As direct-to-consumer food providers compete to become more relevant to consumers’ daily lives, ButcherBox is expanding its reach into pet food, creating more occasions for its customers.
D2C meat and seafood brand launched it ButcherBox For Pets line Feb. 27. founder and CEO of ButcherBox Mike Salguero discussed in an interview with PYMNTS the opportunity the space presents for the brand, given the high level of pet ownership among its human food customers.
“[B]before we entered [the category], of our membership base, 60% of them have a dog and 75% report having a pet — a cat or a dog,” said Salguero. “…There is a huge overlap, though [our pet food business] will be standalone, so it will also bring its own customers.”
He added that he “thinks” many customers new to the business through this pet food vertical will also adopt the brand’s core human food offerings, given a similar focus on food sourcing and quality.
The move comes as more brands make plays for consumers’ digital pet food spending, as consumers buy less of their pet care products in physical stores. Aggregators add up pet supply retailers on their platforms.
Last month, it was reported that the British eGrocer Ocado is entering the pet foodlaunches “fine dining” foods for cats and dogs.
Last year, D2C meal kit giant HelloFresh announced its dog food subscription, The Pet Tableas part of the company’s pursuit to become the leading “fully integrated food solutions group” in the world.
By the Numbers
Pet parents often buy the items they need online. Findings from the PYMNTS Intelligence study “Changes in Grocery Shopping Habits and Perceptions” revealed that only 27% of those who buy pet supplies do so primarily in physical stores. This share is lower than the cross-grocery-category average of 44%.
“Direct-to-consumer pet food has become a very large market recently,” Salguero said, noting the pet product retailer’s success with eCommerce Chewy as well as some well-funded D2C pet food startups.
Once consumers start buying pet food online, they will likely rely on these digital platforms for most of their animal-related needs, bringing back brick-and-mortar purchasing.
The PYMNTS Intelligence report “The Replenish Economy: A Deep Dive of Household Supply” derived from a survey of more than 2,000 US consumers. It announced that among the 15% of retail subscribers participating in Chewy’s Goody Box pet food and toy subscription program, 53% now shop in stores more often, with 11% of program participants no longer shopping in stores for these items.
The Acquisition Challenge
As consumers buy more of their pet care products online, ButcherBox sees an opportunity to secure strong consumer loyalty — but only if the brand can overcome a steep acquisition barrier.
Salguero discussed the challenges pet food subscriptions face in the early stages, building their audiences.
“The biggest challenge to a pet food company is [that] the switchover is a much more consider thing,” he explained. “If you talk to people who own pets, it’s like, ‘My dog eats X food. They’re fine with it. I don’t want to change it.'”
Because changing pets’ diets can result in issues such as animal reluctance to eat the new food or gastrointestinal challenges, it can be difficult to convince consumers to try new brands, he said. However, he contends that because dogs tend to enjoy the product, loyalty will be strong once the company overcomes that initial challenge.
“Once people make the switch, then retention is going to be really high, we think,” Salguero said, noting that the company hasn’t “seen enough game tape” to know for sure.
Using the Whole Carcass
In addition to securing long-term consumer loyalty and driving engagement with the brand’s existing customers, the addition of dog food also benefits the economics of the entire business, allowing the company to drive more revenue. from the animals it will still slaughter. for human consumption.
“For us, there’s the carcass utilization play,” Salguero explained. “… If we can create a pet food company, everyone’s meat prices will go down.”
He noted that pet food tends to use different animal parts than human food, and because of this, the brand can sell more carcass parts to consumers “at a premium price.” ” rather than at a “commodity price.” This, in turn, could allow the brand to lower some of the pricing on human food cuts, driving customer acquisition and loyalty.
“A lot of meat companies have pet food brands, but to my knowledge, we’re the only meat company that actually puts our name on it,” he said. “… What we’re saying is, ‘If you buy this for your animal, your animal is getting the same top quality that you are.’ … That is considered very dangerous.”
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