Petcare: natural trend drives return to growth

It’s officially the year of the ‘fur baby’. The continued humanisation of domesticated animals proved a stronger influence than ever on the petcare market this year. “Shoppers are increasingly treating their pets as members of the family and, as such, petfood trends are mirroring the eating habits of owners,” says Nielsen analyst Rachel Dodd.

In particular, this is driving the growth of the natural segment, as the human ‘wellness’ trend extends to cats and dogs.

The higher prices of these natural options helped the petcare category return to growth after last year’s slump into the red. That’s despite a fall in volumes caused by a stagnant pet-owning population and increased online competition.

“The demand for natural, high-meat products is strong; premiums are high; the sector is growing and attracting a lot of new players,” says Tony Parkinson, MD of HiLife, which this year launched It’s Only Natural for Dogs (see Top Launch).

Proof of the trend lies in the performance of health-focused brands such as Inspired Pet Nutrition’s Harringtons, whose value shot up 16.3% to £45.1m as volumes grew 9.6%. The trend also saw disruptive direct-to-consumer services come to prominence.

Most prominent of all was Tails.com, the four-year-old dog nutrition service that in April sold a majority stake to Nestlé Purina Petcare for an undisclosed sum.

“Tails.com is undoubtedly one of the category’s biggest and most successful disruptors,” says Liz Wood, Purina’s marketing development organisation director. “Our investment in Tails.com this year demonstrates our continued commitment to innovative business models and to act on consumer trends in high-growth categories.”

Purina’s move made a lot of sense, notes Matthew Carr, client solutions director at Integrated Food Projects. “With competition in the category growing, and more consumers looking for quality petfood, established manufacturers are making significant investments to grow market share. It could be in new brands or capital projects that improve production capabilities and allow the producers to scale up and/or diversify.”

All this change has taken its toll on more mainstream brands. Mars Petcare saw its two leading lines - Pedigree and Whiskas - lose £17.6m under growing pressure from smaller and online businesses, not to mention increasingly ambitious own-label offerings.

Nevertheless, there were some success stories in the form of Felix, Gourmet and Sheba, each of which racked up over £3m in extra sales. There is “still very much a consumer appetite for traditional petfood brands” insists Purina’s Wood. “The large majority of pet owners still purchase big brands.”

TOP LAUNCH

It’s Only Natural For Dogs, Town & Country

Keen not to miss out on the premium petfood craze, HiLife launched this natural, grain-free range of wet food in February. The six recipes, which include combos such as Chicken Breast with Sweet Potato & Kale, are available across broth, sauce and jelly. Each is made with “high-quality ingredients we’d eat ourselves” says the brand. Plus, all are free from soya, with no artificial colours, flavouring or preservatives to boot. Sounds good enough to eat.