8 min read - By Ludovic Depoortere, Founder Haystack Consulting
The modern pet owner is throwing the pet food industry into crisis.
They’re racing from one product to the next as new, innovative pet food types are released. Brand loyalty is breaking down, the market is fragmenting quickly, and quick-moving startups are carving out niche audiences daily. For pet owners, it’s a golden age of new opportunities
For legacy pet food brands, however, this evolving reality brings substantial challenges.
Mars Belgium dropped from 29.2% to 28.1% of the country’s market share from 2014 to 2018. Nestlé Purina saw a similar drop, from 17% to 15.9%. In fact, six of the top ten Belgian pet food brands are experiencing a decline in brand equity.
At Haystack Consulting, we’ve witnessed it over and over again.
Brands that once dominated pet food categories find themselves losing ground to risk-taking newcomers, unsure of how to remain attractive and relevant to the modern consumer. They always feel one step behind, limited by a slow NPD cycle and a lack of agility to launch on-trend products quickly.
We’ve also seen how these same heavy-hitting brands can step back into the driver’s seat, harness consumer-focused product development, and reclaim brand equity quickly.
And I’ll share how you can do it, too.
We’ll discuss…
- How new pet food brands are out-developing larger brands
- Trends that are driving consumer segmentation and purchasing behavior
- A 2-month blueprint for NPD that brands are using to reclaim brand equity
To begin, a brief analysis on how new pet food brands are growing so quickly.
1| Niche Pet Food Brands Provide More Value Than Just Food
Millennial pet owners are redefining what it means to care for pets. The shifting language from being a “pet owner” to a “pet parent” clearly signals the new mindset: pets are now perceived more like children.
Many have explained this as the natural consequence of delayed child-rearing or a response to over-exposure to cold technology, but whatever the reason, these young pet owners demand more from their pet food.
As any parent would for their child, young pet owners are taking an active role in pursuing foods that align with the family values. This may include…
- Minimal processing. Fresh and raw dog foods are expected to reach a CAGR of over 24% between 2019 and 2023 in the US. Purees, broths, baked goods, and cold-pressed foods are also experiencing growth, coinciding with the increased attention on fresh and minimally processed human foods globally.
- Highly-personalized diets. Personalized nutrition is impacting the pet food industry and gaining steam, as made evident by Nestlé Purina PetCare’s investment in UK-based Tails.com, a company that offers personalized dog foods. Organic, grain-free, plant-based—if it exists for humans, it’s coming for pet food.
- Functional foods. Pet foods designed to encourage specific wellness outcomes—such as weight loss or joint strengthening—are increasingly in demand. Euromonitor estimates a 3.3% CAGR between 2019 and 2024 for pet supplements—fueled by the growing food/supplement hybrid category—and a Packaged Facts study found that 72% of dog owners and 67% of cat owners agreed to the statement, “High-quality dog foods/cat foods are effective in preventative healthcare.”
- Human-grade foods. Many pet owners see a disconnect between their affection for their pet and a willingness to feed pet food that they themselves wouldn’t eat. These consumers are driving demand for humanized foods, including pet-human hybrid foods can even be safely eaten by the owner.
- Luxury food experiences. Beer for dogs, wine for cats, and other novel pet food experiences are popping up around the world.
- Transparency and sustainability. Consumers are growing more attuned to the environmental footprint of their pet food, and many are captivated by increased ingredient traceability and sustainable protein (such as insects). 30% of US pet owners say they try to avoid pet foods with excess packaging.
The ‘what’ consumers want is no secret: healthier, more sustainable, functional food for their pets. But as we’ve seen time and time again, creating a ‘what’ is no guarantee of success.
To develop meaningful products that consumers will connect with on a deeper level, pet food brands must access the ‘why’ that drives these evolving purchasing behaviors.
And to capture that ‘why’ quickly, they’ll need to employ some new strategies.
2| Traditional NPD Methods Aren’t Optimized For Speed
Standard consumer science strategies—while they still serve important functions—have struggled for years to keep up with the nimble, direct-to-consumer startup when it comes to creating relevant, on-trend products.
It takes legacy brands months or years to conduct deep-dive studies across markets, tempting many to fast-track research and launch poorly-developed products that don’t speak to consumers.
