For the January issue of Petfood Industry each year, my colleague Lindsay Beaton, editor of the magazine, interviews pet food experts and professionals from throughout the world and from multiple areas of the industry to learn what they foresee as the top pet food trends for the coming year.
While the January 2021 issue is not yet available, here’s a spoiler alert: The top two trends by far for the new year are sustainability and e-commerce (followed by health and wellness a little way behind). E-commerce probably seems like a no-brainer. A powerful and growing force in pet food for several years now, the pandemic and its effects on consumers’ shopping habits has shifted its influence and market share into overdrive.
That sustainability was named by so many different experts shouldn’t be a surprise, either; it also appeared among the 2020 trends. “Sustainability has gotten a lot of coverage in the last several years, first as a buzzword, then as a legitimate trend and now as a movement,” Beaton wrote in an earlier article. “Much like the introduction, influence and eventual permanent rooting of the pet humanization trend, it looks as though sustainability is fast morphing into a standard business practice—not just in the pet space, but everywhere consumers have a say in shaping market trends.”
Consumers still want sustainability despite 2020 events
The COVID-19 crisis, including its significant economic impact, has caused many consumers to focus more on value and pricing of products, which may lead you to think that factors like sustainability would take a backseat. However, data shows that may not be the case: For example, a July 2020 report from the NYU Stern Center for Sustainable Business and research firm IRI showed that sales of consumer product goods (CPG) marketed with sustainability claims maintained this year and even achieved a slightly higher share of the entire CPG market.
Specifically, initial research indicated that CPG marketed with sustainable claims drove 54.7% growth from 2015 to 2019, despite accounting for only 16.1% of the CPG group. (The research studied 36 CPG product categories, about 40% of the entire CPG market, with pet food and pet treats being among the 36.) That growth was more than seven times higher than that for non-sustainable products.
To gauge whether the pandemic and economy have affected sales of sustainably marketed products, NYU Stern and IRI conducted further research this year. They found that products in those 36 categories followed the same sales patterns as all other CPGs (including pet food): a huge spike mid-March, as consumers stocked up in the wake of stay-at-home orders, followed by a return to more normal levels. That meant continued slight growth for the 36 sustainable categories, in addition to other CPGs. Yet the sustainably marketed products’ share of the entire CPG category has creeped up this year, reaching 16.8% to date despite the current situation.
Businesses and professionals are taking note: A survey by Euromonitor International, also conducted in summer 2020, of professionals from 80 different countries in 18 different industries indicated that sustainability is top of mind for them. In addition, their definitions of sustainability have expanded this year beyond just environmental concerns to also include elements like social purpose.
New tools for tracking sustainability metrics
Looking ahead to 2021 and beyond, it may help to consider some sustainability concepts in human food, given how closely pet food mirrors that market. An interesting movement in human food involves ingredient sustainability – how they’re grown, harvested and sourced, as well as tracking metrics related to sustainability within those practices and others employed to get a product to market.
For instance, a new brand called Moonshot Snacks offers crackers with ingredients that are farmed using regenerative agriculture. (An article on TechCrunch.com by Megan Rose Dickey describes regenerative agriculture as a “farming technique that aims to reverse the effects of climate change by capturing carbon in soil and aboveground biomass, which ultimately increases biodiversity, enriches soils and improves watersheds.”)
Beyond the product, though, the company behind it, Planet FWD, is also testing software it has developed to assess carbon impact. “So, if a brand wanted to determine what its current greenhouse gas impact is for its products, the tool could break down where it comes from — whether that’s the packaging, the ingredients, the distribution, etc.,” Dickey wrote. “From there, the tool would recommend how to reduce the product’s greenhouse gas impact.”
Jim Giles, senior analyst: food and carbon systems for Greenbiz.com, further explained the software in his “Food Weekly” newsletter, focusing on ingredients: “The tool allows food brands to easily identify ingredients that meet key sustainability metrics, including low emissions.” He added that Planet FWD has two rivals, Latis (which “brings comprehensive impact insights into the product R&D process through instant data analysis for over 30,000 ingredients, chemicals and materials,” reads its website) and Journey Foods (its “JourneyAI analyzes millions of ingredients via nutrients, supply chain insights and more to help you discover the perfect ingredient for any product”).
It stands to reason that if this type of technology can be applied to human foods and their ingredients, it could also work with pet food ingredients (many of which are used in both industries). For pet food manufacturers and ingredient suppliers looking to make – and back up – claims related to sustainability, perhaps this is an avenue to explore. Depending on the fees charged by companies like Planet FWD, Latis and Journal Foods, it may even be available to smaller players.
“Large retailers and brands can pressure suppliers to discuss environmental metrics, but smaller companies and startups don’t have the leverage,” Giles wrote. “As a result, comparing the sustainability bona fides of different ingredients becomes very time-consuming. By solving this problem, services such as Planet FWD will act as an accelerant, allowing brands with ideas for new sustainable foods to get to market much quicker.”
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