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02/22/2022

Pet Products Report: Dressed to the Fours

Store brands are catering to demand for premium pet products and services while riding a wave of success in the pet care category.
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Reddy SoHo store interior

At the Petco Reddy SoHo store in downtown Manhattan, Fido gets the four-star (or four-paw) treatment. He can spend the afternoon relaxing at the high-end boutique, testing out the comfy doggie beds and getting a custom fitting for a monogrammed vest, all while slurping fresh water and snacking on a whipped cream cup for pups.

When Petco extended the Reddy brand (part of the retailer’s owned brand portfolio that also includes WholeHearted, a nutrition brand, and Well & Good, a grooming, supplies and supplement brand) into its flagship store last October, the move spoke volumes about the strength of the overall pet category. The U.S. pet care industry, which includes pet food, supplies and treats, grooming and veterinary services, surpassed $100 billion in sales for the first time in 2021, reaching an estimated $109.5 billion, according to Statista. The momentum from the pandemic-induced adoption boom did not slow down, as growth rates within the category were comparable to those of 2020, according to data from IRI.

Reddy has seen double-digit growth since its introduction in 2018, driven by category expansion across apparel, travel, home and accessories, according to Nick Konat, the now former chief merchandising officer at Petco. That success is emblematic of underlying growth trends in the category—namely the desire among pet owners to have the best for their furry friends and to treat them like members of the family.

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Nick Konat
Nick Konat, former chief merchandising officer at Petco

“Macro trends such as the humanization of pets and premiumization of pet products are driving consumers’ purchasing decisions,” said Konat. “Reddy specifically addresses a white space in the market across both national and private brands by delivering clever, effortless solutions for pet parents, with an aesthetic that fits seamlessly into the urban millennial lifestyle. We know that Reddy shoppers care about sustainability [and engage in] on-the-go and outdoor activities, so we’ve created a brand that perfectly caters to this audience.”

TARGET, ALDI EXPAND PET PORTFOLIOS

Private label pet care brands have been coming on strong lately, with new entrants led by Target’s Kindfull, a high-quality brand of dog and cat food, introduced last August. This year, Aldi plans to unveil more new products under its Heart to Tail line, including apparel and toys, according to Kate Kirkpatrick, director of communications at Aldi U.S. “We’ve seen the most growth with our nonfood Heart to Tail products,” she said. “We’ve been testing out new products from the line as part of our limited time Aldi Finds, and customer feedback has been incredibly positive.”

Despite the increased activity, private label’s share of the overall pet care category has remained relatively flat, rising from 17.2% in 2019 to18.1% in both 2020 and 2021, according to data provided by NielsenIQ. Still, private label manufacturers see opportunities for further growth in areas like plant-based and all-natural pet foods.

“Growing consumer adoption of the flexitarian lifestyle is fueling interest in closer-to-nature, plant-forward pet foods using alternative proteins like beans, pulses and ancient grains,” said Amy McCarthy, vice president of pet solutions at ADM Animal Nutrition in St. Louis. “Additionally, pet parents are shopping for customizable functional nutrition solutions that support pet well-being, including digestive health, immune function, oral care and healthy aging. Private label brands can rely on ADM’s pet nutrition portfolio and science-based solutions to develop quality products that meet market trends and support overall pet well-being.”

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dog in sweater

HOT SEGMENTS: TREATS AND CHEWS

One of the byproducts of stay-at-home trends during the pandemic was that consumers sought out more items like treats and chews — two of the strongest areas of the pet market for private label manufacturers. “We’ve been shipping truckloads of training treats and chews,” said Stephen Trachtenberg, president of Tier 2 Processing in Saint Charles, Minn. “While we’re seeing growth across the board, those segments are really hot right now and a lot of the growth is coming from private label.”

Trachtenberg says private label is catching up to national brands through advancements in pet food product quality that leverage the humanization trend with more recognizable ingredients like carrots and turnips. Still, he said grocery retailers need to do more to improve the look and feel of pet food aisles in order to level the playing field for private brands.

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Reddy SoHo store outside

When choosing between national and store brands, Konat said that consumers’ shopping habits vary by audience segment and product category. “Some consumers may be drawn to national brands with high brand awareness, and for others, owned or private label brands may appeal to their desire for clever innovations and unique designs,” he explained.

“Shoppers, especially our guests, are increasingly discerning, with particular interests based on their pets’ unique needs, such as age, activity level and dietary requirements.”

Thankfully, pets themselves tend to keep an open mind (and mouth) when it comes to new products and experiences. As Konat tells the story, one four-year-old Shih Tzu has been visiting Reddy SoHo nearly every day since opening weekend. “The dog’s pet parents shared that the boutique is one of her favorite places to visit and that they absolutely love curating fashionable Reddy outfits for her that only add to the pup’s magnetic presence and bring joy to all those around,” he said.

Apparently, life is not so “ruff” all around in this category.