For many pet owners, Fido is a central part of the family. So much so that the American Pet Products Association (APPA) reports that U.S. pet owners spent $95.7 billion on pet products and services in 2019. And woof!, our four-legged friends are getting pampered by their “parents” like never before, and the pet supply industry is reaping the rewards.
Where do pet food sales rank in the overall figure? Pet food manufacturers and retailers are contributing to the largest-spending category, says APPA, with pet food and treats reaching $36.9 billion. That number should increase over the next several years as omnichannel e-commerce transforms pet food fulfillment and distribution. In fact, Pet Product News says estimates from Packaged Facts reveal pet food e-commerce sales in 2019 reached $8 billion or 22 percent of total pet food sales.
What trends that are taking shape with pet food distribution? Greater e-commerce demand with online orders and additional strategies of pet food manufacturers, retailers, and 3PLs.
Several trends are influencing pet food purchasing channels and fulfillment strategies. For example, sustainable practices that adhere to the ethical treatment of animals and “green” initiatives are taking center stage with consumers. Manufacturers who are implementing these strategies are seeing large e-commerce growth and are now rethinking pet food fulfillment.
Packaging is another such trend where manufacturers are redesigning package attributes for increased food security and freshness, while also accommodating reduced weight and production efficiencies.
Other dominant trends transforming the pet food industry for the long term include premium pet food and private label.
Brand and pet food preferences evolve. Pet parents want the best for their fur babies. This often means investing in premium cat and dog food—in both dry and wet varieties. Pet Food Processing states that the APPA’s pet ownership report indicates 43% of dog owners and 41% of cat owners buy premium pet foods. With brands once considered pet specialty exclusive now available in mass online and in-store channels, Packaged Facts says premiumization will remain a market growth segment, alongside refrigerated and fresh on-demand offerings.
However, gravitation toward private label brands remains a popular choice among pet owners. In its Survey of Pet Owners in 2020, Packaged Facts reveals “44% of pet owners agreed that store brands are as good quality as national name brands, with only 23% disagreeing. “As a result, contract manufacturers of private label brands, and the retailers that sell them, will likely benefit in the months and years ahead.”
The willingness to pay for quality pet food, whether it’s national or private label, comes down to ingredients. Just as humans express concerns about the quality of their food products, Steve King, CEO of the APPA, says the same due diligence exists about the ingredients that go into their pets’ food. “As the demand for natural, minimally processed ingredients continues, we expect a steady growth in this category.”
Packaged Facts reports that with the controversy of grain-free pet food and its potential link to canine dilated cardiomyopathy (DCM), grain-inclusive formulations for kibble and wet foods is now trending. “Of particular interest are ancient grains such as spelt, quinoa, sorghum, amaranth, millet, buckwheat, and chia. Also ripe for additional development, given the grain-free debacle, are recipes containing plant-based superfood ingredients such as kale, spinach, and blueberries that can stand in place of the more ‘undesirable’ grains such as wheat and corn.”
Omnichannel strategies deliver during COVID-19 and beyond. Over the course of the pandemic, Packaged Facts projects household pet ownership to increase 4% in 2020—primarily with millennials. Why is this significant to pet food omnichannel?
Millennials are well-versed in e-commerce and the holistic nature of omnichannel retailing. The coronavirus pandemic has led to wider e-commerce adoption by millennial and baby boomer pet owners. Rather than relying on in-store, brick-and-mortar shopping, pet parents are leveraging manufacturer and retailer omnichannel offerings for their pet food purchases for greater safety and convenience.
Pet food manufacturers, such as Purina, provide an online storefront and auto-delivery options for order fulfillment convenience, with direct links to online and in-store retail partners Amazon, Chewy, PetSmart, and others for a variety of seamless ordering and fulfillment options.
Big box pet supply and grocery retailers now include Instacart and DoorDash delivery of pet food, along with staple curbside pick-up; buy online, ship from store; and buy online, pick up in-store omnichannel fulfillment solutions.
Consumers are setting it and forgetting it as pet food subscription services are dominating e-commerce pet trends.
