The pet industry continues to grow.
Concerns about skyrocketing gas costs wreaking havoc on consumer budgets and triggering a recession may be exaggerated, especially when viewed through the lens of the pet goods industry.
According to all accounts, the business, which has seen a significant increase in demand as a result of homes adopting pets during the pandemic, is still experiencing robust demand. According to the most recent Nielsen data, pet food sales increased by 12.7 percent in the four weeks preceding February 26 (the most recent available). Sales of dog and cat food increased by 12.3% and 15.8%, respectively.
Sales of pet products increased by 6.9%, with cat litter and pet toys leading the way.
I'm not a financial expert. It is my responsibility to be prepared in the event of a recession. We'll begin with some background information. And the pet industry has a reputation of being one of the most resilient of any industry, On a new episode of Yahoo Finance Presents, Petco CEO Ron Coughlin remarked.
Here are a few more indicators that the pet spending boom that began during the COVID-19 is still going strong.
Petco's quarter is crushed.
Sales at the pet supplies retailer increased 13% year over year in the fourth quarter, according to a report released earlier this month. Operating profits climbed by 16 percent after adjustments. It was the company's ninth consecutive quarter of double-digit percentage revenue growth.
Consumers, according to Coughlin, aren't objecting to increasing goods costs, which are driven in part by inflationary pressures on manufacturers.
There was essentially no impact on the pet sector during the Great Recession. In the industry, people don't actually change their ways. Having said that, it is our responsibility to ensure that we have offerings for customers in a downturn. That's why products like Vital Care might be beneficial. For them, we have gigantic bags and other options. However, the pet sector has remained relatively unaffected by macroeconomic factors "Coughlin remarked.
Sparky to be a Blue Buffalo?
General Mills' Blue Buffalo pet food division was one of the company's strongest businesses in the most recent quarter, not Honey Nut Cheerios.
The company announced on Wednesday that sales in its pet food division have increased by 30% year over year. The division's adjusted operating earnings increased by 8% year over year.
We expect the category [pet food] to continue to perform well, and we believe our section will perform well as well. And even during the last recession, which was a long time ago, one of the things we looked at before buying Blue Buffalo was how the category did through a downturn, and it turns out it does quite well. In difficult times, the last thing you want to do is offer your pet sub-optimal nutrition. And, on top of that, I'd say that the humanization of pet food is the current and, I believe, future trend in the pet food industry. And considering that we're the number one natural pet food in the pet market by a long, long way, we're certainly very well positioned in that area "On an earnings call, General Mills CEO Jeff Harmening stated.
Blue Buffalo was purchased by General Mills for $8 billion in 2018.
Fido's food is always fresh.
Freshpet, a pet food manufacturer, is coming off a solid quarter.
Sales increased 37.1 percent in the most recent quarter, up from 33.5 percent for the entire year of 2021.
Freshpet continues to struggle to keep shelves stocked due to high demand for fresh pet food.
The biggest problem we've had is that we've gone through periods were we were absolutely out of cat food. We're entirely out of bags, and we're absolutely out of rolls On an earnings call, Freshpet COO Scott Morris revealed. What I can tell you now is that when those things are restocked, the growth rate will be tremendous and explosive. So, when we finally get all of our items in, I believe we'll see a huge increase in penetration.