Pet Food and Supplies - US - August 2008

TABLE OF CONTENTS

• Scope and Themes
• What you need to know
• Definition
• Data sources and methodology
• Sales data
• Consumer survey data
• Abbreviations
• Terms
• Executive Summary
• Market size
• Leading brands
• Value-added products are key
• Consumers are more aware
• Alternative pet food and the economy as competing forces
• Key consumer findings
• Topline
• Women and children
• Young adults
• Hispanic highlights
• Market Size and Forecast
• Key points
• Regaining consumer trust...
• ...through wholesome, healthful products
  • Figure 1: Total U.S. sales and forecast of pet food and supplies, at current prices, 2003-13
  • Figure 2: Total U.S. sales and forecast of pet food and supplies, at inflation-adjusted prices, 2003-13
• Wal-Mart sales
• Competitive Context
• Pet food alternatives
  • Figure 3: Post-recall changes in pet food purchases, June 2008
• Weak economy creates competition for dollar spend
• Segment Performance
• Key points
• Pet food becoming increasingly humanized
• Pet supply trends also closely follow the human world
  • Figure 4: U.S. sales and forecast of pet food and supplies, at current prices, by segment, 2003-13
  • Figure 5: U.S. sales of pet food and products, by segment, 2006 and 2008
• Segment Performance--Dog Food
• Key points
• Post-recall markets yearns for "better for your dog" food
• Focusing on dry food and treats
• Sales and forecast
  • Figure 6: U.S. sales and forecast of dog food, at current prices, 2003-13
• Segment Performance--Pet Supplies
• Key points
• Growth comes from trends that largely mirror human markets
• Sales and forecast
  • Figure 7: U.S. sales and forecast of pet supplies, at current prices, 2003-13
• Segment Performance--Cat Food
• Key points
• Cat food as a treat
• Sales and forecast
  • Figure 8: U.S. sales and forecast of cat food, at current prices, 2003-13
• Segment Performance--Other Pet Food (non-dog/cat)
• Key point
• "Other" pet food sales remain steady
• Sales and forecast
  • Figure 9: U.S. sales and forecast of other pet food (non-dog/cat), at current prices, 2003-13
• Retail Channels
• Key points
• Mass and other dominate sales
  • Figure 10: U.S. sales of pet food and supplies, by retail channel, 2006 and 2008
  • Figure 11: Retailers shopped at for pet supplies, January-November 2007
• Retail Channels--Food Stores
• Key points
• Continued threat from alternate channels
• Food store sales
  • Figure 12: U.S. sales of pet food and supplies through food stores, 2003-08
• Retail Channels--Pharmacies and Drug Stores
• Key point
• A focus on specialty products has helped the channel realize growth
• Drug store sales
  • Figure 13: U.S. sales of pet food and supplies at drug stores, 2003-08
• Retail Channels--Mass Merchandisers and Others
• Key points
• Perceived value and healthier option drive consumers to seek out retail alternatives
• Mass merchandiser and other store sales
  • Figure 14: U.S. sales of pet food and supplies at mass merchandisers and others, 2003-08
• Retail Channels--Natural
  • Figure 15: Natural product supermarket retail sales of pet food and supplies, at current prices, 2006-08
• Natural channel sales by segment
  • Figure 16: Natural product supermarket retail sales of pet food and supplies, by segment, 2006 and 2008
  • Figure 17: Natural product supermarket retail sales of dog food, at current prices, 2006-08
  • Figure 18: Natural product supermarket retail sales of cat food, at current prices, 2006-08
  • F1igure 19: Natural product supermarket retail sales of pet treats, at current prices, 2006-08
• Market Drivers
• Pet ownership
  • Figure 20: Pet population in the U.S., 2003-07
  • Figure 21: Types of pets owned, 2007 and 2008
• Economic woes cause consumers to cut back
• Women and children first
  • Figure 22: Purchasers of pet food, by gender, June 2008
  • Figure 23: Types of pets owned, and how many, by presence of children, June 2008
• The post-recall cautious consumers
• Co-branding and licensed products
• Leading Companies
• Key points
• Indulgent and natural products drive growth
  • Figure 24: FDMx sales of leading pet food and supply companies, 2007 and 2008
• Selected Brand Analysis--Dog Food
• Key points
• Specialized, natural and indulgent products coax consumers post-recall
  • Figure 25: Selected FDMx brand sales of dog food in the U.S., 2007 and 2008
• The dog food shopper
• Dry dog food
  • Figure 26: Brands of packaged or dry dog food used in household, January-November 2007
• Canned dog food
  • Figure 27: Formats of dog food used in household, January-November 2007
  • Figure 28: Brands of canned dog food used in household, January-November 2007
• Moist packaged dog food
  • Figure 29: Brands of packaged moist dog food used in household, January-November 2007
• Dog biscuits/treats
  • Figure 30: Brands of dog biscuits/treats used in household, January-November 2007
• Selected Brand Analysis--Cat Food
• Key points
• Growth leaders are natural and indulgent
  • Figure 31: Selected FDMx brand sales of cat food in the U.S., 2007 and 2008
• Dry cat food
  • Figure 32: Types of dry cat food used in household, January-November 2007
  • Figure 33: Brands of packaged dry cat food used in household, January-November 2007
• Canned cat food
  • Figure 34: Types of canned cat food used in household, January-November 2007
  • Figure 35: Brands of canned cat food used in household, January-November 2007
• Packaged moist cat food
