3 pet food suppliers are dominating the industry — but the competition is heating up
- The top three pet-food suppliers are increasingly threatened by challenger brands.
- A shift in consumer preferences is driving changes in market share.
- Pet owners are quite conscious of their pet’s health, and will pay up for healthier food.
- Now the race is on for pet food companies to sell the best grub.
The market leaders in pet food need to watch their tails.
Currently, three suppliers, Nestle‘s Purina, Mars’ Royal Canin, and Colgate‘s Hill’s are dominating the industry, but they’re facing increased competition as consumer preferences change, UBS analyst Pinar Ergun wrote in a note sent out to clients on Wednesday.
“There are signs that the leading pet food brands are not adapting fast enough to consumers’ changing needs,” Ergun wrote. “This leaves significant market share opportunity for challenger brands.”
But the top three brands should recognize one changing consumer trend: demand for the healthiest pet food.
“In choosing pet food brands pet owners and vets often prioritise nutritional qualities over pricing,” Ergun wrote. With 90% percent of pet owners viewing their pets as family members, according to UBS’ in-depth consumer survey, “there is strong appetite for premium offerings, with willingness to pay-up for proven health benefits.”
Pricing, in fact, is only the number-three concern of consumers. “Being balanced and healthy is the most important factor influencing pet owners’ choice in brands,” Ergun said. “Veterinarian recommendation comes second, followed by pricing.”
And it looks like General Mills‘ Blue Buffalo is picking up some major traction with consumers, and is posing a threat to the top three sellers. Blue Buffalo has grabbed market share, “fuelled by rising demand for premium pet food in the US,” Ergun said.
Companies now need to reach into their research and development budgets to fend off the competition as it is the quality of the product that counts the most.Pet owners are quite concerned with their pet’s diet, and the successful suppliers are curating their products for the health-concerned pet owner.
“Meat content, tailored ranges and natural/organic attributes all rank higher than availability, brand awareness and manufacturer of the product,” Ergun wrote.
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