Pet food manufacturers and retailers cannot underestimate the benefits of e-commerce and omnichannel fulfillment. Renee Simovart, director and general manager at EPiQ Animal Health, writes, “The benefits of incorporating an omnichannel approach to your distribution model are undeniable, and putting this strategy into action doesn’t have to be daunting.
“In fact, it can all come down to the right master distributor. An effective, experienced partner can guide your team through this process and offer help by exclusively distributing to e-commerce channels, lessening the opportunity for diversion.”
Having an experienced partner in pet food fulfillment and distribution is where SSI SCHAEFER excels.
Whether you’re a manufacturer or a retailer, or outsourcing to a 3PL provider, a successful pet food fulfillment and distribution operation requires collaboration, but also semi-automated and automated solutions to meet growing order demand and customer expectations.
SSI SCHAEFER material handling solutions, coupled with its WAMAS warehouse management system, delivers efficiency, flexibility, and scalability as your pet food fulfillment and distribution operation expands and e-commerce evolves.
With a variety of pet food options from dry to wet to fresh, the SSI SCHAEFER racking and storage and retrieval solutions are ideal in any warehouse temperature zone, while accommodating the various sizes and weights of pet food packaging.
Let’s look at a few optimal SSI SCHAEFER material handling solutions to help achieve your pet food e-commerce strategies.
SSI Orbiter®. The SSI Orbiter is a semi-automated channel storage system that provides compact storage of large volumes with low item diversity. Channel access occurs with a channel vehicle for automated storage and retrieval, which eliminates the needs for aisles and maximizes storage.
Ideally, each channel is stocked with a single item. For this reason, using the SSI Orbiter for pet food e-commerce works well for order fulfillment by allocating each channel for a separate product line. Movement of the channel vehicle within each storage channel occurs using a wireless remote control for ease of operation.
Depending on the material flow of your pet food fulfillment and distribution system, the SSI Orbiter can adapt to a first in last out (FILO) or first in first out (FIFO) model. Expand your pet food warehouse operation further by pairing various solutions with the SSI Orbiter for enhanced product picking.
The overall benefits of the SSI Orbiter for pet food e-commerce fulfillment and distribution are many:
Various pet food pallet types can be accommodated
Mixed FIFO/FILO operation is possible within the warehouse
Maximum efficiency with use of channel vehicles for multiple storage channels
Individual, scalable, and modular pet food warehouse layouts possible
High-level space utilization to minimize costs
Pallet automation. Pet food e-commerce necessitates a pallet automation solution that’s robust and agile. Omnichannel pet food order fulfillment requires storage efficiencies to meet demand from various channels—retail, online sales, and direct to consumer.
Here are two pallet automation solutions to consider.
High Bay Warehouse for Pallets:
A high bay warehouse, where heights exceeding 65 feet or 20 meters is necessary, provides thousands of pallet spaces for a variety of pet food products.
With multi-deep storage capacity and pallet cranes for retrieval of pallets to conveying systems for shipment processing, pet food warehouse operators have the greatest flexibility over their intralogistics solutions.
Overall benefits of high bay warehouse solution for pet food fulfillment and distribution:
Diverse pet food product storage options for the various package sizes
Space utilization with optimum usage
Expandable and modified systems as your pet food e-commerce strategies evolve
An SRM solution for omnichannel fulfillment means rapid shuttle retrieval and transport of pet food pallets to picking stations for efficient shipment to customers.
With single-, double-, or multiple-deep storage options, adequate pet food pallet inventory is possible for omnichannel fulfillment. Seamless integration to conveying systems completes the automated storage and retrieval system for maximum efficiency.
Overall benefits of SRM solutions for pet food fulfillment and distribution:
Optimum pet food storage density
Flexible and scalable as your pet food storage warehouse evolves
Integrate an SRM with ERP systems or the SSI Schaefer WAMAS software for greater operating transparency and order fulfillment execution.
The future looks promising for pet food e-commerce with online pet food sales expected to increase over the next several years. And, pet food manufacturers and retailers should look to partners like SSI SCHAEFER for how to leverage intralogistics solutions to meet growing demand and customer expectations of pet parents.