Premium Food Brands Use E-Commerce to Surpass Legacy Competitors
Premium pet foods bearing descriptions such as “natural” and “grain free” are outpacing traditional consumer packaged goods (CPG) pet brands in digital visibility, but as pet owners continue to shift toward online retail channels, Amazon still proves a winner in organic searches for specific product attributes, according to a recently released report from digital benchmarking firm Gartner L2.
The report, Digital IQ Index: Pet Care U.S. 2018, examined the digital performance of 58 pet care brands operating in the U.S. across four dimensions: website and e-commerce, digital marketing, social media and mobile. The report also features case studies on brands including Amazon, Chewy, Petco, Purina, Wag, Fromm Family Pet Food, Canidae, Wellness and more.
“CPG organizations are racing to capture the growth of the pet care industry,” said Jake Matthews, director of CPG research at Gartner L2. “With consumer spend on pets across digital channels increasing dramatically, CPG firms are looking at fast-growing pet care brands with e-commerce prowess as acquisition targets to drive growth among slowing legacy businesses.”
The report found that while legacy brands respond to consumer demand with new product innovation and messaging, newer premium pet food brands dominate the digital shelf across e-commerce platforms. It cited Taste of the Wild’s distribution in Petco as well as Nutrish and Halo’s distribution in PetSmart as examples of premium brands that are rivaling established brands in online visibility. The report recognized that some premium pet food brands, such as Fromm Family Pet Food and Champion Petfoods, stayed true to their roots by cutting ties with Chewy following PetSmart’s acquisition of the company.
Pet food products with natural, grain-free and whole-ingredient product claims are growing faster than legacy household brand names, according to the report. Year-over-year, Google queries for unbranded terms across raw (e.g., “raw food diet for dogs”) and dietary (e.g., “high-protein dog food”) categories grew by 32 percent and 5 percent, respectively, while searches for loyalty programs and promotions, including branded coupons, have declined.
Product ingredient claims have also changed consumer behavior when it comes to brand email campaigns, the report found. When subject lines made explicit references to product ingredients such as “chicken,” “meat” or “vegetable,” brand email campaigns received higher open rates. Of the 13 largest and most active email programs among the brands examined in the report, open rates for campaigns with subject lines including ingredient terms experienced an average lift of 2.2 percent, compared to a 1.3 percent lift for promotions and a 0.8 percent decline when subject lines made generic references to health benefits.
The report cited independent, family-owned brand Canidae as the brand that drove one of the highest scores in the email marketing dimension, largely driven by its campaigns oriented around product ingredients.
“The brand’s emails that included references to individual ingredients in the subject line, including a campaign introducing its new grain-free puppy formulas, helped Canidae achieve above average open rates in comparison to the index,” wrote the report’s authors.
As online shoppers in the pet care category increasingly demand high-quality ingredients, brands are tuning up by providing transparent product information across their websites, said the report’s authors. Sixty-nine percent of brand sites examined for the report now offer video content and informational articles, and just over half include a first-time-owner section to win over new pet owners. In addition, almost half of the brands enable customers to filter through product assortments by main ingredient, and 40 percent provide filters for dietary needs.
The visibility of brand sites against unbranded terms in Google pales in comparison to retailers, the report found. The average brand examined for the report drives less than 3 percent organic visibility against unbranded terms, while the retailers measured in this year’s study (Amazon, Walmart, Chewy, Petco and PetSmart) maintain 27 percent visibility, on average. Despite losing to Chewy in rank within text ad results for branded terms, Amazon beats out all other retailers in organic search visibility. On average, the retail giant appears on the first page of search results for 38 percent of unbranded terms across the dog food, cat food, dog treat and cat treat categories.
The report also found that Amazon’s private label pet food brand, Wag, which was launched in early May, has yet to generate significant traction through organic search results. However, Wag drives viability through “sponsored products” on its parent platform, despite only appearing on the first page of organic searches for 4 percent of unbranded dog food terms, according to the report.
On the other hand, Chewy’s private label product, American Journey, “rivals leading brands like Wellness and Hill’s Pet Nutrition in search visibility on the platform,” wrote the report’s authors. American Journey products are returned on the first page of search results for 31 percent of unbranded dog food terms, tying Hill’s Pet Nutrition and falling slightly behind Wellness, which achieves 34 percent.