In this edition PLMALive! Christopher Durham looks at the country’s leading pet retailers and the role of private brand in the channel.
Sit. Stay. Buy.
Well over half of the households in the United States own a pet – almost 80 million homes. All those pets need to be cared for – and with over 300 million pets in the US, that makes for a booming private brand business.
The bond between American shoppers and their pets continues to drive growth in the channel. That bond has created a shift that has created the trendy new term “pet parent.” Most pet owners characterize their pets as family members and do not hesitate to spend money on them. In market research from Packaged Facts’ National Pet Owner Survey, 79% of dog owners and 77% of cat owners consider their pets a member of the family.
Specialty retailers PetSmart and Petco account for more than 20% of all pet product sales in the US, according to Packaged Facts. The two companies had combined sales of more than $14 billion with private brand exceeding 20% penetration in most categories.
Over the last two years, both retailers have radically evolved their private brand portfolios to respond to their pet parents’ needs.
Petco shifted from a traditional three tier grocery strategy, to a customer focused, expertise-driven strategy that is brought to life with great products and great design. In 2016, Petco launched two new brands that exemplify that strategy.
First, Petco introduced a private brand of dog and cat food and treats featuring natural ingredients and healthy nutrients. The new line was called “Drs. Foster and Smith,” and came about as a result of Petco’s acquisition, two years prior, of the online and catalog retailer of the same name. Drs. Foster and Smith had been providing quality at-home pet healthcare and everyday essentials for more than 30 years before Petco snapped it up.
With the acquisition, Petco leveraged the new brand as an exclusive line that includes solution-based and wellness formulas. The Drs. Foster and Smith recipes follow the current “free from” trend and are free of artificial colors or flavors, grain free, and include Omega-3s.
Whole Hearted, a new private brand of natural dog food featuring thoughtfully crafted recipes with quality ingredients and healthy nutrients, was developed in-house by Petco nutrition and product innovation experts and features wholesome ingredients.
Petsmart’s portfolio takes a completely different approach with a robust collection of traditional private brands. A selection of licenses including the newest ED, the Ellen DeGeneres Collection and exclusive partnerships with other retailer’s brands including GNC Pet in wellness and Toys R Us Pet.
Simply Nourish, their premier pet food private brand is formulated with wholesome, real ingredients found in nature from high-quality sources with the nutrients still intact and free of artificial colors, flavors, and preservatives.
Their portfolio is rounded out by a collection of other price-tiered and category focused private labels including Authority, Top Paw, Grreat Choice, All Living Things and several others
Petsmart and Petco have increasingly leveraged their private brand portfolios to build meaningful differentiation. They know strong private brands can not only create customer loyalty, but also help them win the battle for hearts and wallets.