Online sales growth of pet food and treats continues rapidly on Amazon, benefiting smaller brands over the titans of brick-and-mortar retail shelving, according to analysis by Profitero in the report “The Amazon Playbook for Pet Brands."
Growth by category of pet product on Amazon
Profitero’s analysts broke down growth on Amazon by category. Cat treats saw the most growth from 2018 to 2017 with 24.9%. Dog food followed closely with 23.8% sales growth. At 19.6%, dog treats increased in sales on Amazon by a bit more than cat food, which grew by 15.2%.
Amazon may benefit smaller pet food brands
Pet food and treat brands with between US$500,000 and one million in annual sales on Amazon saw dramatically higher growth than brands with more than US$10 million. For example, EcoKind Pet Treats grew 815% compared to 35% growth by Royal Canin.
Other small brands that saw dramatic growth included Lily’s Choice with 415% and Brazilian Pet with 144%. At the opposite end of the spectrum, Iams’ sales increased by 34%. Likewise, J.M. Smucker pet food brand Rachel Ray’s Nutrish grew by 56%.
In the middle range of overall Amazon sales, from US$1 million to US$10 million, pet food brands grew moderately. Zesty Paws increased sales by 248%, while Acana grew by 166%. Another mid-size brand, Pawstruck grew by 124%.
E-commerce helps US dog, cat food sales hit US$27 billion
Retail sales of dog and cat food in 2018 may have risen 4.3 percent over 2017’s total to reach US$27.15 billion in the United States, wrote Packaged Facts analysts in "Pet Food in the US, 14thEdition.” Online sales of pet food served as a major driver for overall industry growth in 2018. However, e-commerce continued to chip away at brick-and-mortar retailers’ share of the market, and now threatens established brands with private label pet foods from Amazon and Chewy.
Amazon, Chewy private label pet foods threaten profits
Part of the way internet retailers gain market share is by producing their own brands of dog and cat food. Packaged Facts analysts agreed with an earlier report that private label pet foods from Amazon and Chewy threaten established brands by leveraging their online sales platform to boost visibility.
As more pet owners look to purchase pet food over the internet, online retailers increasingly have opportunities to boost exposure of their own brands by featuring those dog and cat foods in sponsored advertisements, on homepage displays and through other means, wrote Gartner L2 analysts in the report “Digital IQ Index: Pet Care U.S. 2018.” The ability of online retailers to undercut premium pet foods with their own brands threatens the profitability of pet food premiumization, which currently drives pet food sales value growth while volume growth stagnates.
