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A BRIGHT FUTURE FOR PET FOOD Pet food is growing, and with an unexpected tailwind this trajectory will likely continue into 2021. PBy IRI Lead Consultant Jan-Willem Verstraten. et food’s 8.7 per cent value growth over the 12 months to mid-July 20201 has been partly driven by the fact that Australian shoppers are increasingly paying a premium for ‘natural’ and ‘less- processed’ claims. Natural is growing dollar sales at 24.7 per cent2 and comes at a higher price per kilo than the mainstream everyday product offering, thereby trading up shoppers. Another value growth driver is treats, at 14.3 per cent, as we increasingly see the need for pet owners to connect with their dogs and cats. Humanisation in a convenient format The humanisation of pet food is not new, as the category tends to follow human consumption trends. The perimeter of the store, with its fresh produce and fridges, drove growth in 2019 for the FMCG channel. Unsurprisingly, therefore, fresh pet food continues to do well, with 7.7 per cent value growth3. This growth has been enabled by fridges in the pet aisle and by shoppers being increasingly aware of the need for quality pet food. Convenience is an often discussed trend, and we also see this in pet food. We like to give our pets healthy food in a convenient format. Single serve (up 11 per cent) and multipacks of single serve (up 19.7 per cent)4 are driving value growth from a format perspective. These pack types allow for convenience and keep the food fresh. The surge in pet adoptions The coronavirus lockdown has led to a surge in pet adoptions. Many RSPCA shelters have beaten previous adoption records and some Sydney based pet stores had more than 1,000 people on the waiting lists for a puppy. This is despite puppy prices increasing exponentially, sometimes double or triple the price for the most popular breeds. Retailers will have the pet food category labelled as a 2021 growth driver. While many categories will struggle in 2021 to successfully cycle over the stockpiling and increase in consumption that happened during March and April this year, the increase in pet ownership is almost guaranteed to drive more shoppers to the aisle. However, now that the situation is normalising, there are worries about the impact it can have on pets. Also, with unemployment at a high not seen since 1998, many people will face financial pressure. Therefore, rescue shelters might deal with a surge. Looking forward, we can expect to see more callouts of ‘Australian made’ on pack, with Covid-19 accelerating demand for locally made and grown products. With the continued growth of fresh, the humanisation of pet food, and pet adoption surging, the future for the category is bright. References 1. MarketEdge, National Grocery, MAT To 19/7/20. 2. MarketEdge, National Grocery, MAT To 19/7/20. 3. MarketEdge, National Grocery, MAT To 19/7/20. 4. MarketEdge, National Grocery, MAT To 19/7/20. INDUSTRY INSIGHT “We like to give our pets healthy food in a convenient format.” About IRI About Jan-Willem Verstraten Jan-Willem Verstraten is a lead consultant at IRI, focusing on clients within pet food and impulse. IRI is the leading provider of big data, predictive analytics and forward-looking insights for the FMCG industry. For more information, visit iriworldwide.com. SEP, 2020 RETAIL WORLD 19