What the Data on Private Label Pet Products Reveals – PetProductNews.com

Retailers can reap many benefits from private label branding.

Retailers can reap many benefits from private label branding.
What’s the one thing every pet product retailer has—or if not, should have—that no other retailer does? Exclusive brands including private labels (aka store brands) offer retailers an inimitable opportunity to stand out from the competition with affordable on-trend products not available anywhere else. Private label products have long been a prominent part of the market, with offerings from pet specialty retailers and mass-market retailers serving as a potent shopper draw. With their premium styling, lower prices and higher margins, private labels are a win-win for retailers and pet owners, and all the more so at a time when supply chain challenges and inflation are causing product shortfalls and driving up prices, forcing pet owners to make product substitutions.
During the pandemic, private label products did not perform as well on a dollar basis as their national brand counterparts, with dollar sales up 4 percent for the 52 weeks ending June 13, 2021, compared to 8 percent growth for national brands, based on Nielsen data. However, during the same period, private label unit sales jumped 11 percent, compared with almost no unit growth for national brands. While the national brand dollar increases sales were propelled by higher prices as opposed to volume gains, volume increases far outpacing dollar gains spotlight the greater affordability of private label. Further illustrating the price point opportunity, private label’s price per unit declined 6 percent, while the unit prices for national brands rose by 8 percent, according to the IRI Consumer Connect survey from August 2021. MRI-Simmons data trended from fall 2019 through spring 2020 show that private label usage rose steadily among households with dogs from fall 2019 to spring 2021, with a similar trend for cats starting in spring 2020. For both animal types, usage subsequently dropped off a tad while remaining significantly elevated over the fall 2019 levels.
As of spring 2022, nearly one quarter (24 percent) of dog and cat owners had used a private label pet product in the past six months, with 17 percent using only private label in at least one pet category. Topping the category chart is dog treats, with 18 percent of dog treat purchasers using private label treats in the past six months, and 9 percent using private label only. Other high-usage categories include wet dog food, dry dog food and cat litter. That cat food and treats do not score higher in private label usage is likely less a factor of cat owners being less receptive and more a factor of fewer options being available.
In the pandemic-transformed economic environment, pet shoppers are prime candidates for competitively priced private labels, which are especially important to a pet specialty channel navigating the double challenge of e-commerce and mass premiumization. There’s been no shortage of activity of late, including in cutting-edge areas. Recent introductions include Petco’s WholeHearted Fresh Recipes, developed in conjunction with JustFoodForDogs; Chewy’s fresh pet food addition to its premium Tylee’s brand; Pet Supplies Plus’ OptimPlus pet food line; Walmart’s Pure Balance Pro+ line of veterinarian-formulated pet food products; and Target’s Kindfull pet food line. As other signs of the private label times, in 2020 C.J. Foods acquired American Nutrition, creating “quite possibly the largest private label pet food manufacturer in the world,” and in December 2021, Diamond Pet Foods acquired J.M. Smucker’s private label dry pet food business.
A robust private label program may be a no-brainer for large retailers. But private label can present a challenge to independent pet stores without the resources to develop a store brand program of their own. Additionally, independents are contending with the loss of exclusivity of superpremium brands and mass premiumization, competition in dense metro areas from boutique pet specialty chains positioning as neighborhood stores, and the “omni-channelization” of virtually all chain store competitors. Standing firm with indies, some brands are staunchly maintaining their independent-only sales criteria. Among the most devout is family owned Fromm Family Pet Food, which remains “committed to neighborhood pet specialty retailers and family-owned retailers” (frommfamily.com). At the same time, even rigorous distribution deals don’t always keep products out of the hands of unscrupulous online sellers, further underscoring the need of even the smallest pet retailer to factor proprietary brands into the shopper loyalty equation.
David Lummis is the lead pet market analyst for Packaged Facts, a division of MarketResearch.com. The data cited here are sourced primarily from Packaged Facts’ latest pet report, Pet Food in the U.S., 16th Edition.
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