Product Innovation Purr-sues Consumer Cat-ittudes in this $10.7B Market
I love cats (and dogs, too! Really, all animals). I am not alone. Author Charles Dickens asks, “What greater gift than the love of a cat?” Dickens and I are not alone in our love of the feline. Cats have been the lovingly acknowledged companions of many: Winston Churchill, Abraham Lincoln, Mark Twain and Catherine the Great of Russia. And today, we’ll get to contemplate cats in these customer segmentation examples.
Unlike dogs, the current theory is that cats domesticated themselves about 12,000 years ago with the start of the agricultural revolution. The more docile, human-oriented cats who came to prey on the mice drawn to the stored crops eventually became the breeds of domesticated cats that we know today.
Skipping a few thousand years, by 2022, 29% of US households owned a cat, according to a survey done by Forbes. Given that about half of households who own a cat have more than one cat, there are about 60M cats as pets in the US. That is a lot of hungry mouths to feed. And it certainly leaves room for several customer segmentation examples.
Before Jumping into the Customer Segmentation Examples, Here’s an Overview of the Cat Food Market
In 2020, total cat food sales in the US were about $10.7B and had grown 9% from 2019. This compares to a total pet food market of $95B, which Insight to Action detailed in our article, “Pet Food Growth Strategy.”
Dry food sales were stagnant, but wet cat food sales grew 6% from 2019 to 2020, according to market research firm IRI (now Circana). Frozen cat food grew 14.5% in the same time period. About a third of cat households feed their cats a combination of dry, wet and frozen cat food. Moreover, pet owners are concerned about the food they are feeding their pets and are willing to spend more. An American Pet Products Association (APPA) survey showed that 51% of pet owners are willing to pay more for ethically sourced, sustainable products.
With the rising cost of pet food, 11% from 2022 to 2023 according to the July 2023 consumer price index, consumers are trading down from premium to standard pet food. Still, both premium and standard pet food are experiencing healthy growth:
|First quarter 2023||14.8%||8.5%|
|Second quarter 2023||20.8%||10.7%|
Cats are not worried. As J.M. Smucker’s CFO Tucker Marshall shares:
“The commitment that a parent has to the animal is pretty meaningful and so they will continue to feed and treat their animal even in times of maybe less discretionary income.”
You’ll begin to see several customer segmentation example opportunities in the data, including by:
- Desired product type
Customer Segmentation Examples:
Cats do not buy cat food, people do. Fortunately, many people want to uncover and take care of the needs of their cat, which has been the impetus for innovation by cat food manufacturers. The market for cat food is large and growing due to several human-related factors:
- Cat owners spend about $600 per year on their cat, with more than half ($310) going to food
- 76% of cat owners consider the cat to be a part of the family
- More affluent households ($100K+ income) are more likely to own a cat – 40% versus the average of 29%
A study by Tree Top Inc. and Mintel reveals another possible customer segmentation example: cat health. Pet owners are looking for products that meet specific health needs of their pets, including:
|Needs||% of Pet Owners With Interest|
|Skin and coat health||49%|
|Immune system support||46%|
Recent research by Nationwide, the country’s largest provider of pet insurance, provides the top 10 reasons cats visit the vet, which sheds more light on cat owner’s health concerns for their pet (the #1 reason cats visit the vet? Bladder and urinary tract disease.)
Customer Segmentation Examples:
Purina’s Innovation in Product Development
The Purina division represents 19% of its parent Nestle’s total sales. From its website, the brand’s three-part philosophy is:
- Quality and Safety
Looking at the innovation aspect of Purina, it has created products that meet the identified needs of pet owners. Customer segmentation examples include pet owners whose cats have health concerns. Purina offers cat food specifically designed to manage or improve health conditions like:
- Urinary Tract
Health problems are not the only customer segmentation examples that Purina strives to satisfy. Many cat owners want the same claims of Non-GMO, Organic or Natural that they expect for themselves. Purina meets these needs as well, with special formulas that are:
- Grain free
- High protein
- MSC (Marine Stewardship Council) certified
- No artificial flavors or preservatives
- Contains prebiotics or probiotics
Further, Purina has the price range in its products to meet the needs of cat owners, even if they downgrade their cat’s food with lower-priced products like Kit & Kaboodle and Friskies. Segmenting by price is more traditional in the world of customer segmentation examples.
Innovation Supports Customer Segmentation Examples
The outlook for cat food looks rather purr-fect for the coming years, as pet food manufacturers strive to meet the increasingly specific needs of our feline companions. Purina has done an excellent job to date of uncovering and innovating to meet these needs. Perhaps the brand will follow suit with Mars Petcare in the United Kingdom and offer a 100% insect-based cat food. I think my cats will still prefer fish flavors!
For more customer segmentation examples, visit our Customer Segmentation Resources. Get regular insights from our experts by subscribing to our newsletter. And, start a conversation with the Insight to Action team during our Open Office Hours.