The success of the past decade in the pet food and pet retailing industries may not be sustainable if the industries don’t pay close attention to coming changes. Dave Bolen, former CEO of several major pet retailers and now a retail consultant, told the opening session of Petfood Forum that “I am worried that our success could be a disadvantage to further growth in the pet industry.”

Bolen said the pet retail industry has grown more than 5 percent per year for the past eight years. He said much of that growth has been driven by increases in pet populations, with the number of dogs rising from 35 million in 1990 to 55 million today.  But he said 2014 was not a good year.

“2014 was a bit of wake-up call,” said Bolen. “The trade-up to specialty foods slowed dramatically and the attack on pricing from online retailers on price grew dramatically.  Are we doing a good job anticipating and leading the future?” 

Bolen said the growth of Amazon as a pet food and pet products retailer is a major concern for the industry. Pet retailers have been slow to develop strong online sales strategies and they are now playing catch-up.

“Amazon is a tough competitor,” said Bolen. “They are taking share from most retailers.  It’s hard for brick-and-mortar stores to compete with margins of online retailers.”

Bolen said online sales are now at 4 percent, but some research predicts that more than double in next three years to 9.4 percent, and they will eventually reach up to 20 percent.

The industry is also facing generational challenges with the aging of the baby boom generation. Bolen said some people are worried that boomers aren’t going to replace their pets as they age. But other surveys are saying millennials and generation X are adding 8 million new pets a year. 

“Many millennials will have a pet as a starter child,” said Bolen.  He said that pet ownership rates of the millennials may make or break the pet industry. “Let’s be sure we have them on our teams.”

 Petfood Forum was held April 27-29 in Kansas City, Missouri, USA, and attracted more than 2,000 professionals from the pet food industry.