Funviralpark Overall, however, pet food sales are growing positively. Earlier this month, Chewy, her online pet retailer, revealed that 83% of his net sales in the third quarter came from non-discretionary categories like food and healthcare. U.S. pet owners will spend nearly $40 billion on dog and cat food in 2021, up 15% from 2020, according to the latest research on pet food from market research firm Packaged Facts. (he has already increased by 14% since 2019).
When it comes to pet food, General Mills’ struggle is “arguably more corporate-specific,” Gartner director analyst Brad Jasinski told Modern Retail. stable,” he said. “It grew so much before the pandemic and then continued to grow during the pandemic because so many people got pets.”
Similarly, Seth Basham, managing director of equity research at Wedbush Securities, which oversees Petco and Chewie, said demand for pet food is “pretty strong.” “That’s why sales of non-consumables in the industry, especially discretionary hard his goods, are weak,” he tells Modern Retail. “Especially pet food is helping them grow.”
Overall, pet food sales are rising due to inflation, with November prices up 15.7% year-on-year. This is more than double his for the economy as a whole, where consumer prices rose 7.1% year-on-year. On the December 9 earnings call, Chewy CEO Sumit Singh said, “At Chewy, we increased the number of units and prices in the third quarter,” adding, “We plan to do the same in the third quarter of 2023. I plan to,” he said.
Blue Buffalo is an ultra-premium brand that offers prescription, high-protein, targeted nutrition foods. For General Mills, “there are certainly supply challenges, but we also need supply at the right price,” he said Jashinsky. “Not only do we try to find the ingredients, we also need to find them at a reasonable price so that we can keep our margins.”
According to Packaged Facts, in January, 29% of pet owners said they were facing a “significant challenge” of rising pet food prices. Still, even with inflation, pet owners are unlikely to cut spending, the data shows. “Many pet owners are willing to spend money on pets. “You’re feeling it,” Jasinski said. .
Another factor holding General Mills back is competition, Packaged Facts pet market analyst David Lummis told Modern Retail. Blue Buffalo started out in specialty retailers, but moving to the mass market “in my opinion they automatically lose some of their reputation in terms of being super premium,” he said. “More and more super premium brands are entering the market.
A large part of Blue Buffalo’s business is dry food. However, fresh and frozen pet food products in particular are growing in popularity, with the frozen category expected to reach $23 billion by 2032, according to market research firm Future Market Insights. Freshpet, a refrigerated pet food brand that partners with, said sales in the second quarter were up 34.4% year-on-year. Earlier this year, PetSmart entered into an exclusive partnership with Nom Nom and Petco launched the Whole Hearted Fresh Recipes line co-created with his JustFoodForDogs. His DTC brands such as PawFoods have also emerged to appeal to pets with special diets such as gluten-free.
The fresh pet food category “is still a very small part of the market, but it’s booming,” said Lummis. It looks like General Mills needs to do something a little different with Blue Buffalo. Alongside fresh produce, freeze-dried morsels and the like, whether he’s embraced one of the other big trends on the market. …but much of the Super Premium’s attention is in its fresh wave. ”
In preparation for the next quarter, General Mills said it is ramping up its dry dog food and treats manufacturing capacity by leveraging a new distribution center and expanding capacity at existing warehouses. Overall, the CEO said on the phone:
