Like any child who grew up with four dogs, I have 1) slept in a dog house 2) barked like Eliza Thornberry and 3) ate a kibble pellet I can only describe as tasting “brown.”
But pet food has come a long way since I had my little snack. “Human-grade” food fills doggy bowls and, just this week, Ben & Jerry’s launched a line of frozen “Doggie Desserts.”
Horsemeat hawking nearly $100 billion industry
Dog food’s earliest recipes, as chronicled by Quartz, should be added to the list of “least fun historical facts” and promptly forgotten—horse meat was a primary ingredient in pet food into the 1940s.
But if we can learn anything from comparing Snoopy’s lifestyle to Jiffpom’s, it’s that pets have dramatically climbed the household status ladder. Spending on pets and pet care has increased 4%–5% every year since 2008. Dog treat sales in particular have spiked 44% in the past five years, per Euromonitor.
The reason why is simple: Most US households (an estimated 57%–67%) have a pet, and that number’s only growing. Animal shelters are being emptied out, with 25% of pet-owning homes adding another to their families last year. And—judging from a sample size of my 70-ish coworkers—many WFHers are adopting their very first good boys and girls, too. (Shoutout to Morning Brew CEO Alex Lieberman’s bernedoodle pup, Rambo.)
Consumer goods giants have noticed the increased spending on kibbles and other bits, and are nudging their noses into the growing category. Roll the acquisition reel…
- General Mills bought upscale pet food maker Blue Buffalo in 2018 for $8 billion.
- Smucker’s acquired Big Heart Pet Brands (the maker of Meow Mix and Milk-Bone) in 2015, which quickly became a “key driver” of sales, and scooped up Ainsworth Pet Nutrition (Nutrish) in 2018 for $1.9 billion.
- Nestlé bought natural pet food brand Lily’s Kitchen last year, adding to its existing portfolio of Purina and Friskies.
Beyond the big dogs, boutique brands for gourmet pet meals, supplements, CBD treats, and more health products have cropped up to cater to anthropomorphizers everywhere. Moving down the supply chain from production to distribution…
If pet store aisles are yellow, e-commerce sites are gold
Online pet food sales grew about 32% last year, spurred by more frequent shopping from home during the pandemic. The industry’s alpha is Amazon, accounting for 39% of all pet food and supplies sales. But legacy retailers are learning new tricks, too:
- PetSmart acquired online pet product retailer Chewy in 2017. Thanks to the tremendous growth in pet e-commerce, Chewy shares gained more than 270% over the last year.
- Petco poured $300+ million into its digital operations during the pandemic. This Thursday, Petco went public to a warm reception from investors, jumping 63% on its first day of trading. (For more on Petco’s IPO, read Retail Brew’s interview with the CEO.)
Zoom out: Pet food sales were already shifting online pre-Covid, but like Hollywood blockbusters debuting on-demand, the pandemic sped up the transition by years.
Warning: Health fads aren’t always good for Fido
Grain-free food has been investigated by the FDA for reportedly causing a heart condition in some dogs. On Monday, a Midwestern pet food company expanded its recall of dry dog and cat food products after more than 70 dogs died and 80 became ill.
- The FDA was empowered to investigate cases like these in 2011 with the passage of the Food Safety Modernization Act.
Zoom out: As greater attention (and money) is spent on pets, animal rights advocates are pushing the legal system to treat pets more like family members rather than property. A few years ago, Alaska became the first state to require courts to take pets’ “well-being” into account during divorce cases.