Claws and effect: A nationwide pet-food shortage is helping businesses thrive
Empty shelves at Coles and Woolworths has been an opportunity for up-and-coming small businesses in the pet-food industry.
You may have heard the news: the pet-food aisles in major supermarkets across the country have been a bit bare in recent weeks.
Its thanks to a supplier stoush that’s seen Mars International — the global giant behind more than 50 pet food brands, including Whiskas, Pedigree and Royal Canin — halt supply to Woolworths and Coles.
The price dispute has left shoppers livid, with photos cropping up all over social media of empty shelves and hungry animals.
After all, millions of pets across Australia still need to eat, so while the big players are tied up, entrepreneurial business owners are stepping in to fill the gap.
Anna Podolsky, founder and chief executive of Lyka, a human-grade dog-food subscription business, has been working late nights with her team to keep up with a swarm of new customers.
“It’s picked up quite a bit, we’re certainly under the pump,” Podolsky tells SmartCompany.
“Since the shortage, we’ve seen a 25% uplift in new customers subscribing.”
Podolsky says the dispute has been a catalyst for the broader market shift towards better quality pet food she took a bet on when starting Lyka in 2017.
“People are questioning whether products that sit on shelves for months or even years are the best thing for their dogs,” she says.
#woolworths Petrie. When are you going to get some pet food in? It’s been over a week now and your shelves are still empty! Do I need to go to coles? pic.twitter.com/e4bl2CkdaP
— Andrew Deane (@DrAndiDeane) April 8, 2019
The so-called ‘fur baby’ trend has driven an explosion in pet-related markets in recent years, helping the industry eclipse $12 billion in recent years.
Businesses have steadily been cropping up for everything from daycare to taxis and even funeral services for our furry friends, as owners become increasingly willing to spend big.
Pet food has been no exception. IBISWorld Senior Industry Analyst Bao Vuong says major suppliers such as Mars are being disrupted by a move to gourmet pet meals.
“It’s been one of the major contributors to growth over the last five years,” he tells SmartCompany.
Hi there, we apologise for the recent supply shortages on some pet food brands. We have secured the supply of a number of popular pet food lines and you can expect to see these products return to our shelves soon, thanks for your patience.
— Woolworths (@woolworths) April 5, 2019
Vuong says the shortage could spell trouble for both Mars and the major supermarkets as those who make the switch might not look back.
“Normally it’s a habit, you just come in and out of the supermarket.
“But if you are forced to think about it a bit more, you realise quality is really important,” he says.
Dean Pantalleresco, owner of independent pet-food retailer Habitat Pets, is confident he’ll be able to count on return business from an influx of new customers.
“It’s been good to get more customers in the door, but also because the supermarkets don’t tend to stock good quality premium food, it’s been great to get these pet parents to try new things,” he tells SmartCompany.
Habitat Pets trades through two physical stores in Victoria and a booming e-commerce operation.
Pantalleresco says food sales have shot up almost 20% since the shortage began earlier this month and is optimistic the business can capitalise on industry trends as he looks to open more stores.
“It’s taken years of education, but customers have become more aware of what they should be feeding their animals,” he says.
Podolsky doesn’t think it takes long for customers to recognise the health benefits of higher quality pet food, saying it’s “rare” to see people switch back to the supermarket.
Ultimately, she believes Woolworths and Coles will have to adjust their strategies to include more gourmet options.
“Woolworths’ whole strategy across all their categories is to make a more localised offering … they really want to tailor their product to the demographics of a store,” she says.
“In the future, there will be more premium options.”
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