Background and challenge
A leading U.S. pet supplies company, known for its best-in-class brand awareness and track record of innovative products, enlisted L.E.K. Consulting to conduct a comprehensive market study — including making recommendations for growth opportunities — to support its sale.
Approach and recommendations
We began by framing the size, segmentation and growth of the client’s core market, with a particular emphasis on the impact of the COVID-19 pandemic and the outlook for the future. We took a data-driven approach to articulate the key growth drivers impacting the market, such as growth of the pet population, a trend of pet owners spending more meaningful time and interaction with their pets, an emphasis on premiumization and innovation, and more. This analysis also made clear that while these drivers were being exacerbated by the pandemic, none were temporary and in fact the outlook for market growth was very positive. Critical to this effort were our robust proprietary models regarding pet population size and growth, and models around channel dynamics.
We also helped articulate the key competitive dynamics among pet brands in light of retailers’ needs. We brought to light how the client’s brand was uniquely positioned, not just by its size but also its strength and its track record of innovation — which, given the more commoditized nature of the pet supplies category versus other areas, like pet food, is more of an exception than the rule.
We were also able to juxtapose the client’s performance with market estimates to demonstrate how it had consistently been gaining share while being exposed to the most attractive, fastest-growing product subsegments. We conducted a robust consumer survey that further validated the brand’s strength and its overall competitive positioning. This survey helped the company prioritize the most attractive near-term growth opportunities as well as articulate the total opportunity size for each of them, complete with rationale for why the client could win in those areas.
We were able to affirm the client’s strong position in a large, growing and attractive market and identify key growth avenues that would position the company for future success, which resulted in its ultimate sale.
Organization & Performance
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