Adventures in Pet Food

Debbie Phillips-Donaldson, editor-in-chief of Petfood Industry, shares her insights and opinions on all things pet food, addressing market trends as well as news and developments in pet nutrition, food safety and other hot topics for the industry.
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Conscious consumers: shoppers more driven by value, claims

It’s become a maxim, if not cliché, that life and business as we knew them pre-COVID will never return completely to that state. Some significant areas, like consumer spending and shopping habits, may be permanently altered, according to recent surveys.

The question is, how have consumer habits changed, and which changes will stick? The answers vary somewhat based on which source you consult and believe. Regardless, they could spill over into pet food, even as the market continues to thrive.

Anxiety and health concerns impacting purchases

“Half of all global consumers say their spending habits have changed permanently due to the pandemic,” read the stark headline from one of the recent reports, based on a changing consumer priorities study conducted by AlixPartners, a business consulting firm. “A year and counting of profound disruption to normal life has had a lasting impact on how people around the world live and act,” a statement continued.

Specifically, among more than 7,000 consumers from nine countries polled in late January 2021, an average of 48% said COVID-19 has changed their buying habits permanently. The countries represented include China, France, Germany, Italy, Japan, Saudi Arabia, Switzerland, U.K. and U.S., and the lasting change in behavior ranged from 40% in Saudi Arabia to 60% in Japan. In the U.S., it was at 43%.

Looking at 15 consumer sectors, AlixPartners mapped against what they call two main consumer anxieties: health (mental and physical) and finances. They then segmented consumers into cohorts, including most anxious (highly concerned about both health and finances) and health concerned (more concerned about health than finances.

Perhaps not surprisingly, consumers in those groups exhibited the most significant and permanent changes in purchasing behavior, the report said. The most anxious consumers showed up in each of the nine countries, led by the U.S. at 44%, followed by France (38%), Saudi Arabia (37%), Italy (35%), Germany (33%), the U.K. (32%), Japan (31%), China (31%) and Switzerland (28%). In terms of health, 29% of consumers in the U.S. reported being extremely or very concerned about physical health, while 28% said they were extremely or very concerned about mental health. 

You can download the full report to learn details about the purchasing changes among each group. In general, the research shows:

  • Restaurant dining and travel will be the slowest to return back to pre-COVID levels.
  • Despite e-commerce growth and its projected likelihood to last, many consumers have found the shift to online channels challenging (especially for buying categories like groceries).
  • A large percentage of consumers have grown more concerned about the environment—a finding popping up in other research.

Looking for value, yet still brand loyal to some degree

Another study, from NielsenIQ, found an even higher percentage of consumers globally, nearly 70%, have changed the way they buy categories and brands, though this research didn’t seem to look at how permanent the changes may be. Also conducted in early 2021, among consumers representing 16 countries, this study’s findings are similarly best summed up in the report headline: “Consumers are looking for value, but it’s not a race to the bottom.”

Like AlixPartners, the NielsenIQ researchers grouped the consumers in their study into specific behavioral cohorts, keying on two. “The study highlights that 73% of consumers have experienced a recent shift in their personal financial situations, to varying degrees, since September 2020,” the report said. “Dissecting this lot of cautious spenders, we have the newly constrained consumer group (46%) whose income or financial situations have declined, and the cautious insulated group (27%) who have had limited impact to their financial situation or income. Across both groups, recent events have driven these cohorts to become extra mindful of what they spend.”

For example, the cautious insulated group may be experiencing new limitations on their incomes or new financial strain and, thus, are watching their spending more closely. Among those, 66% reported that they’ve changed how they buy products, while 79% of the newly constrained reported the same. The newly constrained are shrinking their spending in all areas, with 56% selecting products in ways to avoid busting their overall “basket of goods” budget. On the other hand, the cautious insulated tend to make more choices to conserve their spending, with 63% weighing product attributes that matter most to them.

Regardless, 53% of newly constrained and 58% of cautious insulated said they are sticking to their regular brand preferences; the majority are just opting for the lowest-priced choice among their preferred brands. Backing that up, 69% of newly constrained and 55% of cautious insulated are trading down, including on their own food and drink purchases. 

Based on the research, NielsenIQ advised brands: “Companies need to double down on offering the lowest price options within familiar brand families in order to succeed with today’s cautious, brand-loyal buyers.”

With human food, consumers practice ‘conscious consumption’

Finally, consumer data from IRI showed that, while demand for premium and superpremium consumables (human food) increased in 2020, emerging trends for 2021 indicate consumers are starting to focus on “conscious consumption,” in line with the NielsenIQ findings. Specifically, consumers will start to seek “right-sized” (smaller) products as they begin to consume more out of home, and value-priced and private-label products will gain traction as increased mobility squeezes household budgets.

Presented by Chris Dubois, senior vice president and principal with IRI, and Joyce Neth, vice president of audience and research for Watt Global Media (parent company of Petfood Industry), during the Poultry Federation’s Food Safety Conference on March 31, 2021, the data revealed that premiumization contributed to price growth in several human food and beverage categories, often driven by health and wellness or sustainability or social consciousness claims. Those types of claims will continue to influence consumer purchasing through 2021, the presenters said.

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