US spent nearly US$33 billion on pet food, treats in 2018

Nielsen analysts calculated that Americans spent nearly US$33 billion on pet food and treats in 2018 in various retail channels, including local pet stores, big box retailers, vet clinics, online retailers and others.

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Nielsen analysts calculated that pet food and treats in 2018 in the United States reached nearly US$33 billion across various retail channels, including local pet stores, big box superstores, vet clinics, e-commerce and others. Compared with a year ago, this represents an increase of 5 percent, or US$1.5 billion in sales. Nielsen presented the findings of their retail data collection in the report “An Uptick in Clicks and Bricks for Pet Food: An Omnichannel Perspective.”

E-commerce sales of pet consumables increased 53 percent in 2018, compared to 5 percent growth overall across online and offline pet consumables.

“The online growth figures alone might set alarm bells ringing for brick-and-mortar pet retailers, but consumers aren’t flat-out abandoning physical stores in favor of e-commerce,” wrote Nielsen’s analysts.

For example, one-in-two pet owners (51 percent) indicate that they don’t ever plan to shop for or purchase pet items online, according to Nielsen’s Digital Shopping Fundamentals research.

Although vet clinics, pet superstores and neighborhood pet stores are seeing reduced sales overall, analysts found that mainstream and neighborhood pet retailers continue to find ways to resonate with pet owners and post modest growth alongside the rapid growth of online sales.

Health claims driving pet food growth

While brick-and-mortar growth has remained modest in comparison to online, consumers have spent more than US$16 billion on pet food at traditional retail outlets this year, up nearly 2 percent from 2017.

Consumption has slowed, with volume of pet food down 1 percent in this same timeframe. In many cases, this uptick in sales can be linked to the influx of premium pet food brands on mainstream store shelves.

Demand for pet food in stores has continued, thanks to educated consumers seeking healthy formulas (with higher price points) at mainstream retail. This trend is helping drive sales in the dog food category thanks to the perceived health benefits (more protein and fewer grains) of wet food.

While overall dog food dollar sales are up 2 percent from a year ago, wet dog food sales growth is more than twice as pronounced, and the growth is exponentially higher among wet dog foods that claim to be natural or free from artificial colors. Dry dog food continues to hold a commanding share of category sales, but growth has stagnated.

As consumers’ hearts and wallets grow more fond of wellness regimes in pet care, the rise of wet pet food may continue.

Specialty pet retailers in 2018

Together, pet specialty retail offerings (superstores and neighborhood pet stores) represent a combined US$8 billion in annual sales and 3.2 billion in pounds of pet consumables. But performance hasn’t been consistent across retail sectors in this space. In fact, while pet superstores have seen declines in both volume and dollar sales, neighborhood pet retailers have continued to experience impressive dollar and volume growth.

Neighborhood pet shops are differentiated in their ability to offer personalized services and access to communities of interest to their shopper bases. These factors are appealing to consumers, and a closer look at past performance indicates that small regional chains and independent storefronts have driven the most growth among pet specialty retailers.

With unmatched assortment available online, as well as the convenience of pet food availability in mainstream retail, pet superstores have struggled to compete.

One area where local independents have really capitalized is in driving sales of more premium and high-quality pet meals and meal enhancers. In fact, the meal enhancer category (which includes dry, wet and liquid toppers, mixers and enhancers) represents US$84 million in annual sales for specialty pet retail, up 21 percent from a year ago. Growth has been especially pronounced in bone broth and stews offered in cartons and pouches.

Veterinary pet food sales in 2018

Vet clinics saw sales of US$1.6 billion across pet consumables this year. This represents a 6 percent drop in dollar sales from a year ago, and pet food volume sales (which totaled 393 million pounds) has also slowed, declining by more than 8 percent.

“It’s interesting to note that wet foods, often perceived by consumers as a healthful alternative to dry options, represent a much higher share of the category within vet clinics than among other pet food retailers,” Nielsen analysts wrote. “Despite the larger presence of wet pet foods in vet clinics, sales haven’t seen the lift we’ve seen across wet pet food sales in mainstream channels. In fact, we’re seeing declines across almost all prescription pet food and treats.

“Relative to other channels, e-commerce is taking its toll on the vet clinic brick-and-mortar channel, as pet parents may be seeking online vet clinics for support or filling their prescriptions online more often.”

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