LA Times: Small pet stores see healthy growth of organic food sales

Sales of premium-priced organic and natural pet food are expected to grow three times as fast as pet food sales overall through 2015.

Lance Castro, left, and Guy Miracle, owners of the Modern Dog in Venice, sell several brands of freeze-dried raw food and premium kibble. “It’s done wonders for our business,” Castro says. (Ricardo DeAratanha, Los Angeles Times)

By Cyndia Zwahlen

February 7, 2011

Organic, raw and even gluten-free food choices aren't just for people anymore.

These options are showing up at local pet shops that are looking to distinguish themselves from big-box competitors. After a slowdown in sales of premium-priced food during the recession, independent pet shops said the sector was recovering.

At the Modern Dog, a boutique in a Venice bungalow, co-owner Lance Castro was looking to add two new brands of freeze-dried raw food and premium kibble to the seven he already sells.
"It's done wonders for our business," said Castro, who opened the Abbot Kinney Boulevard store with Guy Miracle five years ago.

The store's popular Sojos dehydrated dog food mix of sweet potatoes, turkey, apples and flax meal, among other ingredients, costs $21.99 for a 2-pound bag, to which water is added to make 10 pounds of food.

Castro said he was looking at sites for a second location where he plans to have a refrigeration unit for fresh and frozen raw-food brands.

Nationwide, annual retail sales of organic and natural pet food are expected to grow three times as fast as pet food sales overall through 2015, according to an industry report to be released this week by the Packaged Facts market research company.

Industry analyst David Lummis, who wrote the report, estimated that natural and organics would grow 12% a year on average, hitting $2.8 billion in 2015. By comparison, he expects an average 4% annual growth rate for the entire pet food market over the same period. Overall pet food sales will reach $22.1 billion in 2015, Lummis said.

"People are treating their dog food like some people are treating their baby food," said Todd Martin, vice president of marketing for Castor & Pollux Pet Works, a Clackamas, Ore., company that makes organic pet food and treats. "They want to know it's safe, and they want to know it's quality."

Still, organic pet food — which costs as much as 30% more than non-organic — remains a tiny part of the overall market.

Many independent shops, which are in the vanguard of the organic food sector, got a boost in business in 2007 when pets died from eating food that contained imported wheat gluten and rice protein contaminated with melamine. The poisonous contaminant even showed up in some brands sold as being natural.

As with food for people, there are no regulations governing the word "natural" on pet food labels. But pet foods marketed as organic must meet the same U.S. Department of Agriculture standards as human food in the category, according to USDA spokesperson Soo Kim.

Annual sales of organic pet food increased tenfold from 2002 to 2009, when sales hit $84 million, according to the Organic Trade Assn.

Now that organics are becoming more popular, some large pet store chains are also carrying them, said Joan Storms, an analyst at Wedbush Securities in Los Angeles.

But the more exotic raw and organic pet food is still mostly the province of independent shops.

Neal Massa is co-owner of My Pet Naturally in West Los Angeles, where customers can find raw elk meat for $7.49 a pound and raw chicken and lamb for Fido for about $4 a pound.

"My clientele are probably mostly single, more single women than not, and what I am finding is that these are their kids," Massa said, referring to his customers' pets. "So you are going to spend a little bit more money for pet food."

Full Article: Pet food: Independent pet stores see growing sales of organic and natural pet food - latimes.com

Sales of Pet Supplements for Dogs and Cats Not Recession Resistant, but Nevertheless Resilient

Sales of Pet Supplements for Dogs and Cats Not "Recession Resistant," but Nevertheless Resilient

New York, January 11, 2011 — Making good on its famed "recession resistance," the overall U.S. pet industry has fared well during the recession relative to many other consumer packaged goods industries, but pet owners have not been immune to the economic downturn. As a result, certain industry segments saw growth stall in 2009, including the pet supplements industry. However, Pet Supplements and Nutraceutical Treats in the U.S., 3rd Edition by market research publisher Packaged Facts forecasts a return to strength for supplement sales as the optimism of pet owners gradually recovers in harmony with the general economy.

"As the economy improves, so should all things pet, but that recovery continues to appear modest," says David Lummis, senior pet market analyst for Packaged Facts. "Spending on supplements will increase but ‘restraint’ will likely continue to characterize how pet owners shop and what they buy during 2011 and even 2012, making value appeals based on pet health, safety, professionalism, practicality, and yes, pricing, more important than ever."

Packaged Facts estimates total U.S. retail sales of pet supplements and nutraceutical treats at more than $1 billion in 2010, reflecting a compound annual growth rate (CAGR) of 4% during the five–year period beginning in 2006. Sales growth stalled in 2009 and 2010 as the recession took hold and held on, a slow–down attributable almost entirely to a downturn on the equine side. As a result, the small animal category–including products for dogs and cats–gained ground between 2006 and 2010, increasing from 45% to 52% of the market and surpassing equine as the larger category last year.