Meanwhile, younger brands, quick to listen and able to pivot at a moment’s notice, can develop new, targeted products in a matter of weeks.
Even if you develop a product consumers love using older methods, you’ll inevitably launch months or years after the trends—and your competitors—become established.
Some legacy manufacturers have instead turned to big data as a means of predicting the direction of the market. And while analyzing trends at scale can be helpful, over-reliance on data creates its own problems.
In one study, 73% of organizations reported it still takes weeks or longer to capture and interpret behavioral data insights from sources. A similar Deloitte study concluded that legacy organizations with established corporate cultures are the least likely to use big data effectively—another struggle major pet food brands are likely to face.
Big data is an important element of any researcher’s toolbox, but when not validated and enhanced with genuine human interaction, it’s prone to misunderstand the sub-surface, complex motivations that drive consumer behavior and lead brands astray.
The famous flop, Pets.com, is a perfect example of this. Millions of dollars were poured into building an online pet store because the data claimed online shopping was the future. And it would be—but in 1998, pet owners weren’t yet ready to start ordering all their pet food online. If the founders had spoken to consumers and discovered their deeper needs, they would have realized that the buying behavior hadn’t evolved yet. The business shut down in 2000.
Successful product development—the kind that generates loyal customers who feel understood and tailored to—targets the emotional triggers of consumers—the ‘why’—not merely trend data.
It almost seems like big pet food brands can’t win. They have to (1) slow down to discover the deep emotional triggers of customers and (2) develop the right product faster than ever.
Thankfully, these two achievements are not mutually exclusive.
Here’s a blueprint for how any legacy pet food manufacturer can refresh their NPD cycle to create more targeted products at startup-speed.
3| A Blueprint For A Two-Month, ‘Why’-Driven NPD Cycle
Let’s say you want to develop a new functional beverage with sustainable ingredients. You’d ask questions, like…
- What functional benefits are gaining popularity over the next ten years?
- Is there whitespace in the market we can fill?
- What sustainable ingredients do customers perceive as healthy?
- How can we pair functional benefits and sustainable ingredients in a balanced way?
- How do we position our product for max sustainable impact?
And most importantly…
- Will this product hit the emotional triggers of our target customers?
Gathering the standard market data is one step, but getting deep insight into consumer emotional triggers—the ‘why’ people will buy your new product—is the far more powerful and challenging step. And it’s essential for out-developing competitor startups.
We call the blueprint that gets you there Crowd Connect.
Crowd Connect is a consumer engagement platform that takes heavy-hitting brands from no idea to complete marketing mix in 60 days.
Your team and our experts at Haystack Consulting work together to ask consumers highly-specific questions about product experiences, packaging, ingredients, positioning, purchase behaviors, and beyond every single day.
The human footprint is front and center. Unsurprisingly, when consumers are invited to contribute to the development of products that are meaningful to them, they are happy to offer their deepest thoughts and feelings—those elusive emotional triggers.
“The main thing I’ll remember is that my thoughts and voice have been taken into account, and that is precious. In my opinion, every brand should listen to customers in order to launch an even better product. I’m really grateful for being part of this. Thank you so much.”
Rather than resulting in a single report, the regular interaction enables you to draw insights and pivot the direction of the questions each day as we explore your customers’ sub-surface motivations, hidden concerns, and buying behaviors. It’s a very involved and active process, but the results are robust.
Over a two-month period, we’re able to uncover actionable insights into ‘what’ product to create, ‘how’ to position it in the market to meet consumer needs, and ‘why’ consumers will find it compelling.
It’s the quickest way to immerse your team in your customer’s world, then fill your NPD pipeline with meaningful products your audience will love.
We go into detail in our Crowd Connect Case Study. Read it and discover…
- Why our unique customer-driven process enables more insightful research
- How Crowd Connect helps you turn research into meaningful products/services quickly
- Next-steps for reclaiming brand equity with products/services consumers will love
Ready to stop losing ground to agile competitors?
💬 Should you have any questions, please don't hesitate to reach out. I would be more than happy to hear from you - ludovic.depoortere@haystack-consulting.com
