The US government, through its Bureau of Labor Statistics agency, just released preliminary inflation data for February 2024, and the picture for pet food looks rosier: Year-over-year (YOY) pet food inflation for the month reached 2.6%. That’s more than two percentage points lower than January 2024’s 4.8% YOY — and for the first time in nearly two years, the pet food number was below the US consumer price index (CPI) of 3.2% for on the moon.
But before we start celebrating, it’s important to consider the long view — meaning that compared to February 2021, before inflation really started to rise, pet food prices are still 22.5% higher. (Thanks to John Gibbons of PetBusinessProfessor.com for providing all the data.)
While many pet owners are willing to make other sacrifices before reducing their spending on pet food, everyone has a limit. Have pet food buyers reached out to them?
Most pet owners stick with existing pet foods
Much of the data related to pet owners’ attitudes and purchasing habits related to pet food prices comes from 2023. For example, in August, ingredient supplier Beneo surveyed 2,500 of pet owners in five countries (US, Brazil, UK, Germany and China ), consisting of 250 dog owners and 250 cat owners per country. While nearly 90% of respondents believed pet food prices had increased in the past year, less than 20% (one in six) said they switched to cheaper pet food because of those prices.
In January 2024, Packaged Facts surveyed US dog and cat owners, found that 17% of dog owners had switched to a lower-priced nationally branded dog food in the previous 12 months, and 15% switched to lower priced store brands. product. Among cat owners, the percentages switching to cheaper foods were 19% and 9%, respectively.
The totals of owners who “dropped” to the lower price of pet foods – 32% for dogs and 28% for cats – were offset (and then some for cats) of 34% of dog owners switching to a higher priced dog food and 44% of cat owners doing the same. Packaged Facts released this data in a recent webinar, “US Pet Market Outlook: Opportunities in a Mixed-Growth Landscape.” They also noted an increase in private label pet food sales in the US, which seemed to be connected to rising pet food prices in general.
Cleveland Research Co. also regularly reviews. US pet owners; Its most recent survey, conducted in the fourth quarter (Q4) of 2023, showed that 53% of respondents perceived pet food prices to be somewhat higher, and 16% saw prices higher. . Both numbers are up from the company’s previous survey in Q2 2023, when 44% of owners said pet food prices were somewhat higher and 12% said they were higher. . Interestingly, older pet owners (baby boomers and gen Xers) seem to notice higher prices than younger ones (millennials and gen Zers), according to Claire Obertin, market research associate at Cleveland Research, which presented the data during another webinar, “Exploring 2024 global consumer trends in the pet food market.”
But in terms of how respondents responded to higher prices, only 17% said they thought about switching to a lower-priced pet food and did; 26% said they had considered doing so but were not planning to move; and 57% said no, they would not transfer their pets’ food. There was slightly more consideration given to switching to another retailer to find better pricing on a preferred pet food, a combined 58%, but only 18% had actually done so at the time of the survey.
(Remember: Obertin will present updated, 2024 data in this area, as well as other pet food trends and purchasing patterns, during Petfood Forum 2024.)
Outlook for 2024 and beyond
Obertin and his webinar co-presenter, Lindsay Beaton, editor of Petfood Industry magazine, both commented that most of the cuts pet owners are making seem to be on other pet products and services. animals, especially the more discretionary ones like toys and grooming. The experts presenting Packaged Facts’ webinar (Shannon Landry Brown, David Lummis and David Sprinkle) echoed those statements. And, as other market watchers have noted, pet care/food is one of the last categories to be cut back by consumers, which Obertin says his company’s macro consumer research has borne out.
The bottom line seems to be that pet owners will do everything they can to keep feeding their pets the best products they can afford – or cut back on spending elsewhere to keep buying the their preferred pet foods. However there is a segment of owners, at least in the US, who have and will downsize if necessary.
If the Packaged Facts or Cleveland Research data is more representative of the total population of pet owners, 17% of people trade in inferior pet foods, the Cleveland Research number, is not nothing ; and the Packaged Facts numbers are even more alarming, at 32% for dog owners and 28% for cat owners. Also, branded pet food companies need to continuously monitor those private label sales.
During its webinar, the Packaged Facts team projected that the US pet market — in this case consisting of pet food and treats, other pet products and veterinary services — could be due for a “rightsizing,” possibly even reversing. at pre-pandemic growth levels. . That would translate to 4.9% growth for 2024 and a compound annual growth rate (CAGR) through 2028 of 6%.
The research firm expects US pet food growth to be healthier for the next few years, up from an expected 8% to 10% per year, according to Sprinkle in his latest “Market Report” column for in the Petfood Industry. But that is lower than the CAGR of 13% from 2018-2022; if the projections are true, that means the market can expect very healthy growth but not at the scary pandemic levels.
