Analyst Insight by Maryna Ivus - In-Country Analyst, Canada
As the Canadian pet food marketplace faces the prospect of slowing volume growth in the coming years, manufacturers and retailers are continuing to seek opportunities in the premium dog and cat food segment. Premium pet food products are sought after by many Canadian pet owners, especially those with higher disposable incomes, thus enabling this otherwise mature industry to achieve value growth.
Within premium pet food, sales of fresh and frozen products remain relatively low. However, consumer interest in these products, driven by the perception of high-quality fresh ingredients, has been on the rise. Consumers are treating their pets as members of the family, and this trend is driving a preference for more natural products and better ingredients. Many pet owners feel more comfortable with familiar ingredients, ie ingredients which are similar to those they eat themselves.
Traditionally, fresh/frozen products have been sold mainly in specialist pet stores. However, banking on a consumer shift towards mass-market channels in search of high-quality products at a better price, Freshpet began marketing its line of fresh/frozen dog and cat food through leading grocery and mass chains in Canada, including Wal-Mart and Loblaws operated stores and other grocery retailers. The move, while not without its risks to brand equity, is supporting the brand’s expansion and is attracting more consumer attention, with retailers so far reporting good sales.