U.S. retail sales of pet supplements and nutraceutical treats are expected to begin to pick back up in 2011, with the annual sales growth regaining steam through 2015. By this account, the annual percentage increases will rise from more than 2% in 2011 to almost 7% in 2015, lifting sales to an estimated $2 billion. Growth will be considerably faster on the small animal side than on the equine side. For both animal classifications, the pace will be faster in nutraceutical treats, which will continue to gain ground because of their indulgence advantage and a steady influx of more heavily marketed products. Ultimately, small animals will account for 58% of the market by 2015.

Pet Supplements and Nutraceutical Treats in the U.S., 3rd Edition segments the market into two categories–supplements and nutraceutical treats (i.e., those containing supplements or novel botanical ingredients addressing specific health conditions, such as glucosamine for joint health)–with a primary focus on products for dogs and cats, but also extending to horses and other types of companion animals including birds, small mammals, and reptiles. The report provides a forward–looking examination of the market from every angle, including breakouts by supplement type and retail channel, analysis of the complex and evolving regulatory situation, competitive structure and marketing trends, new product tracking, and consumer profiling. For further information, please visit: http://www.packagedfacts.com/Pet-Supplements-Nutraceutical-2588715/.


About Packaged Facts —Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services. To learn more, visit: www.packagedfacts.com. Follow us on Facebook, LinkedIn and Twitter.

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For Immediate Release
Contact:
Jenn Tekin
Packagedfacts.com
(240) 747-3015
jtekin@packagedfacts.com

Economically Potent and Increasingly Acculturated Latino Consumers Spend More, Display Strong Financial Optimism

New York, December 21, 2010 — The United States population of Hispanic consumers wields a formidable combination of fiscal optimism and buying power in excess of $1 trillion, making progressively more acculturated Latinos a demographic capable of shaping the nation’s future economic and marketing trajectory, according to Latino Shoppers: Demographic Patterns and Spending Trends among Hispanic Americans, 8th Edition by market research publisher Packaged Facts. Hispanic buying power is projected to reach $1.3 trillion in 2015, a cumulative increase of around 25%.

"Although suffering their full share of job losses and foreclosures, Hispanic consumers are more optimistic than non–Hispanic white consumers about their own personal financial situation and about the future of the American economy," says Don Montuori, publisher of Packaged Facts. "Between 2008 and 2009 above–average growth in the Hispanic population caused aggregate spending by Latino households to increase slightly even as spending declined in non–Hispanic households. Considering that one in six Americans are now of Hispanic heritage, Latino consumers will remain influential over the ensuing years, especially because there are a significant number of high–income Latino households."

Marketers must be aware of how increasing acculturation will affect the decisions of Latino shopping behaviors. Compared to their low–acculturation counterparts, high–acculturation Latinos are much more likely to own credit cards, take out loans and have health and life insurance, according to the report.  They are also less influenced by advertising and product placements but are much more alert to in–store promotions. Additionally, they are far more likely to shop and buy online and from catalogs. Packaged Facts further reveals that more education leads to better paying jobs and increasing influence among high–acculturation Latinos, who are more likely than their low–acculturation counterparts to work as managers and professionals, are more likely to own their own homes, and are twice as likely to have a household income of $75,000 or more.

Although advertising campaigns have increasingly featured Hispanics and Hispanic themes, marketers targeting Hispanic consumers must recognize substantial regional differences in the composition of the Hispanic population. For instance, Latinos living in  western and southwestern states tend to be of Mexican heritage, while Latinos in the Northeast have a much more varied country–of–origin background. With an estimated buying power of $616 billion, Latinos of Mexican heritage represent the single most influential segment of the Hispanic market. Mexicans in the U.S. account for 59% of all Hispanic buying power. On a per capita basis, however, Cubans are the most affluent of the major Hispanic population segments.

Latino Shoppers: Demographic Patterns and Spending Trends among Hispanic Americans, 8th Edition provides an in–depth look at the shopping habits and spending patterns of Hispanic consumers today. It also provides a glimpse into Latino shoppers of the future. As more acculturated Latinos become an ever–larger share of the population, marketers may need to address the potential for a significant change in the profile of the Latino consumer. This Packaged Facts report provides important insights into the way acculturation may affect the shopping behavior and buying decisions of Latinos in the years to come. For further information, please visit: http://www.packagedfacts.com/Latino-Shoppers-Demographic-2848314/.

About Packaged Facts—Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services. To learn more, visit: www.packagedfacts.com. Follow us on Facebook, LinkedIn and Twitter.

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