Pet food volume sales surged over the pandemic, with premiumisation fostering even higher value sales growth. Surges in commodity prices continued generating sharp unit price increases and forced online portfolio reductions. The recessionary environment may cause many consumers to trade down, or increasingly seek convenience by switching to pet specialist retailers, where price increases were more controlled. As high inflation is likely to persist, pet care faces considerable challenges in 2023.
This report comes in PPT.
The sharp volume sales climb within pet care through 2020 and 2021, exemplifies the market’s resilience. However, as inflationary pressures remain high in 2022 and are expected to continue into 2023, consumers face shrinking disposable incomes and spikes in unit prices. In this context, the recessionary environment will prove challenging for many; encouraging downtrading and which could benefit the growing mid-priced pet food range.
2022 has seen many commodities reach never before seen prices. While many market players tried to absorb energy and packaging price increases, agricultural commodity prices, such as wheat, chicken and beef, have become the breaking point for pet food manufacturers to follow through with price increases for consumers. We expect to see even further unit price increases well into 2023 challenging pet owners’ purchases.
Pet food price increases forced many pet owners to look closely at their food budget including spending on their pets. Lower-income pet families have seen their disposable income diminish forcing them to supplement food with scraps or in worst case scenarios - give up their pets. Those still considering pet adoption are expected to either delay or completely refrain from becoming pet parents.
Wide assortment, a quick reaction to the changing market environment, promotional activities and professional consultations on site allow pet specialists to maintain and attract pet owners even when the whole market is facing rising costs. Consultations have become crucial for new pet parents who are choosing the best feed or accessory option but can also guide pet owners to more affordable but still optimal choice when spending is cut.
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