Mark Johnson, regional president of Pet Nutrition North America for Mars Petcare, is bullish on the pet food market. “The pet food industry is growing; in the US it’s growing north of 4 percent, globally it’s growing. That’s not the case for many food categories.” Further, he said, the industry and its success are built on trends that will support that growth, starting with societal trends.
“Millennials’ pets are their children,” Johnson added. “The tightness and importance of pets to those people is such, I think you’ll see premiumization continue.” And, in practice, he doesn’t believe it’s anywhere close to reaching a ceiling. “If you look at the US market, this is the most developed dry market in the world. It’s highly underdeveloped still in wet pet food, compared with Europe. So just through the mix of products that people might use in the future, we’ll see premiumization.” He also mentioned treats as having huge growth potential in the US, along with newer pet food formats.
Pet food companies can’t afford not to change
Johnson believes the environment today – not just for his company but for every organization – is the most dynamic he’s ever experienced, and that is having a huge impact on how Mars and other pet food companies do business. “You can’t afford not to change,” he said, at least in part because of changes in the consumer market. “I think consumer attitudes and wants are changing faster because of the availability of data. The digital world and availability of information mean you can access anything you want to incredibly quickly, and it influences what you want. So we’re finding consumers are changing in terms of their needs and wants, driven by that availability of information, by the internet.”
Johnson also cited changes among Mars’ customers, or retailers. “The way people are buying the product is changing dramatically. You’ve got an incredible shift to ecommerce, which is proving a challenge for our customers and for us,” he said. “Just the customer set change: PetSmart buys Chewy, Amazon buys Whole Foods, what’s next?”
Agility is key in a 24/7 world
And change doesn’t stop with retailing. “The pace of business is going up. The need to increase the pace of change is going up. The lead times of things are going down,” Johnson explained. “To launch a product in theory takes less and less time because, for example, if your customer is an e-commerce customer, they can launch a product in 24 hours. That puts pressure on us to try and respond, and be quicker and more agile. The change I’ve seen, and continue to see, is agility. Just the need to be increasingly agile. We’re unfortunately living, or fortunately living, in a 24/7 society.”
Johnson identified this pace of change as the major challenge for business leaders. “Enabling the organization to keep up with the pace of change, enabling the agility that’s required, is the biggest single challenge. Which I think is consistent for all organizations. Anyone I talk to in this space, everyone’s got the same challenge. It’s not new, but it’s still a significant challenge. You have to go back to the fundamentals. The fundamentals are, meet your consumers’ needs and your customers’ needs, and you’ll be fine.”
