The pet food industry has grown sales throughout the pandemic, with pet adoption and pet gifts on the rise as well, reported MarketWatch (Dec. 17).
Pet food helped boost sales at General Mills during its latest quarter. The segment was up 18% in the quarter to $460 million. Wet cat food, a $5 billion product segment in the U.S., and pet treats are opportunities for growth, according to CEO Jeff Harmening. Next month, the company is launching a new wet cat food product called Tastefuls under its Blue brand.
“[T]he premiumization of pet food and the humanization of pet food is a trend we see coming,” said Harmening during an analyst call, according to a FactSet transcript. “And we know that pet parents of cats, they want to feed their cats something wholesome and natural, but they also need to taste good because, frankly, cats are picky eaters.”
Pet subscription programs also saw the largest year-over-year growth during the Black Friday and Cyber Monday shopping period, up 776.7%, according to commerce software platform Ordergroove. One of the better-known subscription services, BarkBox Inc. is merging with a blank-check company in a $1.6 billion deal, including debt, according to people familiar with the matter, reported The Wall Street Journal (Dec. 16)
The company, which was founded in 2012, is a dog-focused supply company which sells food, toys, treats, accessories, and dental products through monthly subscription boxes, as well as an e-commerce site. Currently, the BarkBox service has over a million active monthly subscribers.
The funding will be used to expand the company overseas and boost new and existing product lines. It is expected that revenue will reach $365 million for the fiscal year ending March 31.
Meanwhile, pet food supplier Chewy reported better-than-expected results in its third fiscal quarter, reported CNBC (Dec. 8). Chewy reported a 45% growth in revenue in the quarter ended Nov. 1—the third consecutive three-month period of a nearly 50% increase in business during 2020.
The company recorded $1.78 billion of sales and 8 cents of losses per share in the quarter. The results topped Refinitiv estimates of $1.72 billion on the top line and a 14-cent loss per share on the bottom line. The 45% surge is almost double the 24.5% growth it reported in its final quarter of its 2019 fiscal year.
Interestingly, Chewy CEO Sumit Singh attributed the success to emerging trends in the pet retail industry, and less so to the pandemic shifting pet owner shopping habits.
“Regardless of whether we were in a pandemic or not, the secular shift that we were enjoying and executing behind was all driven by the value proposition that we bring to the space,” he said. “We don’t really believe the growth that we’re delivering right now is pandemic driven.”
Chewy currently serves around 18 million customers and Singh expects to see even more growth as the company seeks to take more share in the $100 billion pet supplies market.