Photo: Freshpet / Petco
Will Petco’s Subscription Plan Change How Puppy Parents Feed Their Pooches?
Petco Health and Wellness Company is teaming up with Freshpet to create a customized subscription meal plan for dogs, delivering food straight to the doors of puppy parents.
The program is kicking off with deliveries in 15 states with a national rollout through petco.com planned for later this year.
To get started, pet parents will complete a questionnaire about their dogs, including any food sensitivities and health goals, and receive a personalized meal plan with feeding guidelines based on the pet’s breed, age, activity level, and body type. Subscription meal plans start at just $3 per day.
The custom meal ingredients include natural chicken, beef, salmon or eggs, real fruits and vegetables. No powdered meat meals or preservatives are used in the recipes. Freshpet steam-cooks the food to retain nutrients and refrigerates it until it is delivered to customers’ homes.
Amy College, Petco’s chief merchandising officer, called the program with Freshpet “a breakthrough in the way pet parents can provide their pets with the very best nutrition.”
Petco is looking to cash in on the growing popularity of fresh and frozen pet foods. The category is expected to grow up to four times its current size in four years, based on Nielsen IQ, Packaged Facts and Earnest credit card data.
CEO Ron Coughlin, speaking yesterday on his company’s fourth-quarter earnings call, said the deal with Freshpet validated Petco’s approach to the category and its operational advantages.
“The fact that the leader in fresh frozen chose to exclusively partner with Petco is a validation of the power and advantages of our unique omnichannel and micro-distribution center capabilities,” he said. “We’re delighted to be bringing this industry-first offering to market. But it’s not just our merchandise [that] differentiates us, it’s also our omnichannel delivery capabilities.”
Mr. Coughlin said Petco’s store network provides a structural advantage over online-only retailers and consumer-direct brands. He said that over 90 percent of customers shopping online choose same-day delivery or buy online, pickup in-store when it is available.
“We’re able to leverage our pet care centers as micro-distribution centers, getting product to customers faster and in many instances with lower fulfillment costs,” he said.
Petco reported a 4.5 percent increase in same-store sales during 2022, a 23.5 percent jump over two years. The retailer has rung up 17 consecutive quarterly gains.
-
Freshpet and Petco Launch Exclusive Industry-First Partnership Offering Customized Fresh Pet Food Subscription — Petco/Freshpet
-
Petco Health and Wellness Company, Inc. (WOOF) Q4 2022 Earnings Call Transcript — Seeking Alpha
-
Petco Health + Wellness Company, Inc. Reports Fourth Quarter and Full Year Earnings, Issues Outlook — Petco Health + Wellness Company, Inc.
Discussion Questions
DISCUSSION QUESTIONS: Do you expect fresh and frozen foods to affect how Americans feed their pets? Do you agree that Petco’s store-based model gives it advantages over online-only companies (Amazon, Chewy, The Farmer’s Dog, et al.) in the fresh and frozen category?
Poll
Loading …BrainTrust
Gary Sankary
Retail Industry Strategy, Esri
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
People LOVE their pets and many will love this service from Petco. As we have seen in other categories, leveraging existing stores can give Petco a distribution/logistics advantage over online-only players. Furthermore, having physical stores creates an opportunity to get additional sales and create personal interactions with customers. If well executed, this program could be a big win for Petco.
Fresh and frozen pet food is a tough sell, especially during challenging economic times. That said, there is a market for this product and, given that fresh food is a challenge for home delivery, I think Petco’s local stores will give them a slight advantage in this category.
Pet food is a perfect candidate for a subscription/delivery model. The timing is predictable. It’s usually bulky and heavy. Perfect to have it just show up on your doorstep. Add fresh/frozen to the equation and it’s a no-brainer for your pet. Now you just need room in the freezer.
There’s definitely a market for it, though I’m not sure how large it is. And of course if you’re going to get fresh food, you want to pick it up and get it home asap….
Petco, in my experience, has been challenged to keep its brand promise, which is to say it has been out of stock on too many of the things I want, and it remained that way no matter how many times I asked. I tried everything to get them to carry what I needed, which was not exotic. I had three cats for years and, in the end, switched to first Amazon and then Chewy, because I got worn out on going to the store and the product I needed not being there.
Fresh and frozen foods are the way to go. This has the potential to be big for Petco.
We were loyal Farmer’s Dog customers when our pups were still with us. Based on the company’s service and empathy we will be again someday. If Petco has an advantage over other fresh and frozen food brands it is the ability to pick the foods up in-store and same-day delivery. This is where brick-and-mortar will always win over online.
Fresh and frozen pet foods have been around for some time now. I believe that there needs to be a value proposition, especially when a customer has more than one pet, in order to move to fresh/frozen pet foods. In this current market, I believe that will be a hard sell–but time will tell.
I am such a fan of this. I really believe the future of retail lies in custom product creation, especially in a category like this where many pet owners struggle to cook meals for their pets with dietary issues.
Absolutely! Health, wellness and fresh food is a big lifestyle trend, so it makes sense that people will extend the same dietary concerns to their pets. Combine that with the uptick in meal plan subscriptions driven by busy lifestyles and it makes sense that demand will be high. A local store footprint will definitely give Petco an advantage. But don’t forget that Amazon has a network of Whole Foods stores it could potentially leverage as well.
In summary, yes and yes! The potential to offer new and improved value to pet parents appears to be endless in terms of opportunity and real growth — as well as recession/inflation resistant. Delivery of healthier, fresher, better food is a perfect opportunity for Petco, an established brand with an established national distribution network that can provide much more to the pet parent visiting their stores.
While I think a subscription model is great for pet food because it has a predictable demand schedule, I am not sure it will inspire consumers to change their pet food to fresh and frozen options. We have been ordering dog food online for delivery as a convenience and it is great. However, we are not willing to commit to the expense of fresh and frozen foods for our pets. We love them a lot, but not that much.
This is a good extension of product and services to Petco’s customers. Pooch owners love their dogs, so why wouldn’t they take advantage of the Petco offering? If customers can afford it, and their dogs love it, and it’s easy (and it can’t be any easier than the “meals” delivered to the front door), then test it in some markets to see how the customers respond.