Pet Food: Inc Impact of COVID-19 - US - August 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways 
Market overview
Figure 1: Total US sales and forecast of pet food, at current prices, 2015-25
Figure 2: Total US sales and forecast of pet food, at current prices, 2015-25
Impact of COVID-19 on pet food
Figure 3: Short, medium and long term impact of COVID-19 on pet food, August 2020
Re-emergence 
Mass merchant shoppers more likely to consider trading down, creating opportunity for store brands
Figure 4: Attitudes toward pet food and treats, by primary pet food retailer, April 2020
Recovery 
An opportunity to get more specific about functional benefits 
Figure 5: Interest in functional health and wellness benefits, April 2020
Closing the gap between attitude and treating behavior
Figure 6: Attitudes toward pet food and treats, April 2020
THE MARKET – KEY TAKEAWAYS
Sales spike at the onset of the pandemic interrupts slow, steady growth
Dog and cat food dominate category, but treats offer growth opportunity
Narrow focus may unlock the power of functional health benefits
MARKET SIZE AND FORECAST FOR PET FOOD
Slow, steady growth interrupted by initial COVID-19 sales spike 
Figure 7: Total US sales and forecast of pet food, at current prices, 2015-25
Figure 8: Total US sales and forecast of pet food, at current prices, 2015-25
Macroeconomic factors
Figure 9: Expected US unemployment, 2019-25
Figure 10: Index of consumer sentiment, January 2019-20
Impact of COVID-19 on pet food
Figure 11: Short, medium and long term impact of COVID-19 on pet food, August 2020
Lockdown
Re-emergence
Recovery
COVID-19: US context
Learnings from the last recession: resiliency up to a point
SEGMENT PERFORMANCE
Dog and cat food dominate category, but treats offer growth opportunity
Figure 12: Share of sales of pet food, by segment, 2020 (est)
Wet sets the pace for both dog and cat food
Treats remain a key growth driver for the category
Figure 13: Total US sales and forecast of pet food, by segment, at current prices, 2015-25
MARKET FACTORS 
Americans love pets, yet economic direction could impact ownership
Figure 14: Number of pet-owning households, 2009-19
Baby bust: a further decline in birth rate could create pet boom
Figure 15: Future pet ownership, by parental status, marital status, April 2020
Pandemic has positive impact on pet-owner relationships
Figure 16: Behavior changes due to Covd-19 pandemic, April 2020
MARKET OPPORTUNITIES 
Increasing frequency key to growing treats and toppers 
Narrow focus may unlock the power of functional health benefits
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Big food companies dominate mass-channel pet food sales
Weakness in mid-tier brands cuts into Nestlé Purina’s lead
MARKET SHARE
Big food companies dominate mass-channel pet food sales
Weakness in mid-tier brands cuts into Nestlé Purina’s lead
Greenies’ expansion lifts Mars
Sales of pet food by company 
Figure 17: US multi-outlet sales of pet food, by leading companies, rolling 52 weeks 2019 and 2020
COMPETITIVE STRATEGIES
Refrigerated, frozen, and fresh gain momentum
Figure 18: Facebook ads for DTC fresh pet food companies
Animal-first perspective provides a twist on humanization
Figure 19: Facebook ads for Nutrish, Merrick, and Orijen brands
THE CONSUMER – KEY TAKEAWAYS  
Online purchasing gains amid pandemic
Use of wet food, treats and toppers on the rise
Cat owners more focused on taste, dog owners on product-related factors
Interest in functional benefits creates opportunity for both food and treats
Dual-species owners a key target for innovation
Closing the gap between attitude and treating behavior
PET FOOD PURCHASE LOCATIONS
More pet food purchasers move online
Figure 20: Most-often pet food retailer, April 2020
Younger pet owners gravitate to pet specialty or mass merchants
More older pet owners shopping online
Figure 21: Most-often pet food retailer, by age, April 2020
Hispanic pet owners’ retail preferences reflect their relative youth
Figure 22: Most-often pet food retailer, by Hispanic origin, April 2020
