Private label and premiumization power the pet category from two sides


Private label and premiumization power the pet category from two sides

  • Panelists from Petco, Hill’s Pet Nutrition, and NIQ unpack pet care industry insights as they relate to consumer motivations and the impact economics plays.  
  • The pet care industry is notably growing, with premium products taking center stage as consumers shift towards the humanization of pets for their wellness and nutrition needs.  
  • Omnichannel shopping is ever-present for the pet care and nutrition consumer as the retail business continues to experience robust growth amongst inflationary economic concerns.  

Panelists, left-to-right: Andrea Binder, VP of North America Retail, NIQ; Jay Schwartz, Senior Director of Consumer and Market Insights, Petco; Joe Keating, Director of Analytics & Consumer Insights, Hill’s Pet Nutrition; Raha Alavi, SVP of North America Retail, NIQ.

Panelists identify key consumer motivators — emotional connection and humanization

In the fast-growing market for pet care products and nutrition, consumers are motivated by their emotional connections to their animals as well as their personal economics. 

Whether shopping online, in specialty stores, or in general retail outlets, top-quality nutrition matters greatly to pet parents, even as they confront the impact of inflation on their household budgets. 

Panelists from Petco, Hill’s Pet Nutrition, and NIQ unpacked these insights at this year’s Consumer 360 conference in a session titled, “Paw-sitive Growth in Pet.” They discussed how they are making superior data-driven decisions to meet changing market conditions across all shopping channels. 

“To understand pet, you have to understand omnichannel,” said Raha Alavi, SVP of North America Retail, NIQ. “Omni buyers, who make up 42% of pet buyers, represent over 60% of dollar sales.” 

Omnichannel shopping is growing in the pet industry

In-store sales, representing 63% of the total market, grew 10.5%. While online sales, 37% of the market, grew more rapidly at 16.7%. This resulted in a share increase of 1.3 percentage points over the trailing year. 

Notably, growth has come at both ends of the assortment, with pet owners largely undeterred by price increases. NIQ data indicates that private label products showed strong unit sales performance in the last calendar year, gaining 8.8% overall in equivalent units (E.Q.) and 19.4% in dollar sales. Premium pet products gained 11.7% in dollar sales, although unit sales slipped slightly by 0.8% in units. 

The session’s panel discussed how pet parents try not to cut back on pet food due to the impacts of inflation, but may adjust supplies if the budget demands. 

The panelists acknowledged that premiumization, or a shift to higher-end nutrition for valued family pets, has been a key driver of growth. Retailers have experienced growth in both fresh refrigerated and frozen pet food products. The panelists noted that they are seeing more and more pet owners shifting their purchasing toward the humanization of pet products. This is especially apparent with Gen Z customers, who are less price sensitive in the pet category.  

There is a trend of pets-as-people as refrigerated and frozen food take a larger share of the category. The panelists did note that there could be a challenge distributing to outlets in rural markets and commented on the challenge of fulfilling online sales in this space, since safely shipping fresh, refrigerated products to homes is more complex. 

The client panelists acknowledged the benefit of NIQ data to identify trends to refine private brand offerings and/or new product development. Both also said they are looking closely at human trends as next-gen indicators for the pet industry. The data is also important for them to understand generational trends to ensure their products and messages are relevant to the consumer. 

NIQ’s expanded coverage of the pet channel and categories covers the total store, including food, treats, consumables, hardlines, and supplies. It provides a true omni view, across pet specialty, online, and conventional. NIQ provides the pet industry’s broadest and deepest item attribute library, with custom pet characteristics. We are a strategic partner to all the major pet associations, including APPA, WPA, and IndiePet. 

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Read more Pet Industry insights here.