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Once a niche catering to a tiny minority of affluent and indulgent owners, pet bakeries are expanding rapidly in the US. This could represent an opportunity for grocery retailers with in-store bakeries.
Orlando, Florida-based Woof Gang Bakery, which combines a pet bakery with a pet shop that sells high-end pet food and pet care products and a grooming salon, is expanding rapidly: As of the beginning of April 2015, it had 26 franchised stores in Florida and more than 60 nationwide from Texas to New Jersey. According to CEO Paul Allen, the company aims to increase the latter figure to 75 by the end of 2015. It is also planning to open corporate-owned stores, with five locations planned by summer 2015.
Apart from offering a range of premium organic, holistic, gluten-free and raw dog and cat food and pet care products, the company’s USP is its artisanal baked products, which range from dog biscuits to cakes. It also markets packaged treats under Woof Gang Bakery brand name. On the consumer review website Yelp.com, one patron in Austin, Texas, commented: “This is where I come every year to get my dog his birthday ‘cake’. And every year he loves it! I absolutely recommend Woof Gang Bakery for healthy and unique dog treats.” Another added: “I ordered a cake [a grain-free, bone-shaped cake made with apples, banana and carrot] for my dog’s birthday. It was amazing, super cute, and tasty (we tried some too!)” “I like that they offer gluten-free and healthy treat options”, a third said.
Dog treats and cat treats have been by far the best-performing categories of the US pet care market over recent years. Between 2009 and 2014, real value sales of dog treats expanded by 23%, to US$2.8 billion, while real value sales of cat treats rose by 44%, to US$594 million. Over the same period, real value sales in the wider US pet food market grew by a mere 1%.
It seems that many US owners cannot help buying their cats and particularly their dogs treats: A survey conducted by Revelation Research during March 2015 found that one third of owners visited drive-through quick-service restaurants (QSR) with their dog, with 80% of this group ordering something specifically for their pet. “QSR and dog food/treat manufacturers should team up to design dog-safe offerings,” Nan Martin of Revelation Research advised.
Similar opportunities exists for grocery retailers; they could attract owners to the baked goods aisle with artisanal pet treats, while larger players could even team up with pet food manufacturers to market branded artisanal treats. By emphasising the naturalness and freshness of their offerings, such a strategy would also play to heightened consumer concern regarding the quality of ingredients in some packaged treats. The gap between ‘human’ food and pet food continues to narrow as a growing number of pet food manufacturers market their products as ‘human grade,’ so it is hardly surprising that the same trend is beginning to emerge in pet treats.