Australia’s pet owners have become increasingly conscious of providing their pets with the best possible life – a view that has been clearly demonstrated in the major trends seen in the sale of pet food, writes Branko Miletic.
In monetary terms, according to Galaxy Research, Australian pet owners are spending over $3 billion on pet food a year. Dog food accounts for more than half of this at $1.6 billion, or 53 per cent. Cat food also comprises a significant proportion at $1.1 billion or 36 per cent of all pet food sales. Together, dog and cat food represent almost 90 per cent of all pet food expenditure.
These figures are hardly surprising since there are estimated to be more than 25 million pets in Australia – more than there are people – with nearly 5 million of Australia’s 7.6 million households home to pets. At 63 per cent off the population, Australia has one of the highest rates of pet ownership in the world.
From the horse’s mouth
FMCG analysts Euromonitor International has also found that Australians have a strong emotional attachment to and value their companion animals, with most people considering them members of the family.
At the same time, the global financial crisis had a profound effect on Australian household spending and savings patterns. While the Australian economy never dropped into recession, job certainty was no longer assumed and Australians started spending less and saving more.
This reversed the steadily declining household savings rate, a trend which had been in place since the 1970s.
Euromonitor International has also noted that consumer spending cut backs have been most noticeable when it comes to discretionary spending. However, after looking at all the figures, one sector that seems largely impervious to these economic downturns is pet food. In fact, pet food has been compared to baby food due to its resilient performance.
Paw-sing to read the trends
According to The Animal Health Alliance and their latest Pet Ownership Report, there are a number of trends that are clearly visible in Australia when it comes pet food.
Premiumisation
Consumers are prepared to spend more on their pets, which has seen pet food become increasingly sophisticated, particularly in the premium end of the market. Sales of premium dog and cat food products have continued to grow steadily over the past five years, with seven per cent year on year growth in current value terms.
This premiumisation of pet food is impacting the economy and mid-priced segments of the market, which are expected to come under increasing pressure as consumers trade up to premium products.
Packaging
Packaging has become more sophisticated to reflect the premium offerings and key selling points. For wet pet food, product offerings have tended to move away from large pack sizes to multi-pack single serve portions. To make premium products more affordable, premium dry dog and cat food has increasingly become available in large air tight resealable packs.
This has provided an attractive option for pet owners wanting to economise without sacrificing quality. In non-grocery channels the 3kg pack size is more common, compared to 500g to 1.5kg seen more predominantly in grocery retailers.
Dry pet food is most commonly packaged in flexible plastic and does not yet reflect the trend towards more sustainable packaging options.
Health and Wellness
Just as Australians have become more conscious of having a healthy lifestyle and diet, so too have these become considerations when it comes to buying pet food. Health and wellness claims have become more common in the pet food sector, a trend that is occurring at all price points, including private label offerings.
An increasing number of products boast added vitamins and minerals, and/or that they address specific health concerns. These include weight control, dental hygiene and digestive health. The idea of all-natural, preservative – free and organic products has also permeated the pet food market.
Segmentation
The market has become more and more segmented to offer pet owners products that address specific needs or concerns. This includes the development of products targeted to cats and dogs at different life stages, such as puppy/kitten, ‘mature’ and ‘senior’.
The health and wellness trend has also driven segmentation in pet foods, with different product offerings such as weight control, dental hygiene and digestive health now commonplace.
Private Label
Private label pet food offerings have increased alongside a range of other product categories on supermarket shelves, and in 2011 accounted for 10.7 per cent of all pet food sales. Woolworths has the largest share of the private label market, and the sixth largest share (2.4 per cent) of the total pet food market.
Grabbing the issue by the tail
According to Duncan Hall from the Pet Food Industry Association of Australia (PFIAA), there are many other factors that have had a direct influence on the choice and type of pet food Australians are purchasing.
“There has been a profound change in the past 20 years in the type of pet food sold in this country,” said Hall.
This is directly related to the types and sizes of pets Australians are now keeping.
“A lot of new pet foods out there are in response to the types of pets we have,” said Hall.
“For example, due to the popularity of certain small dog breeds, we have seen a move away from the large dog food portions to smaller, single serve sizes.”
“However, a lot of pet food trends also mirror the trends we have been experiencing with human foods – like the move to all-natural foods as one example.”
“There are also new types of pet foods that have been developed in response to veterinarians’ requirements for foods that help pet recovery and recuperation from illness and injury.”
Hall also noted that the channels for distribution for pet food sales have increased.
“It’s moved away from just being able to buy pet food in the supermarket to purchasing pet food in pet specialty stores and barns, from the vet and also online,” he said.
The need for proper labelling
Much like with human foods, then there is the issue of labelling.
According to Hall, the pet food manufacturing industry has worked in conjunction with a number of groups including the RSPCA, veterinarians, pet food manufacturers and Standards Australia to come up with a national standard for pet food labelling, also known as AS5182: Manufacturing & Marketing of Pet Food.
“AS5182 was developed to promote prepared pet food as the preferred method of pet nutrition reinforced through the establishment and self-regulation of industry standards,” noted Hall, who added that the “PFIAA was instrumental in establishing AS5812.”
So whichever way you cut and dice the pet food trends in Australia, one thing is for sure – this country will continue to provide a standard of food to its millions of beloved four and two legged friends that is second to none.