Battleground Pet: Strategic Targets for the Future

Hispanics and Generation Y are two demographic populations that will be instrumental to intermediate and long-term success for pet industry companies that can effectively capture them, according to Michael Johnson, vice president of marketing and information at Chuck Latham Associates Inc., during his “Battleground Pet!” presentation at the Pet Industry Distributors Association’s Management Conference and Annual Meeting in Carlsbad, Calif.

These are two segments, especially Hispanics, that the pet industry doesn’t currently excel at reaching but that represent huge potential markets for pet products. Johnson sketched multiple demographic segments during his presentation.

“Hispanics are hugely important, and we’re not doing a good job addressing them in pets,” he said, noting that he often sees bilingual packaging in English and French (presumably for the French Canadian market) but rarely in English and Spanish, despite the significant and burgeoning Hispanic population.

Relatively young and growing, the Hispanic segment tends to be very brand loyal albeit price sensitive, Johnson said. They currently shops for pet products largely in the grocery channel because no one is reaching out to them, he said, even though they are highly apt to consider their pets as part of the family—a factor in willingness to spend more. They are not, however, particularly swayed by a product’s “natural” attributes. Natural, of course, has been a key and growing driver of pet products, and other goods, in recent years.

Because the Hispanic segment tends to be family- and friend-oriented, they are likely to share product information, good and bad. As a segment, Hispanics are also highly involved with social media and receptive to television and radio advertising, he said.

Generationally, Generation Y (people born between 1982 and 2000) is looming larger in the pet industry’s future. Not that such strategically significant segments as “seniors” and the Baby Boomers can be neglected, but Generation Y represents a huge population bubble of more than 100 million people, eclipsing Gen X. But the pet industry must turn them onto pets, Johnson said.

Unlike the Hispanic segment, where the battle might be which companies do the best job in reaching out, Generation Y may represent an industry-wide challenge of building pet ownership. 

Generally speaking, this generation is deferring and minimizing pet ownership: they are marrying later and having children later. They are also increasingly urbanized, meaning they live in apartments and condos that are smaller than the houses of past generations. Smaller places mean smaller pets. Multi-unit housing is also more likely to include pet-restrictive policies, potentially limiting size, type and number of pets.

As a group, Generation Y tends to be deal-motivated (hello, Groupon), brand switchers and likely to decide at the store which brand to buy. On the other hand, they value natural and sustainable products and the charitable affiliations of manufacturers and retailers, Johnson said.