While the global pet food market is dominated by several large companies—a pattern seen in many economic sectors—smaller players have long been the lifeblood of the industry, often introducing fresh new concepts, products, business models and perspectives. They also may curry favor among certain consumer segments, yet they also often face logistical and financial challenges due to their size.
What is the scenario for smaller companies and brands mid-2022, as the world continues to cope with a pandemic/endemic, supply chain disruptions, labor shortages and skyrocketing inflation? Though not specific to pet food, a new global study from NielsenIQ, “2022 Brand Balancing Act,” offers some insights and ideas.
Consumers identify brand size by traits, not revenues
Almost 60% of consumers surveyed by NielsenIQ said they prefer brands according to their size, either smaller or larger. How do consumers define the size of brands? By aligning traits such as “local,” “independent” and “unfamiliar” with smaller brands—identified by 33%, 31% and 27% of respondents, respectively—and “very popular,” “recognizable” or “world-renowned” with larger brands, as viewed by 46% respondents.
It's interesting that these consumers didn’t seem to assign any sort of financial or revenue-related components to the respective size of brands, which goes to show that selecting products—especially ones for our beloved furry family members—is often more of an emotional process than an analytical one.
Regardless, NielsenIQ casts respondents’ perceptions as an opportunity for small and medium-sized brands. “These distinctions form a very compelling baseline for brand perception, where small and medium-sized businesses can strive to hone and create demand for their strengths as new, different or locally affiliated options for consumer interest,” an article about the study says.
Consumers buying more brands since pandemic began
Perhaps the most compelling finding of the study is how much brands seem to matter to consumers globally. A majority (51%) said they’re buying a greater variety of brands now than before the pandemic. In addition, 67% said they believe that if they look diligently enough, they can find a brand that fits their exact needs.
Among those needs? Not surprisingly in these inflationary times, affordability tops the list—though according to NielsenIQ, it falls under a “functional reasons” umbrella that encompasses other aspects or offerings within a brand’s value proposition. Overall, 86% of respondents named functional reasons as most important when choosing a brand to buy. Other top selections included emotional reasons (“intangible or reputational qualities/values of a brand,” according to NielsenIQ), chosen by 71%, and brand resonance (“aspects that align to one’s personal or cultural identity”), chosen by 66%.
Smaller brands are perceived to meet those needs best for 48% of these global consumers, who said they plan to purchase those more in the future.
How smaller pet food brands can compete
Most pet food companies, especially larger ones with the resources, have very sophisticated marketing teams with strategies that are undoubtedly based on knowing their target consumers and what they need and expect from pet food brands. For smaller brands that may not have such resources, nor the scale to withstand supply chain, labor and inflationary pressures as well as larger companies can, the NielsenIQ study may help fill in the gaps.
“Prioritizing functionality is key to motivating purchases,” the study article says. “The small and medium-sized businesses who can secure willingness to spend, and alignment to top motivators for purchase, are most likely to benefit from these updated preferences.”