Diagnosing Consumer Switching Dynamics in Pet Food

During 2023, widespread concern arose about — and some early data came to light regarding — indications that trading down was occurring in the pet food category. If so, it would mark the reversal of a yearslong trend. How extensive was this apparent shift, and what are the implications for pet food brands? To find out, L.E.K. Consulting surveyed 1,600 dog and cat owners. Here’s what we discovered. 

Consumer profiles

Based on our survey, roughly 1 in 3 pet owners tried a different pet food brand in 2023. One in 7 (15% of all pet owners) traded down, achieving an average discount of about 9%. Meanwhile, closer to 1 in 8 (13%) traded up at an average premium of roughly 7% (see Figure 1).

Pet owners who switched brands were, on average, younger than other pet owners. Those trading down were six years younger than average, and those trading up to more premium brands were two years younger. Brand-switchers were also newer to pet ownership, suggesting that switching is more common in the first few years of pet ownership.

A key difference between those who traded up and everyone else was income. The average annual household income of pet owners trading up was nearly $15,000 higher than those trading down and $12,000 higher than the average pet owner (see Figure 2).

Motivations for changing brands

Unsurprisingly, cost was the primary motivation for trading down. About 40% of respondents trading down said they did so because they found a lower-priced option or better promotions and discounts (see Figure 3). 

Among consumers who traded down, about 62% were already considering returning to their original brand or price point. Only 1 in 4 said they wouldn’t consider switching back if the economy improved (see Figure 4).

A desire to return to superior ingredient quality and proven health benefits were the largest drivers for those who traded down but were considering switching back, emphasizing the need to provide differentiation to win new and lapsed consumers alike.

For their part, pet owners who traded up cited a variety of reasons for spending more, such as higher-quality ingredients (25%) and specific nutritional needs (16%). Veterinarian recommendation was another common reason, mentioned by 12% of dog owners and 11% of cat owners (see Figure 5). Pet food brands with clear niches are the relative winners in this segment of consumers.

Implications for pet food brands

Our research shows that trading down did occur in 2023 in a meaningful way, but trading up continued to occur in nearly equal measure. Although cost was a primary driver of trading down, many who did trade down are likely to come back or trade up in the future. That implies this may have been a temporary trend in response to record-high inflation and broader pressures on disposable income.  

Considering these dynamics, as well as the crowded nature of many companies voicing the same industry health claims and benefits, it’s imperative for pet food brands to clearly understand and articulate their positioning strength and differentiation to consumers.

To continue the conversation and learn how L.E.K. can help, please contact us.

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