for their pet parent and dog and cat clients alike.

Purchasing pet products through  veterinarians may be back on the upswing after notching downward in previous years, according to Packaged Facts' upcoming Pet Market Outlook 2014-2015, based on Simmons national consumer survey data from Experian Marketing Services. In absolute numbers, according to these Simmons data, nearly 8.9 million dog or cat owners are buying pet products from their veterinarians. Among multi-pet owners with dogs as well as cats, in particular, the percentage who buy pet products through vets has rebounded to 19% (see Table 1).

It's not surprising, given the discretionary nature (and discretionary spending) of keeping pets and providing them with professional veterinary care, that there is an upscale skew to those who buy pet products through their vets. According to Simmons data, one-third (33%) of those who buy pet products at vets have a household income of US$100,000 or more, compared with one-fourth (26%) of pet owners overall (see Table 2). More than 15% of pet owners who buy vet products have a household income of $150,000 or more, compared with less than 10% of U.S. households overall.

Data from Packaged Facts' January/February 2014 Pet Owner Survey confirm that those who buy pet products through their veterinarians spend more on pet care: half (50%) of these vet shoppers spend $50 or more on pet products monthly, compared with one-third (32%) of pet owners overall (see Table 3).

These higher-spending pet  parents are prime prospects for high-grade petfoods that their personal veterinarian recommends for their individual pets. Leading marketers such as Hill's, Mars/Royal Canin and Nestlé Purina have made the veterinary channel a big focus in recent years, offering formulas that feature advanced ingredients and target specific lifestages or health conditions such as digestion, weight control and joint health.

This marketing push is both fueling and being fueled by growing interest in targeted nutrition among veterinarians in general. Factor in the spread of consumer-friendly, easily Internet-managed subscription delivery services for packaged goods of all types (see Amazon's "Subscribe & Save"), along with an aging and urbanizing population, and you may have a perfect recipe for the future for superpremium petfood retailing.

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