For a pet care industry that has grown for decades, Coronavirus (COVID-19) poses an unprecedented challenge. The pandemic threatens supply chains, impacting the workforce and availability of key inputs. The recessionary fallout will test pet humanisation trends, particularly in severe downturn scenarios. At retail, COVID-19 is accelerating an online shift as social distancing changes habits. Long-term shifts in pet ownership and corporate strategy are also likely consequences of the pandemic.
The pandemic poses major threats to pet care supply chains. Manufacturing and transportation require a healthy workforce, while the availability of critical inputs may be limited as well. Imports and exports also face obstacles as countries revert to protectionist trade policies or face their own labour issues.
COVID-19 is accelerating a shift to e-commerce that was already reshaping pet care. Social distancing has generated a surge in online orders and led to growth for new models like Click & Collect and Third-Party Delivery. The long-term “stickiness” of this shift will depend on the ability of thinly-stretched online infrastructures to meet demand without long shipping delays or out-of-stocks.
Despite initial sales spikes due to stockpiling, the long-term implications of the pandemic will stem from the recessionary fallout. Pet humanisation helped the industry weather the 2009 recession with impressive results. In more severe downturn scenarios, however, the industry will be much less able to cope. Pet food will see trading down, while non-essential products will struggle most.
Changes in pet ownership is another long-term consequence of COVID-19. In some markets, home seclusion and isolation are driving growth in short-term pet fostering programmes that may translate into long-term pet population growth. In other markets, economic obstacles and misinformation on the relationship between animals and COVID-19 are driving pet abandonments.
Brands face new realities in the context of COVID-19. Innovation is on hold as people look for the familiar, and traditional marketing channels remain limited. Smaller companies that lack resources may become key acquisition targets.
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