Amazon’s launch on May 2 of its own line of dog food, called Wag, doesn’t come as a big surprise. No one can say the e-commerce giant has been hiding its intentions regarding the pet food market. Late last year, the company announced that it would allow users to create special profiles for their pets, making the selection and buying of pet foods and other pet products even easier and less expensive, thanks to coupons and a one-time pet food discount for Amazon Prime members.
Then, at the Pet Industry Leadership Conference in the US in late January, Amazon executives presented plans to expand further into the online pet retail market, reported Pet Business, identifying pet products as a highly valuable category with growth potential. Pets are already in the top three of voice shopping categories on Amazon’s Alexa devices, the report said. At the time, the executives said Amazon aims to make its selection of pet products the world’s largest, even adopting robotics innovations in its warehouses to ease the handling of heavy, bulky products like pet food and cat litter.
Apparently, the company sees having its own pet food line as one way to expand its pet product selection and, obviously, increase its already very healthy sales in the category: US$1.4 billion in 2017, according to One Click Retail. The amount represented 38 percent year over year growth, and that growth was projected to keep soaring, even before the launch of the Wag line.
What’s in a name?
No doubt Amazon used data from those robust sales of pet foods on its platform to incorporate some of the best-selling features and claims into its own dog food: grain free, meat as the first ingredient, high protein, formulated with the help of veterinarians and made in the USA (though also including imported ingredients). You don’t have the type of success this company has experienced without hitting on all the key trends.
Yet I have to wonder how much Amazon thought through the name of its new dog food? It comes from Wag.com, which Amazon acquired along with Quidsi in 2011, according to AJ Dellinger on Gizmodo. Considering the number of similarly named pet-related companies and brands out there — for example, the Wag N’ Wash Food & Bakery retail franchise or Wagg Foods, a pet food company based in the UK — you would think the name might create confusion in the marketplace. But I guess when you’re as huge and dominant as Amazon is, you don’t have to worry about that?
The company also doesn’t seem worried about cannibalizing its existing pet food sales. Amazon has now chosen to compete with its own suppliers — a tactic it has also undertaken in other categories like diapers, clothing and even furniture, according to CNet.com.
The fact that the Wag dog food line is currently available only to Prime subscribers will probably not go far in limiting any damage to other brands’ sales; many consumers who have been buying their pet food on Amazon are already Prime subscribers, often taking advantage of subscription pricing and automatic ordering. Will brand loyalty cause them to keep their existing dog food subscriptions? After all, millennials, now the largest group of pet owners and among the most likely to shop online, are not known to be brand loyal.
Further pet food industry disruption
The headline on Dellinger’s Gizmodo article reads, “Amazon launches dog food brand because it hasn’t disrupted enough industries yet.” Snarky, but also an accurate way of saying that the pet food market will now be further roiled by Amazon’s outsize influence and intentions.