Measuring the Impact of Natural Pet Products
Natural products represent a big opportunity for pet specialty retailers that can identify and respond to the latest sales trends.
Pet specialty stores have proven to be fertile ground for natural product marketers as shoppers in this retail channel continue to seek out what they perceive to be healthier alternatives to traditional fare for their four-legged friends. In fact, according to a recent retailer survey conducted by Pet Business magazine, more than 40 percent of respondents said that they market their business as a “natural” pet store.
However, while the natural movement has grown to touch almost every product category on pet store shelves, it has become particularly pervasive in the food and treat aisles. Overwhelming evidence of this can be seen in the data collected by New York-based market research firm GfK in its point-of-sale retail panel representing over 11,000 pet specialty outlets. The data indicates that natural products accounted for 67 percent of all pet food and treat sales in pet stores in 2014.
This trend comes as no surprise to Tom Koesel, owner of Pawsitively Pure All Natural Pet Food in Broadview Heights, Ohio. As its name implies, his store has long been committed to the concept of natural pet nutrition. “I opened my store with [selling natural foods] in mind, because they are a healthier and better quality alternative to the traditional options that are out there,” he says, noting that all of the store’s treats are natural as well.
Of course, there are some nuances within the sub-segments of the natural pet nutrition market, especially when comparing dog and cat products. According to GfK, while natural SKUs accounted for more than 72 percent of dog food and treat sales in pet specialty stores, natural products for felines were a bit less robust, with just over 45 percent of the market share.
This is a dichotomy that Susana Vasquez has witnessed first hand in her store, Pet Food Gone Wild in Rio Rancho, N.M. “Those numbers seem spot on, based on what we’ve seen in our store,” she says. “Cat food just isn’t where dog food is [in terms of the impact of natural products]. The feedback that I’ve gotten from cat owners is that they’re a little more sensitive to the higher prices [that come with natural foods], especially if they have multiple cats—in those cases, [feeding natural diets] can get pretty expensive.”
One sub-category of the natural nutrition trend that has exploded over the past several years is grain-free diets—which, according to GfK, posted a dollar-sales increase of more than 43 percent between 2011-2012. More recently, however, the growth of the grain-free segment has somewhat slowed. In 2013, sales of grain-free diets grew by just over 30 percent, and in 2014, that growth slowed to a bit over 23 percent.
However, this is one area in which Vasquez’s experience differs from the picture painted by GfK’s data. “The grain-free trend hasn’t really slowed down for us at all,” she says, noting that this may be a regional nuance. “Being located in the Southwest, I’ve found that it is still a relatively new concept here, and many customers are just now coming around to the concept [of feeding grain-free diets].”
Although food and treats comprise the areas in which the natural products have had the biggest impact, according to 90 percent of retailers polled by Pet Business magazine, supplements, grooming products and litter also ranked high when it came to evaluating which categories have been most affected by the natural movement. According to GfK, retailers’ assertions are backed up by hard sales numbers in at least one of these categories—natural cat litter. According to the data collected in the market research firm’s point-of-sale retail panel, natural cat litter sales grew by more than eight percent in pet stores in 2014 to reach a high-watermark of more than $115 million.
Looking ahead, most pet stores seem to be bullish on future growth within the natural segment. Nearly 90 percent of pet retailers surveyed by Pet Business magazine said that they expect natural products to play an even bigger role in their business in the future. And indications are that these retailers have good reason to be optimistic about the prospects for these items. Eighty-four percent of survey respondents said that they have noticed that the number of pet owners specifically seeking out natural products is increasing. Koesel can be counted among them.
“The number of shoppers looking for natural products continues to grow,” he says. “And any time there is a big recall, it seems to push even more people into our store [for these products].”