Strategic responses to pandemic challenges for pet food

Supply chain disruptions may influence distribution, especially challenging smaller brands.

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(Image by Andrea Gantz)
(Image by Andrea Gantz)

Dividing the ongoing COVID-19 pandemic’s effects into four categories can help pet food companies deal with the ramifications of the crisis for the dog, cat and other pet food industries. After considering the ways each of those areas affects pet food production and sale, Jared Koerten, head of pet care at Euromonitor International, discussed strategies pet food industry leaders can use to address each of the four areas. Koerten spoke in a recorded webinar presented by Euromonitor and Interzoo.

First, global economic declines caused by the pandemic will influence every industry, pet products included. Second, supply chain disruptions may influence both production and distribution, especially internationally. Consumers too have found new ways to supply themselves, as they move towards e-commerce, the third area Koerten discussed. Ultimately, pet ownership itself has been influenced by the pandemic as people look to their animals for comfort during social distancing.

“There are four big areas for strategic planning here.” Koerten said. “How can you strategize around those?”

Strategies for dealing with COVID-19 pandemic's effects

The global economy is headed in a very negative direction, he said.

“So what can you do?” he said. “Focus on value for money.”

Consumers prioritize value right now, Koerten said. Consumers will definitely appreciate when pet food brands provide more value for their money right now. As such, brands also need to be aware of the potential for consumers to trade down to lower priced options. In particular, many private label premium dog and cat food now meet pet owners’ demands for natural, ancestral diet, grain-free or other qualities.

“They offer it at a significant value like they, like they haven’t in the past,” he said.

Pet food supply chain during COVID-19

Smaller pet food brands have potentially less ability to adapt to supply chain problems, he said. To cope, these brands especially need to focus on flexibility and capacity to maintain shelf presence and get products to market. This pressure on small brands could influence business strategy.

“Could we see some acceleration of M&A activity here?” he said. “Could we see partnerships? Could we see new opportunities for smaller brands to try to adapt to the situations they're facing with their supply chain right now?”

Pet food sales channels during pandemic

The pet specialty and veterinary channels have seen an ongoing, significant drop in traffic, he said. Pet owners don’t want to spend time browsing in pet specialty shops, or using grooming services. Instead, purpose-driven shoppers make quick visits for specific items, not stopping to share pet food tips with other customers. Likewise, veterinary visits are kept to a minimum. At the same time, pet owners buy more products online. Pet food subscriptions lock consumers in and maintain them for the long haul, which may essentially take them out of the market, as consumers join savings plans or autoship services.

“How do you get in front of the consumer in an era of automation, subscriptions and purpose driven shopping trips?” he said. “This needs to be made the focus for your business as you try to figure out how to navigate these changes in the channel landscape.”

Pet ownership trends during pandemic

Pets have filled in for friends and family as people stay home during the pandemic.

“People spending more time at home with their pets developing that bond gives you an opportunity to innovate market around those pet owner and those owner bonds that are that are growing as well as new pet owners who are coming into this space for the first time during COVID-19.”

However, pet owners traditional means of socializing with each other have also been altered. Pet owners no longer take their animals with them to stores, reducing the experiential element of the retail experience.

“So what are other ways that pet owners can socialize and engage with one another in online forums or other types of environments?” he said.

Pet food brands can find new tools for owner engagement in a digital world, whether that's live streaming a pet sampling a product, or engaging via pet owner platforms, he said.

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