Pet Food Spending Slows in the Face of Inflation

Americans are tempering their spending on pet food as prices for feeding Rover and Whiskers edge ever higher.

The cost of sustenance for animal companions is rising faster than inflation. Pet food cost 10.4% more in July than it did a year earlier, according to the Bureau of Labor Statistics, even as year-over-year inflation in July fell below 4% across the economy.

Pet owners are accustomed to paying more. A September report from veterinarians.org found that dog food alone is 45% more expensive this year than it was in 2020. Yet spending on pet food remained steady even as those prices rose, leading to runaway growth in sales of both premium and non-premium brands.

Not any more, as that growth is now slowing, according to the Wall Street Journal.

Sales of non-premium pet foods jumped more than 20% in the first three months of 2023, the Journal reported, citing an analysis from the research firm Consumer Edge. In the second quarter, however, that growth fell to 14.8%, down from 18.3% in the same quarter in 2022.

Premium pet food sales have seen a similar decline, rising only 8.5% in the second quarter of this year compared with 10.7% growth in the first, and 21.3% growth in last year's first quarter.

A representative of Consumer Edge did not immediately respond to request for comment on their analysis.

“In times of recession or economic stress, first you trade down on your own food, then your kid’s food and then your dog’s food. That’s what history would suggest,” Max Gumport, a U.S. packaged foods analyst at BNP Paribas, told the Journal. “This time is appearing to be different.”

Some of the biggest pet food makers are feeling the effects of the slowdown. General Mills, which owns Blue Buffalo, has said sales of the brand were roughly flat in the most recent quarter compared with the same quarter last year.

General Mills CFO Kofi Bruce told investors at a conference earlier this month that consumers are more frugal in their pet food spending, the Journal reported.

“It’s very clear we’re going through an environment where pet households and pet parents are seeking value, in everything from pack sizes to where they shop for pet food,” Bruce said at the conference. He attributed pet food inflation to lingering supply chain disruptions from the coronavirus pandemic.

The veterinarians.org study noted the cost of ingredients for pet foods are also on the rise, outpacing inflation as a whole.