"The humanization of pet food" entices the makers of Cheerios and Snickers
Pet food is looking pretty tasty to human food companies.
Why it matters: Facing pressure to diversify their businesses as consumers gravitate toward products viewed as healthier, packaged food companies are eager to find new markets.
Driving the news: Human food companies like General Mills, known for making Cheerios cereal and Yoplait yogurt, and Mars, known for making M&Ms and Snickers candy, are among the food giants charting a growth path in pet food.
- General Mills reported a 37% sales increase in its pet segment in its last quarter, far outpacing its overall 8% organic net sales growth.
- When Mars CEO Grant Reid announced last month that he would retire, the company appointed a new CEO from its Mars Petcare division, Poul Weihrauch, signaling the importance of the pet side for the candy company founded in 1911.
State of play: With the economy potentially veering toward a recession, pet sales can play an important role in propping up companies that might otherwise be vulnerable to a pullback in consumer spending.
- U.S. pet owners spent $50 billion on pet food and treats in 2021, up 13.6% for the year, according to the American Pet Products Association.
- “It’s a pretty recession-resilient category,” CFRA Research analyst Arun Sundaram tells Axios. “Even when times are tough for the consumer, the consumer is probably going to trade down for themselves first before they start trading down for their pet.”
- “Not only do shoppers tend to shop petcare for considerably longer than other categories such as infant care, they also show a far greater propensity to trade up and try new things,” Mars Petcare marketing executive Zoe Taphouse, said last year in a statement.
Zoom in: Human food companies are specializing in premium pet food, aiming to fetch a premium profit.
- General Mills’ $8 billion acquisition of Blue Buffalo in 2018 served as a springboard for the self-declared “wholesome natural” brand.
- Privately held Mars bragged last year that its “luxury cat food” brand, Sheba, had enjoyed strong sales growth.
💭 Our thought bubble: In the spirit of anthropomorphism, the gap between human food and pet food is shrinking.
- General Mills CEO Jeffrey Harmening recently called it “the humanization of pet food.”
The bottom line: People prioritize their pets. Human food companies are getting the message.