For information on the Reportable Food Registry, read Dr. David Dzanis' September column.
For the US petfood industry, 2007 was dominated by the spring petfood recalls and subsequent fallout, while the economic recession overshadowed 2008 and 2009. Challenging years for petfood, in other words, and yet through it all the market has maintained respectable growth. What does the future hold? From the pet market experts at Packaged Facts, here are 10 trends to bet on in 2010.
1. Bang for the buck
While consumers are expected to loosen their purse strings in the coming year, they will likely also continue to apply value criteria they adopted to weather the economic storm. For product marketers and retailers alike, offering more "bang for the buck" by combining money-saving opportunities with additional product benefits will be an essential strategy throughout 2010.
2. Tapping pent-up demand
During the 2009/2010 and 2010/2011 holidays, many US pet owners will be ready for a little splurge, both to make up for lost time and to appease their guilt over having cut back on those pricy biscuits Princess does so adore. Gift and holiday formats will therefore be all the rage, both for functional and indulgence products looking to cash in.
3. Product safety
As part of the Food and Drug Administration (FDA) Amendments Act of 2007, FDA has launched a Reportable Food Registry requiring feed (including petfood) companies to report incidents of adulteration. Given this development and the steady stream of smaller recalls during the past couple years, product safety will remain top of mind in the petfood market in the coming year and beyond.
4. Ethical marketing
Sales of ethical products-sustainable, "green," fair trade, humane, organic, etc.-are forecast to hit US$38 billion in 2009, according to Packaged Facts' "Ethical Products 2009" report. With top petfood players already leading this trend, ethical product marketing and corporate positioning will be a pet market mandate by the end of 2010.
5. Organic and natural
The term "organic" dovetails with most ethical claims, and many consumers view organic products as purer and safer. Thus, although overall US organic sales moderated in 2009 due to consumer cutbacks, the future for organic petfood remains bright, with double-digit annual sales gains expected to continue. "Natural" as a claim still has legs, too, in part because it defines the more nebulous "superpremium" in a way consumers can easily understand.
6. Cause marketing
Cause marketing in the pet market usually equates to support of pet adoptions, shelters, animal rescue efforts and so on, allowing marketers and retailers to simultaneously help pets and build consumer goodwill. Despite Americans' heightened price sensitivity, expect cause-related marketing to pick up even more steam in 2010 since it represents a potent way to help pet owners justify less essential expenditures.
7. The pet specialty gauntlet
The economic recession coupled with the relatively low gas prices of the past several months has been a perfect storm for Walmart. Combine that with the company's "same brands as pet specialty but better prices" advertising push, and the writing is on the wall. Packaged Facts believes the brightness of the pet specialty channel's future is closely linked to its ability to brand itself as the pet health channel and weed out brands that blur channel lines. Also, look for new spins on private label, including:
8. Thinking small (animal)
During 2010 pet retailers will look to attract those households that may be holding off on larger animals while still wanting to keep the kids happy. Promoting small animals, birds and reptiles also makes sense from a longer-term market perspective, since these animal types are often the market entry point for lifetime pet owners.
9. Consolidation via acquisition
Directives issued recently by Procter & Gamble CEO Robert McDonald have placed (once again) Iams in the divestitures speculation spotlight. The acquisition of Iams by Del Monte would put the latter company in a dead heat with Mars for the number two spot in the US petfood market, while a Mars acquisition of Iams or Hill's would put Mars within swinging distance of NestlÃ© Purina in the US.
10. Spotlight on human health
During Petfood Forum 2009 in April, Marty Becker, DVM, author of The Healing Power of Pets , documented some of the many amazing positive effects of pet ownership on human health. This correlation is also a thrust of the American Pet Products Association and the Delta Society. By the end of 2010, this message will begin to make its way into major media advertising citing scientific studies, giving pet ownership and the related products a sizable boost.