Following a turbulent year that took a toll on the financial health of many consumers, confidence is on the rise in 2021 amid economic growth and declining unemployment rates.
 
According to a Q2 IRI Consumer Connect survey, consumers reported a better financial state compared to Q1, and many are optimistic their finances will continue to improve over the next six months. The Consumer Sentiment Index is up seven points in July 2021 compared to July 2020.
 
While some experts still have concerns about inflation, IRI noted that the pet products category, including food, supplies and treats, has not been impacted. Pet products were among the top 10 selling consumer packaged goods categories in Q2, seeing an increase in dollar sales of more than 7% compared to 2020 and raking in nearly $40 million in sales throughout the past year.
 
Despite consumer optimism and the return to some pre-pandemic behaviors, results from the Q2 Consumer Connect survey revealed that other 2020 shopping trends are sticking around. More consumers reported they’re ordering groceries and pet products online, and 31% of online shoppers noted they visit fewer brick-and-mortar stores because more of their shopping is done online.
 
Adoption of online ordering is most notable among Generation Z and Millennial consumers, who prefer in-store pickup. Many pet owners anticipate different pet needs throughout the next year, with 19% of respondents planning to buy different treats for their pets and 18% anticipating the need for grooming services.
 
"With an uptick in e-commerce sales, there is an increased opportunity for CPG retailers and manufacturers to promote health, nutrition and pet products to pet parents,” said Joan Driggs, vice president of content and thought leadership, IRI. “IRI anticipates younger consumers will buy even more pet products in the coming year. Now is the time to build relationships with them and strengthen brand loyalty."
 
Purchase Drivers
Pet owners indulged their pets during Q2, with 32% of survey respondents reporting they purchased more treats for their pets than in Q1, and 17% reporting they bought more pet products like leashes, scratching posts, kennels or carriers, and mats. Gen Zers, Millennials and wealthy households purchased more pet products during the pandemic than other groups. Millennial and Gen Z consumers shopped for their pets across the most channels and preferred to shop at specialty stores and mass merchandisers more than other generations. Older consumers fulfilled their pet needs at grocery and convenience stores most often.
 
When shopping for pets, consumer purchase decisions are driven by health and nutrition first, followed by pet preference and price. More than half of consumers shopping for pet food consider health and nutritional standards before purchasing, while 46% consider their pets’ taste preferences and 42% shop for a good price.
 
Strong national brand loyalty is prominent among consumers of all income groups and generations. National brands outperformed private label brands by more than 3% in dollar sales growth throughout the past year. To level the playing field, private label brands are offering increasingly competitive prices, dropping the price per unit by nearly 6% over the past year.
 
As pet product sales continue to grow, retailers and manufacturers have the opportunity to connect with their target audience by meeting their pets’ needs, promoting the health and wellness benefits of products, and offering products at an affordable price.