Everyone in the pet food industry probably banks on the pet food market living up to its reputation (at least since about 10 years ago) of being recession resistant. And you possibly now hope it’s pandemic resistant, too – but how confident are you in the market and industry’s strength and health in the short or long term?
You can weigh in by participating in our new quarterly Pet Food Confidence Index, adding your experience and voice to those of other pet food professionals from around the globe.
Baseline pet food confidence data
This is our second quarterly survey asking how pet food professionals feel about the current status and short-term future of business conditions. The first survey was conducted in late January/early February 2020. At that time, the novel coronavirus (not yet named COVID-19) was running rampant in China, with enough cases appearing in other countries that the World Health Organization (WHO) had declared the outbreak a public health emergency of international concern.
By the time we compiled and published our report from the first survey, WHO had declared COVID-19 a global pandemic, then spreading throughout Europe, the U.S. and many other regions, and resulting in severe economic downturns. Thus, the survey report seemed out of date, unfortunately – but did provide a good baseline for the future.
At that time, pet food professionals responding to the survey said they felt positive about current business conditions, with nearly 50% seeing those conditions as above average. These professionals reported optimism over continuing consumer demand, new product introductions, ingredients and technologies driving growth and expansion. In addition, almost 60% of respondents said they expected better business conditions in six months, and nearly 90% expected increased opportunities for growth and expansion. Global markets, e-commerce and additional distribution were the top reasons given for that optimism.
What’s the confidence level in the pet food market now?
Do people in the industry feel the same confidence and optimism now, after we’ve all been sheltering at home for at least two months and watching many economies continue to slide? And as pet food sales first soared, thanks to consumer panic buying, but then dropped in April and early May?
You’ll have to wait until the July issue of Petfood Industry is available to find out – unless you participate in the current confidence index survey. (Survey participants can get the report before it’s published by providing their contact information.)
Meanwhile, we do have other industry data to go by. In early April, we fielded another survey, this one specific to how pet food manufacturers and professionals were faring during the COVID-19 outbreak. The survey is still in the field, though it was intended to give a data picture at a certain point in time. As of May 20, 51.5% of respondents reported that sales of their pet food and treat products had increased substantially (by double-digit percentages), with another 23% seeing single-digit percentage growth. Just 13.6% reported flat sales, and a combined 12.2% reported declining sales by single- or double-digit increases.
Looking ahead, 42.4% of respondents said they expect their sales to continue to increase over the remainder of the year, with 35% expecting a leveling off and 23% expecting a decrease. One respondent did express concerns related to new product introductions and the state of pet retailing: “We now face the challenge of selling in new products, which are part of the strategy. Retailers are more skittish at taking in new items because, in many cases, customers can only do curbside or just come in to get what they need. Staff has been laid off in stores. More savvy retailers continue to run promotions and communicate via social media, email, etc. There will be lost sales on product innovation.”
Looking back and ahead
With each Petfood Industry Confidence Index survey, we also ask trending questions unique to that particular quarter; and – no surprise – the questions in this second-quarter survey ask about respondents’ experiences with the COVID-19 pandemic. We can see whether they resemble responses from the April COVID-19-specific survey or if and how situations are changing for pet food companies and professionals.
For the first quarter of 2020, we asked about people’s experiences with and impressions of the canine dilated cardiomyopathy (DCM) investigation in the U.S. DCM, remember that? While the condition and ongoing investigation are still a concern for some in the industry, as well as for consumers, veterinarians, retailers and possibly regulators, the pandemic seems to have pushed issues like this to the back burner for many.
Yet the investigation’s impact on the market, including grain-free pet food, is worth still tracking. If SuperZoo 2020 happens in early September, it will be interesting to see if new “grain-friendly” products are still being introduced; if such launches continue into next year, when (we hope!) other pet trade shows resume; and how retailers accept and support such new products.
View our continuing coverage of the coronavirus/COVID-19 pandemic.