Cat owners appear more likely to add pet food to the grocery list
Figure 23: Most-often pet food retailer, by type of pet owned, April 2020
DOG FOOD AND TREATS PURCHASED
Dry food remains a default choice, but wet has more momentum
Figure 24: Dog food and treats purchased, April 2020
Young owners’ topper purchases suggest opportunity for flavor-focused concepts
Figure 25: Dog food and treats purchased, by age, April 2020
Topper purchase increases at mass merchants
Figure 26: Dog food and treats purchased, by primary pet food retailer, April 2020
CAT FOOD AND TREATS PURCHASED
Dual use on the rise as more cat owners purchase wet
Treats and toppers on the rise
Figure 27: Cat food and treats purchased, April 2020
Younger cat owners especially likely to purchase toppers
Figure 28: Cat food and treats purchased, by age, April 2020
Specialty and online shoppers more likely to be multiform feeders
Figure 29: Cat food and treats purchased, April 2020
PET FOOD PURCHASE FACTORS
Cat owners more focused on taste, dog owners on product-related factors
Importance of grain-free declines slightly, possibly due to FDA investigation
Figure 30: Pet food purchase factors, April 2020
Dual owners’ cat food preferences align with dog food preferences
Figure 31: Cat food purchase factors, April 2020
Appetite appeal especially important to supermarket shoppers
Pet specialty and online shoppers more focused on product quality
Figure 32: Pet food purchase factors, by primary pet food retailer, April 2020
INTEREST IN FUNCTIONAL HEALTH AND WELLNESS BENEFITS
Interest in functional benefits creates opportunity for both food and treats
Figure 33: Interest in functional health and wellness benefits, April 2020
Modest differences across species point to targeting opportunities
Figure 34: Interest in functional health and wellness benefits, by type of pet owned, April 2020
An opportunity for retailers to base assortment on specific benefits
Figure 35: Interest in functional health and wellness benefits, by primary pet food retailer, April 2020
PET FOOD AND TREAT INNOVATION AREAS
Treats offer a variety of opportunities for innovation
Figure 36: Pet food and treat innovation areas, April 2020
Dual-species owners a key target for innovation
Energy for dogs on the go
Figure 37: Pet food and treat innovation areas, by type of pet owned, April 2020
ATTITUDES TOWARD PET FOOD AND TREATS
Closing the gap between attitude and treating behavior
In their words: openness to trying new treat products
Figure 38: Attitudes toward pet food and treats, April 2020
Dog and dual-species owners especially engaged in category
Still a degree of concern over grain-free among dog owners 
Figure 39: Attitudes toward pet food and treats, by type of pet owned, April 2020
Specialty and online shoppers aligned in focus on quality
Mass merchandiser shoppers most likely to consider trading down
Figure 40: Attitudes toward pet food and treats, by primary pet food retailer, April 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET 
Figure 41: Total US sales and forecast of pet food, at inflation-adjusted prices, 2015-25
Figure 42: Total US sales and forecast of cat food, at current prices, 2015-25
Figure 43: Total US sales and forecast of dog food, at current prices, 2015-25
Figure 44: Total US sales and forecast of other pet food, at current prices, 2015-25
Figure 45: Total US sales and forecast of pet treats, at current prices, 2015-25
APPENDIX – OTHER MARKET DATA
Figure 46: US multi-outlet sales of pet food, by subsegment, 2015-20
APPENDIX – COMPANIES AND BRANDS 
Figure 47: US multi-outlet sales of cat food, by leading companies and brands, rolling 52 weeks 2019 and 2020
Figure 48: US multi-outlet sales of dog food, by leading companies and brands, rolling 52 weeks 2019 and 2020
Figure 49: US multi-outlet sales of other pet food, by leading companies and brands, rolling 52 weeks 2019 and 2020
Figure 50: US multi-outlet sales of pet treats, by leading companies and brands, rolling 52 weeks 2019 and 2020