Tuesday, September 29, 2009

Pet Food Industry Enjoys Strong Sales in Weak Economy or Alternative Explanation: Things Are So Bad People are Now Eating Dog Food

Man bites dog...again.

Behold once more the wisdom of Good Times. Is there any life dilemma or situation that James Evans Jr. and company cannot resolve? Could it be that the bourgeois, naive reporter who compiled the following piece simply doesn't know how hard folk have/are having it in this economy?

I would like to believe that some folks are toughing it out and shorting themselves in order to keep their pets happy and well fed (I know me and my people would and are)--but, so many other sad and depressing data points are suggesting that our animal friends are sadly the first to be deemed a "luxury" item and thus discarded because of the horrid state of the economy.

Unfortunately, this is one more story that is being sadly underreported: along with good hard working Americans now being forced to live in their cars and in tent cities, my smart money is on the fact that pet food sales are "stable" because an increasing number of American families have been forced to make dog and cat food a staple of their diets. Courtesy of the Denver Post:

Pet Food Industry Enjoys Strong Sales in Weak Economy

Despite rising unemployment, credit-card debt and thinning discretionary spending, American pet owners remain loyal customers of an industry that is enjoying consistent growth.

The pet-food industry is fueled by consumers who won't back away from spending on food and necessities for their animals, though they're likely to pare down the family vacation.

The strong spending comes amid price increases in nearly every pet-food category, the result of rising costs of fuel, ingredients and transportation for manufacturers.

Dogs and cats, though, still feel the pinch in other ways, owners said. Fewer treats, new toys or accessories such as collars and leashes, even fewer trips to the groomer are all part of the cost

"We've cut back for us all," said Kathy Schmidt of Lone Tree, whose miniature schnauzer, Archie, has had to wait longer between clippings.

Though the family has trimmed back, Archie still eats pretty well because "he needs to eat what he's accustomed to," Schmidt said.

That's one reason spending on pets remains robust, with total sales of all pet products topping $45 billion this year, a 5 percent increase, according to the American Pet Products Association. And retail sales of pet food are up 4.5 percent in 2009 at about $18 billion. Future pet-food sales are projected to top $21 billion by 2013.

It's showing up at local stores, where boutique owners are enjoying growth as many of their counterparts catering solely to humans struggle.

"We've seen double-digit growth this year. The recession hasn't really touched us," said Deb Dempsey, owner of Mouthfuls in Denver's Highland neighborhood. "We're not selling tons of bedding and clothing, and treats and durable goods, the foofy stuff, has stayed down."

Dedication to their pet's health apparently has much to do with how owners spend.

"We have so many customers who say they'd eat macaroni and cheese before they'd cut back on their dogs," she said.

The pet-food recalls of 2007 didn't leave the industry unscathed but did reinforce owners' focus on quality, not price.

"I'll go to McDonald's and eat lunch from the dollar menu, but a can of food isn't something I want to skimp on," money manager Pat Janssen said of his dog-food buying. "But there are fewer toys and chews in the bag these days."

Prices are stabilizing, but consumers shouldn't expect too big a drop any time soon. Much is because of long-term supply contracts producers locked into when prices were already high, analysts say.

"We're trying to cut back, though we're not real good at it," Mark Niederhauser said of his two chow-chows and papillon during a recent trip to PetSmart near Park Meadows shopping center.

"I just can't deny the dogs."


PPR_Scribe said...

I am not sure about your hypothesis. I think most pet food is more expensive than people food. At least it was the last time I had a pet (admittedly, a while ago).

I think this is just another example of (some) Americans pampering their pets more than is reasonably necessary. In this economy, a "pet day care" center just opened up in my neighborhood...

Werner Herzog's Bear said...

Based on unscientific observations I've made at the grocery store recently, I think you're on to something here.

In general the press seems to be missing the real hardship of these times. I read a New Yorker article recently about people keeping chickens for reasons related to environmental impact, and not mentioning those who do it out of economic necessity, like my grandparents did.

chaunceydevega said...

@PRR--I don't know. I think folks are focusing on the high end, specialty stores--as in the article. Go to the local supermarket and you can buy a huge bag of cheap food that would feed a family for some time.

@Wernor--I hope I am not, but this would be a huge story if someone had the courage to uncover it...but would the corporate media want the true state of our decline to get out? Where are the Freakanomics folks when you need them? Maybe I will do an informal survey of the local supermarkets for my own piece...


Sharon said...

I don't think so and didn't think so when this idea was circulated as "fact" thirty or forty years ago for the following reasons:

1. You don't need meat (especially the very low-grade meat in pet food) to be healthy.
2. High-grade pet food is more expensive than similar quantities of more palatable human food such as pasta, bread, cheese, eggs, and potatoes.
3. Most people would have to be literally starving to chow down on KalKan or Friskies.
4. Pet food sales don't decrease until a recession is very bad indeed. People cut back on extras but don't view their dogs or cats as "extra."

Shae said...

I'm with PBR and Sharon. The days in which Grandma ate cat food were days in which cat food was cheaper than tuna and resembled tuna. Now pet food is weirder and more expensive and people food is cheaper.

I never even thought of Sharon's point, which is great. I'd eat a shit ton of plain pasta before I'd move on to dog food.

Deb & Tonya said...

I actually think it's because people understand that good nutrition is the cornerstone to health - for both companion animals and humans! In reality, an "expensive" pet food actually costs less PER SERVING than a cheaper grocery store food. If the food is full of cheap fillers, it takes more quantity to provide the same nutrition. That's no bargain!

Lady Zora, Chauncey DeVega, and Gordon Gartrelle said...

great convo,

@Sharon: what if folk are desperate and are literally starving? The local food banks are now pressed to feed folk, what if one can't get the basic minimum there?

@Shae: good point, but what if one is driven to utter desperation, and doesn't have the info about nutritional content, or access to other means?

@Deb: looking at the rates of diabetes, obesity, and super morbid obesity in this country, do folks really know that good nutrition is the cornerstone of health? and what if you know this, but can make ends to meet to that end?

chauncey d

Sharon said...

>>what if folk are desperate and are literally starving? <<

How desperate?
You have two dollars? I live in Canada where food is more expensive than in most of the US but last week the local store had a sale on russet potatoes, 10 lbs for $1.99. Or you could buy a couple of cans of the lowest-quality, nastiest dog food for the same two dollars.

I promise you that for five bucks I could put together several days worth of food for a single person -- it wouldn't be a "balanced" diet but you wouldn't be hungry and you wouldn't be eating pet food.

Food banks are being hit hard but I haven't heard of any that are stripped to the walls.
Get a few cans of beans and a bag of rice and you could eat for a week on less than $10. It might be boring but none of the meals feature souffle a la Whiskas.

I still don't believe any of the stories about people having to eat dog/cat food. If you have zero dollars you can't buy anything. If you have 1 buck or two, you can buy food.