Transcript U.S. Pet Food Market Update, 2011: Marketing the Benefits of Pet Ownership David Lummis Packaged Facts Senior Pet Market Analyst.

U.S. Pet Food Market Update, 2011:
Marketing the Benefits of Pet Ownership
David Lummis
Packaged Facts
Senior Pet Market Analyst
Today’s Agenda
 U.S. pet food market update:
State of the Market Summary
 Trends in pet/human health
correlation research
 Target demographics and action
opportunities
Report Resources
 U.S. Pet Market Outlook, 2011-2012
(April 2011)
 Pet Food in the U.S., 9th Edition
(March 2011)
 Pet Supplements and Nutraceutical Treats,
3rd Edition (February 2011)
 Natural, Organic & Eco-Friendly Pet Products in
the U.S., 3rd Edition (July 2010)
State of the Market: 2011
U.S. Pet Market Retail Sales by Category:
2010 vs. Year Ago
(in billions)
Classification
2010 $ Sales
% Change Over 2009
Veterinary Services
$19.69
7.0%
Pet Food
$18.35
2.8%
Pet Supplies
$10.92
2.0%
Other Pet Services
$6.11
5.0%
Total
$55.07
4.3%
Source: Packaged Facts Pet Market Outlook 2010-2011
% Change in U.S. Retail Sales of Pet Food, 2006-2015
YEAR
% Change
2015
3.6%
2014
3.6%
2013
3.6%
2012
3.5%
2011
3.0%
2010
2.8%
2009
5.0%
2008
5.4%
2007
6.1%
2006
5.0%
2010 Sales = $18.4 b
Source: Packaged Facts
From Recession to New Normal
Shopper/Retailer Trends
–
–
–
–
–
–
–
–
–
–
–
coupons
loyalty cards
meal planning
shopping lists
delayed gratification
lowered standards
store switching
brand switching
channel switching
clarifying want versus need
reassessing convenience (larger
packages, smaller packages, etc.)
“I am spending less on pet products these days
because of the economy.”
Dog Owners
Overall
Natural Dog
Food/Supply
Purchasers
Cat Owners
Overall
Natural Cat
Food/Supply
Purchasers
12%
15%
10%
13%
Somewhat Agree
24
27
23
26
No Opinion/Not
Applicable
24
18
22
20
Somewhat Disagree
26
25
28
27
Strongly Disagree
14
15
17
15
Level of Agreement
Strongly Agree
Source: Packaged Facts national online survey, May/June 2010
Market Exits
Pet Promise
Dog Whisperer
Goodlife Recipe Dog Food
“I think many pet products are becoming too expensive.”
Source: Packaged Facts online pet owner poll, February 2011
Private-Label Pet Food Introductions, 2000-2010
Market/
Category
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Reports
Dog Food
0
4
5
4
3
0
8
4
1
6
23
Cat Food
0
0
2
8
0
1
2
3
4
1
7
Total
0
4
7
12
3
1
10
7
5
7
30
SKUs
Dog Food
0
8
15
19
6
0
47
18
9
10
109
Cat Food
0
0
14
40
0
1
7
10
28
4
28
Total
0
8
29
59
6
1
54
28
37
14
137
Source: Product Launch Analytics; Packaged Facts. This material is reprinted with permission.
Premium Private Label
Target’s Boots & Barkley Multi-Flavored Dog Biscuits
Wegman’s Bruiser Complete Nutrition Dry Dog Food
56.4%
2009
43.6%
2008
50.6%
49.4%
2007
50.2%
49.8%
54.2%
2006
45.8%
57.3%
2005
42.7%
2004
43.6%
63.6%
2003
2002
2001
2000
1999
$70K+ Household
Share of U.S. Pet
Food Expenditures
56.4%
36.4%
67.2%
32.8%
67.8%
32.2%
71.9%
28.1%
69.1%
30.9%
20%
Under $70K+ % Share of Total Spending
80%
$70K+ % Share of Total Spending
Top Marketing Claims by Number of
New Pet Food Product Reports, 2008-2010
Package Tag/Claim
2008
2009
2010
Natural
159
182
211
High Vitamins
111
114
106
Upscale
139
168
88
High Protein
89
75
87
High Minerals
93
84
86
No Preservatives
89
99
75
Real
54
48
63
No Wheat
67
56
61
No Artificial Color
67
58
45
Low Fat
45
34
41
Source: Product Launch Analytics; Packaged Facts. This material is reprinted with permission.
