The economy and financial concerns seem to have significantly impacted the recent U.S. presidential election. Voters who based their choices on that issue likely considered all the higher prices they’ve been paying for a few years now, but recent pet food data may offer a representative sample of the pain expressed by these voters, particularly those who own pets.
In its latest report, “Pet Food in the US, 18th Edition,” Packaged Facts framed the issue from pet owners’ perspectives: “Pet food has proven itself to be amazingly resilient in both this and previous economic crises, and pet food’s position as a non-discretionary item has spared it many of the cutbacks seen in the non-food pet supplies sector,” it read. “However, Packaged Facts’ survey results suggest that over the past two years, a growing share of pet owners have cut back on pet food spending. Value is key, as pet owners are seeking products that provide high quality at a lower price point.”
Concerns over food, pet food prices
According to a July-August 2024 survey by Packaged Facts, 70% of U.S. pet owners are concerned about high prices for pet food, the report showed, with 33% saying they’re very concerned and 37%, somewhat concerned. While those figures are lower than concern over prices for human food — a full 55% are very concerned, while 27% are somewhat concerned, for 82% total — the pet food data speaks to its status as a “non-discretionary item,” as the report put it.
Of course, human food is a non-discretionary purchase, too, so it’s no surprise that more people are worried about both categories of food prices than they are about ones for more discretionary categories such as human beverages (64% total), pet medications (61%), non-food pet supplies (56%), and pet supplements and treats (both at 55% total).
The report projected U.S. retail sales of dog and cat to top US$54 billion by the end of this year, a 4.5% increase over 2023. Packaged Facts characterized that as a “significant slowdown in pet food growth” after four consecutive years of double-digit growth at a compound annual rate of 13%, fueled first by premiumization, then pandemic pet population rises. Still, 4.5% is a pretty healthy growth rate, one that many other consumer goods categories would probably love to experience.
Yet, due to pet owners feeling the pinch of higher pet food prices, the 2024 outlook is less bullish. “Packaged Facts expects 2024 growth to be tempered by the continued challenges to dog ownership and the compounding economic pressures experienced by pet owners overall,” the report said. “Because pets require a regular amount of food on a regular basis, and because elevated pet food prices have persisted despite a slowing of inflation, any reduction in spending will almost certainly be due to pet owners purchasing lower-priced products rather than on purchasing less food.”
How many pet owners are switching to lower-priced foods?
Indeed, other recent data backed Packaged Facts’ comments, showing U.S. pet food unit and volume sales growing slightly yet at greater rates than value (dollar) sales growth, according to a presentation during KibbleCon 2024 by Chris Storves, director, North America retail, pet industry, for NielsenIQ (NIQ). The value sales growth rates have also been small for the past six months. (Pet food prices in the U.S. are now actually declining monthly on a year-over-year basis, but compared to 2021, they’re nearly 23% higher and almost 24% higher than September 2019, pre-pandemic.)
Earlier in 2024, a survey of 945 pet owners in Canada, France, the U.K. and the U.S. by Yummypets, an online pet community based in France, and Pets International magazine indicated U.S. pet owners are among the most likely to have decreased spending on pet food, treats and toys due to financial constraints. Of the U.S. respondents, 43% said they had done so, compared to 40% for Canada and 29% for France, for example.
In addition, nearly half (48%) of all respondents reported that the economic situation influenced their decisions about switching to lower-priced pet foods, with respondents in North America (U.S. and Canada combined) more likely, at 54%, to have considered switching or to have actually done so.
