It's a Dog Eat Dog Biz: HOW DIRECT-TO-CONSUMER COMPANIES ARE PUTTING A NEW SPIN ON THE PET FOOD INDUSTRY

By Alcantara, Ann-Marie | ADWEEK, April 29, 2019 | Go to article overview

It's a Dog Eat Dog Biz: HOW DIRECT-TO-CONSUMER COMPANIES ARE PUTTING A NEW SPIN ON THE PET FOOD INDUSTRY


Alcantara, Ann-Marie, ADWEEK


Personal Instagram accounts, leather leashes and gourmet food. Dog influencers (yes, it's a thing) lead very good lives. In the age of instant celebrity and dopamine-fueled likes and faves, dog owners are pushing a $72 billion industry.

According to the American Pet Products Association, U.S. pet owners spent about $72.56 billion on their pets in 2018, an 8.7% increase from $66.75 billion in 2016, and 68% of all U.S. households own a pet. Pet owners like to spoil their "children," too. Food and treats account for 38% of all sales in the pet industry, with nonmedical services at 11% and veterinary services at 32%, per Packaged Facts, a consumer research company. With this type of growth, it's no surprise that a 2018 Crunch-base report found that funding for pet startups increased by 334% from $67.2 million in 2012 to $291.8 million in 2017.

As the industry explodes, marketers are leaning into every demo, from young pups to old dogs and capitalizing on the recent trend of pet humanization. For example, PetPlate, which was founded in 2016, offers human-grade dog food, while dog lifestyle company Bark has the subscription sensation, BarkBox.

Meanwhile, incumbent giant Petco is finding new ways to lure customers to its stores.

"We're seeing brands paying attention to design and making things that consumers themselves would want to wear if they were a pet," said Penn Whaling, senior strategist at PSFK, a retail research company. "It's moving beyond just the basic offerings that you would find [at] these larger pet care retailers."

Though more than half of millennials own a dog, according to research from TD Ameritrade, it's not just urban, coastal millennials who are buying into these DTC brands. PetPlate, for example, which has shipped more than 3 million meals across the country since 2017, counts California, New York, Texas, Florida, New Jersey, Illinois and Georgia as its top revenue generating states.

Of course, the success and diversity of these DTC brands comes on the back of digital advertising on Facebook and Instagram.

Jonathan Regev, co-founder and CEO of Farmer's Dog, said existing as a DTC company means the firm doesn't compromise its food quality, like it would in a traditional retail setting or pre-social media. Social platforms also give DTC brands a chance to tap into self-forming communities of dog owners and pet lovers.

However, unlike other categories such as fashion or home, consumers don't necessarily have an ingrained behavior to buy dogs anything other than regular kibble and try something customized, said Renaldo Webb, founder of PetPlate. …

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