Natural products on the rise

For the past decade, premiumisation has been driving much of the growth in the pet market. This trend remains strong and has emerged as an essential aspect of the natural pet products segment, according to Natural, Organic, and Eco-Friendly Pet Products in the U.S., 5th edition, a recent report by the market research publisher Packaged Facts. Over $7 bn in 2014 The report estimates that US retail sales of natural pet products are on track to exceed $7 bn in 2014, reflecting a 2010-2014 compound annual growth rate (CAGR) of 15 per cent. Natural pet food will account for the vast majority of sales and is expected to reach $6.6 bn by the end of the year, with natural pet care products comprising the remainder.
"It's no wonder pet product makers and retailers are drawn to the super-premium edge of the business," comments Packaged Facts' research director David Sprinkle. "In the pet food arena, margins on super-premium foods can reach 40 per cent, compared with 30 per cent for premium brands and 20 per cent or less for standard brands." According to Sprinkle, this "premiumisation pressure" is a potent driver towards increased sales of natural and organic products, since in the pet market, "premium" -and especially "super-premium" - increasingly means "natural." Although not all super-premium products are natural, more and more of them are, with natural products at the core of the premiumisation trend, especially with regard to pet food. The flip side of this trend is that offering a natural product is no longer enough to attract consumer attention. Marketers must find additional product features to entice purchasers and justify the heightened price tag.

Focus on pet health To meet consumer demand and justify the higher prices of premium products, virtually all pet product marketers are focusing more closely on pet health. According to Sprinkle, this is good news for natural and organic products, since many consumers increasingly view natural and organic products as being healthier. Pet owners are willing to spend more if they believe that the products offer health and wellness benefits. According to Packaged Facts' April/May 2014 survey results, 64 per cent of pet owners believe that high-quality pet foods are effective for preventive health care…