  • Figure 36: Brands of moist cat food used in household, January-November 2007
• Cat treats/snacks
  • Figure 37: Brands of cat treats/snacks used in household, January-November 2007
• Selected Brand Analysis--Pet Supplies
• Key points
• Sales stagnant, but opportunity looms in supplements
  • Figure 38: Selected FDMx brand sales of pet supplies in the U.S., 2007 and 2008
• Cat box filler or litter
  • Figure 39: Types of cat litter used in household, January-November 2007
  • Figure 40: Brands of cat litter used in household, January-November 2007
  • Flea and tick products, pet food supplements/vitamins and heartworm control products
  • Figure 41: Trended use of flea and tick products, pet food supplements and vitamins and heartworm control, 2003-07
  • Figure 42: Types of flea/tick care products used in household, January-November 2007
  • Figure 43: Brands of flea/tick care products used in household, January-November 2007
• Selected Brand Analysis--Pet Food (non-dog/cat)
• Key points
• Primary suppliers losing ground
  • Figure 44: Selected FDMx brand sales of pet food (non-dog/cat) in the U.S., 2007 and 2008
• Selected Brand Analysis--Pet Food and Supplies Natural Channel
• Brand table: pet food and supplies
  • Figure 45: Selected natural channel store manufacturer and brand sales of pet food and supplies in the U.S., 2006 and 2008
• Natural channel sales of combined dog food, cat food and pet treats by organic
  • Figure 46: Natural product supermarket retail sales of combined dog food, cat food and pet treats, organic vs non-organic, 2006-08
• Brand Qualities
• Pedigree
• Iams
• The Goodlife Recipe
• Innovation and Innovators
  • Figure 47: Top claims for pet food new product introductions, 2006/07 and 2007/08
  • Figure 48: Top claims for pet supply new product introductions, 2006/07 and 2007/08
• Organic and natural
• Eco-friendly
• Vitamins/supplements
• Added value
• Anthropomorphic
• Portion control
• Ancestral diet
• Advertising and Promotion
• Overview
• Campaign spotlight--Pedigree "dogs rule" in conjunction with the adoption drive effort
  • Figure 49: Pedigree Adoption Drive television ad, 2007
• Protecting pets' health
  • Figure 50: Advantage television ad, 2007
  • Figure 51: Iams digestive care for cats television ad, 2007
  • Figure 52: Iams healthy naturals television ad, 2007
• Wholesome ingredients
  • Figure 53: Meow Mix Wholesome goodness television ad, 2007
  • Figure 54: The Goodlife Recipe for cats television ad, 2007
• Humanizing pets
  • Figure 55: Heartgard television ad, 2007
  • Figure 56: Alpo dog food television ad, 2007
• Pets as companions
  • Figure 57: Cesar television ad, 2007
  • Figure 58: Home again television ad, 2007
  • Figure 59: Iams proactive health television ad, 2007
• Convenience
  • Figure 61: Arm & Hammer television ad, 2007
• Pet Ownership
  • Figure 62: Cat and dog ownership, by age, race/Hispanic origin, household income and presence of children, January-November 2007
  • Figure 63: Types and numbers of pets owned, by age, June 2008
  • Figure 64: Types and numbers of pets owned, by household income, June 2008
• Use of and Interest in Products or Services
  • Figure 65: Use of and interest in selected pet products or services, by age, June 2008
• Perception of Organic Pet Food
  • Figure 66: Perception of organic pet food, by gender, June 2008
  • Figure 67: Perception of organic pet food, by age, June 2008
• Impact of Pet Food Recall and Lead Poisoning
• Pet food recall
  • Figure 68: Awareness of 2007 pet food recall, by age, June 2008
  • Figure 69: Changes in pet food purchases following 2007 pet food recall, by age, June 2008
  • Figure 70: Changes in pet food purchases following 2007 pet food recall, by presence of children, June 2008
  • Figure 71: Post-recall changes in pet food purchases, by age, June 2008
• Lead poisoning
  • Figure 72: Awareness of lead content discovery in some pet toys, June 2008
  • Figure 73: Decision to throw away/not buy new toys because of this high lead content discovery, by age, June 2008
• Race/Ethnicity
• Key points
• Pet ownership
  • Figure 74: Types and numbers of pets owned, by race/Hispanic origin, June 2008
  • Figure 75: Use of and interest in products or services, by race/Hispanic origin, June 2008
• Perception of organic pet food
  • Figure 76: Perception of organic pet food, by race/Hispanic origin, June 2008
• Reaction to pet food recall
  • Figure 77: Post-recall changes in pet food purchases, by race/Hispanic origin, June 2008
• Awareness and Reaction to Lead Discovery in Pet Toys
  • Figure 78: Decision to throw away/not buy new toys based, by race/Hispanic origin, June 2008
• Household Purchase Patterns
• Consumer insights--pet food
• Dry dog food
• Brand leaders by penetration
• Wet dog food
• Brand leaders by penetration
  • Figure 95: Key purchase measures for the top dry and wet dog food brands, by household penetration, *2007
• Dry cat food
• Brand leaders by penetration
• Wet cat food
• Brand leaders by penetration
  • Figure 96: Key purchase measures for the top dry and wet cat food brands, by household penetration, *2007
• Appendix: Other Useful Consumer Tables
• Impact of pet food recall and lead poisoning
  • Figure 97: Changes in pet food purchases following 2007 pet food recall, by household income, June 2008
• Awareness and reaction to lead discovery in pet toys
  • Figure 98: Awareness of lead content discovery in some pet toys, by race/Hispanic origin, June 2008
• Appendix: Trade Associations