What will the pet food market look like post-COVID-19?

Pet food sales surged through March, as the pandemic spread through the U.S., but that may not last, affecting pet food production, retail and other areas.

Insights into a few questions may provide short-term clues to how the pet food market will emerge on the other side of the COVID-19 crisis. | (Javier Brosch | Fotolia)
Insights into a few questions may provide short-term clues to how the pet food market will emerge on the other side of the COVID-19 crisis. | (Javier Brosch | Fotolia)

No one can say how the pet food market will emerge on the other side of the unprecedented coronavirus crisis, but insights into a few questions may provide some short-term clues:

Pet food sales surge as pet owners stock up, but will that last?

Throughout March 2020 and up to press time for the May 2020 issue, pet food sales in the U.S. were soaring. For example, for the week ending March 21, 2020, dog food sales grew 54.7% over the same week in 2019, after a 37.5% increase for the week ending March 14. Cat food saw a similar rise, at 52.8% and 38.7% for the respective weeks.

That was when the pandemic began spreading throughout the U.S. and people in many parts of the country were encouraged or ordered to stay home, resulting in panic buying and hoarding. This is likely not a sustainable pattern, especially as more people – no doubt many pet owners among them – lose their jobs or at least some income.

Packaged Facts is projecting 4% growth for the U.S. pet food market in 2020. That’s down from the original 6% forecast for the year, pre-COVID-19, yet still one of the few bright spots for the pet care industry overall, which Packaged Facts projects to decline by 17%. (Cat litter is another solitary growth category.) The lower growth for pet food will reflect some pet owners “trading down” to buy less expensive pet food, reversing a years-long trend of growth from rising premium pet food sales.

Another impact of the pandemic and economic crisis could be the surrendering of pets to animal shelters, though David Sprinkle, research director for Packaged Facts, believes pet ownership will remain steady and possibly even increase for dogs, a pattern evident since the Great Recession.

Can the pet food industry keep up with demand throughout the supply chain?

The soaring pet food sales, even if just temporary, raise the question of whether pet food makers can meet the increased demand. If worker safety measures or labor shortages due to illness were to strike many manufacturing facilities, that could slow pet food production at a time when it needed to ramp up.

Similarly, with the pandemic being global, the supply and distribution of key ingredients or other materials, such as packaging films, could be affected. Evidence to date is mostly anecdotal, with some talk of ingredient shortages among pet food companies. The U.S. Food and Drug Administration said it’s in contact with industry members and closely monitoring for such shortages. New surveys being conducted may soon provide actual data.

The flip side of the increased demand and production is that, assuming it’s temporary, pet food manufacturers need to plan for an impending slowdown to avoid overproduction and excess inventory.

Where will pet owners buy their pet food?

Amid the rising sales, some interesting shopping patterns have emerged. Through March 2020, online pet food sales surged, perhaps even higher than previously, yet delays in order deliveries from the likes of Amazon and Chewy.com may have spooked enough pet owners to turn to independent pet stores to avoid waiting even a few days for their pets’ food, according to Mark Kalaygian of Pet Business magazine.

Yet if lockdowns and sheltering at home persist, that could drive more pet owners online and away from brick-and-mortar stores, which could prove an existential threat for smaller pet retailers. Or more people may simply become accustomed to online ordering and stick with it. Direct-to-consumer home delivery may also increase, as companies in the quickly growing category offering fresh pet food via delivery continue to attract funding ranging from US$2 million for Spot and Tango up to US$80 million for JustFoodforDogs, according to Woof Whiskers.

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