Dog or Cat Ownership Rates by Animal Type: 2007-2010
(percent of U.S. households)
2007
2008
2009
2010
%
%
%
%
Any
51.9%
54.1%
53.3%
53.0%
Dogs
34.9
35.2
35.9
36.0
Cats
25.6
26.7
26.1
24.8
Fish
7.8
7.4
6.9
6.4
Birds
4.6
4.9
4.2
3.2
Rabbits/
Hamsters
2.1
2.1
2.0
1.6
Reptiles
2.0
2.1
1.7
1.6
Other
2.9
2.9
2.7
3.1
Classification
Note: Percentages are based on a total of 111.9 million households in 2007, 113.5 million households in 2008, 114.2 million
households in 2009, and 114.6 million households in 2010.
Source: Pet Food in the U.S., 9th Edition; compiled by Packaged Facts based on Experian Simmons National Consumer Studies
The U.S. pet industry cannot sustain
healthy growth without increasing rates
of household pet ownership.
The Holistic Human-Pet Health Connection
Trends in Pet/Human Health
Correlation Research
Mars’ Waltham Center for Pet Nutrition
• August 2009: Waltham Center for Pet Nutrition commits $2 million to the
Eunice Kennedy Shriver National Institute of Child Health and Human
Development (NICHD) for Human-Animal Interaction (HAI) research.
• The NICHD (division of National Institutes of Health) combines the
donation with funding from the National Institute of Nursing Research to
form the first formal program in HAI.
• Previous studies have been small scale, observational or anecdotal.
• Mars’ donation will span four years and help fund NICHD studies in three
areas:
• Impact of human-animal interaction on typical development and
health;
• Clinical trials focusing on role animals play in physical and
psychological therapeutic treatments; and
• Impact of animals on public health, including cost-effectiveness of
animals in reducing and preventing disease.
Mars’ Power of Pets Program
 Launched in September 2010, in collaboration with YMCAs in five
cities to promote benefits of pet ownership to human health.
New York City – The YMCA of Prospect Park, October 16
Chicago – The Hastings Lake YMCA, October 23
Washington, D.C. – The YMCA of Silver Spring, October 24
Nashville, Tenn. – The Brentwood YMCA, November 6
Portland, Ore. – Spring 2011
 Mars study of 1,000 US pet owners:
 Improving overall well-being is main reason for having a pet
(66%)
 Companionship (61%)
 Positive emotions associated with pets: happiness (83%), love
(70%), calmness (65%), excitement (31%), invigoration (18%)
Human Animal Bond Research Initiative Foundation (HABRI)
Petailing 2010 Leadership Conference
Bob Vetere, President, APPA and President of HABRI Foundation.
Founding Sponsors—PETCO and APPA
 Support federal research to provide scientific evidence
of health benefits for humans from their relationships with their pets.
 Form broad-based coalition of organizations and entities that will create
central database of scientific research on the human health benefits of
companion animals, under the leadership of Dr. Alan Beck at Purdue
University.
 Educate and inform Congress of the important role that our pets play in
human health.
 Lobby Congress to create a Human Animal Bond Research Center within
the National Institutes of Health.
Delta Society





Pet Partners® (therapy animal program)
Animal-Assisted Therapy Professionals Resources
National Service Animal Resource Center
Resource Center: Research and Articles relating to the
human-animal bond
YouTube Video
Target Demographics
and Action Opportunities
Dog or Cat Ownership Rates by Generational Cohort: 2010
(percent of U.S. households)
Gen Y Adult
(18-29)
Gen X
(Age 30-44)
Boomers
(45-64)
Seniors
(65+)
50.1%
58.6%
58.9%
37.2%
Dogs
34.7
42.4
39.0
23.3
Cats
18.7
27.0
29.3
17.7
Fish
10.2
8.3
6.3
1.8
Birds
2.0
2.4
4.1
3.5
Any Other
7.6
8.8
4.7
1.3
Classification
Any Pet
Note: Percentages are based on a total of 114.6 million households in 2010.
