The Winter 2025/2026 Cascadia Capital Pet Industry Overview noted a trend of digitally-native pet food brands expanding into physical retail, underscoring the growing importance of an omnichannel strategy to drive scale and brand awareness.
Digitally-native brands are companies that started online and sell directly to consumers through e-commerce. Some examples of this trend:
- Native Pet expanded into retail in early 2024 with its launch at Tractor Supply Company and has broadened its retail footprint to include PetSmart and specialty and natural grocery partners.
- Ollie expanded beyond DTC with a selective retail partnership with Petco in 2023.
- Pet Honesty moved into physical retail through broad distribution across mass and specialty channels like Target, Petco and Petsmart.
- Smalls entered physical retail through Petco with modified, retail-friendly formats while maintaining its core fresh cat food subscription through DTC.
Cascadia's report found that selling in physical stores could help brands attract new customers at a lower cost and build trust, especially for premium and wellness products. Many of these brands now offer shelf-stable versions of their products in stores while continuing to sell fresh products through online subscriptions.
This strategy helps them reach more customers while protecting their profit margins and customer loyalty. As DTC growth slows and competition increases, brands need this mix of online and retail sales to grow in a more sustainable way.
Cascadia noted some brands to watch that may make the move into retail include The Farmer's Dog, Spot & Tango, Maev and Sundays for Dogs.
Managing margin expectations
Expanding into retail means lower profit margins for digitally-native pet brands compared to selling direct-to-consumer, the report stated. Retailers charge slotting fees, promotional allowances and category management fees, and brands must accept lower wholesale pricing than their DTC prices.
While retail expansion drives broader awareness, product trial and credibility, profitability per unit is typically lower. , Cascadia noted brands must strategically price their retail products to maintain acceptable margins, ensuring that retail serves as a growth and customer acquisition channel rather than eroding profitability.
For digitally-native brands seeking scale, retail is no longer optional. Cascadia noted it serves as a complementary channel that drives awareness, credibility and revenue while supporting the brand's online foundation. Additionally, in this strategic acquirer landscape, potential buyers prefer brands that can demonstrate strong performance across multiple sales channels, which may motivate these companies to expand beyond DTC.