Source: Pet Food in the U.S., 9th Edition; compiled by Packaged Facts based on Experian Simmons National Consumer Study
Dog or Cat Ownership Rates by Generational Cohort: 2010
(index of U.S. households)
Gen Y Adult
(18-29)
Gen X
(Age 30-44)
Boomers
(45-64)
Seniors
(65+)
Any Pet
95
111
111
70
Dogs
96
118
108
65
Cats
76
109
119
72
Fish
159
129
98
27
Birds
62
75
127
110
Any Other
137
158
85
24
Classification
Source: Pet Food in the U.S., 9th Edition; compiled by Packaged Facts based on Experian Simmons National Consumer Study
Low Incidence Pet Ownership Population Segments
 Hispanics
 African
Americans
 Asians
 Children
 Seniors
 CHART
Source: Pet Food in the U.S., 9th Edition; compiled by Packaged Facts based on Experian Simmons National Consumer Study
The Healing Power of Pets
Dr. Marty Becker, resident vet on ABC
TV's Good Morning America
Describes how pets can prevent, detect,
treat, and in some cases cure a variety of
maladies, from arthritis to asthma, and
from Alzheimer's to depression.
• Decrease cardiovascular risk factors
• Motivate sedentary owners to
exercise
• Help people deal with chronic pain.
Delta Society





Pet Partners® (therapy animal program)
Animal-Assisted Therapy Professionals Resources
National Service Animal Resource Center
Resource Center: Research and Articles relating to the
human-animal bond
YouTube Video
Delta Society — Benefits to Kids
Delta Society — Benefits to Adults
Delta Society — Benefits to Seniors
APPA—Pets Add Life
APPA—Pets Add Life
Pet Care Trust
• Formed in 1990 by the American Pet Products Association (APPA), the Pet
Industry Distributors Association (PIDA) and the World Pet Association (WPA)
to:
• Sponsor and disseminate information on companion animal programs and role
of companion animals in improving quality of life of pet owners.
• Collect and disseminate educational materials to teachers and schools, the
media, and the pet industry on responsible ownership and pet care.
• Interact with associations, organizations, and societies to coordinate programs
of mutual interest.
• Educate the public on benefits of the human animal bond and human
companion animal bond.
• Be an information resource for the general public and pet industry.
Pet Care Trust—Pets in Classroom Program
• Program launched in September 2009
• Expands on Fish in Classroom Program
• Online program offers grants to teachers
who include pets in lesson plans
• Instilling compassion and encouraging
responsible pet care
Celebrity PR
Social Media
“My pet has a positive impact on my physical health.”
Source: Packaged Facts online pet owner poll, February 2011
Dog or Cat Ownership Rates by Animal Type: 2007-2010
(percent of U.S. households)
2007
2008
2009
2010
%
%
%
%
Any
51.9%
54.1%
53.3%
53.0%
Dogs
34.9
35.2
35.9
36.0
Cats
25.6
26.7
26.1
24.8
Fish
7.8
7.4
6.9
6.4
Birds
4.6
4.9
4.2
3.2
Rabbits/
Hamsters
2.1
2.1
2.0
1.6
Reptiles
2.0
2.1
1.7
1.6
Other
2.9
2.9
2.7
3.1
Classification
Note: Percentages are based on a total of 111.9 million households in 2007, 113.5 million households in 2008, 114.2 million
households in 2009, and 114.6 million households in 2010.
Source: Pet Food in the U.S., 9th Edition; compiled by Packaged Facts based on Experian Simmons National Consumer Studies
Thank You!
David Lummis
Packaged Facts
Senior Pet Market Analyst
Tel:
Email:
504-931-6322
[email protected]