Understanding the Invisible Economics of Pet Food

Food & Feeding

Direct to consumer pet food

In recent years, pet food has undergone a revolution. Didn’t notice? Of course you didn’t, because you’re a regular person who doesn’t think about kibble 24/7. But while you were going about your daily life, some pretty positive changes have been made around the food available for your best mate.

Let’s back up: Historically, people bought dog food from big shops. This probably involved driving there, finding a park, schlepping heavy bags, and being limited to the options on the shelf in front of them.

But the industry has begun to change with direct to consumer pet food: call it the dog-economy 2.0 if you will. Actually, don’t call it that, just know dogs are winning out with the emergence of a new lot of brands with innovative business models.

But what does that mean for you and your pet? Let us explain.

The Economics of Store Food

Dog food takes a long journey from the moment it’s made to being dragged into your laundry and poured in the bowl.

Firstly, there’s the brand. We’ll hypothetically call them “Nature’s Bowl”. You can picture the type: Big 20kg bulk bags with $120 price tags. The label probably has a cute dog running through a field with claims like “superfoods” and “190% meat content.”

Now, chances are, Nature’s Bowl don’t make the food themselves. Few Australian-owned brands actually do. They have a manufacturer make it for them. That’s fine. Equipment is expensive right? But the ingredients in that $120 bag likely cost around $15-20 to buy. The store then buys the bag for about $70, and almost doubles the price for you.

Let’s break that $120 price tag down, to see what you’re really paying for:

  • $55 store markup (to cover marketing, staff, rent, tax and profit)
  • $25 brand markup
  • $20 manufacturing cost
  • $5 shipping and fulfilment
  • $15 ingredients

Yep. So you could be paying $15 for ingredients and $105 for the “business” of dog food. And the situation is even worse per kg for smaller bags.

Direct to consumer pet food is changing the industry. Photo by Camylla Battani

Enter Direct to Consumer Pet Food

Increasingly, in other areas of our lives, we’ve worked out that buying direct from a brand saves a lot of time and money. Think of that affordable skincare or mattress start up you discovered on Instagram. You’re paying less and getting better service because you’re cutting out the middleman.

Apply that thinking to pet food and you automatically cut out the $55 store markup. Now, aside from a few extra dollars shipping, you could keep everything the same—including only spending $15 on ingredients—and get the bag for $65, but you still have the problem of feeding your dog a pretty crappy dinner.

Which Brings Us to Scratch

At Scratch, that store margin is put back into quality ingredients that are better for your dog’s health and well being, delivered direct to your door.

Again, let’s break down what that option looks like:

  • We sell two recipes starting from $69 for a 7.5kg box.
  • We spend closer to $25 on premium ingredients per box (nearly $70 per 20kg)
  • You tell us about your dog, and we work out a personalised feeding plan.
  • Knowing how often they need food, we can time when we manufacture to send your dog a much fresher product.

It’s not just about the food. We really care about your dog, and have a bunch of ways to support you.

  • We offer live chat so you can ask questions to the real people who make Scratch.
  • We’re committed to transparency, accountability, and doing the right thing by your dog.
  • We ship smaller boxes of fresher food, free to you more often.

Stores will always have their place but their markups are starting to make less and less sense. We believe that starting from Scratch helps us create a product that’s good for your dog, your wallet, and your schedule.

Learn more about Scratch here.

Image Credit: Well Pet Coach

For more on the pet food industry, check out:

CBD for Dogs: Trend or Here to Stay?

Home Cooking For Your Dog

Who Owns Your Pet Food Company?

Written by on for Off The Leash

Article last updated on February 17, 2022

Mike is a huuuuuuge dog lover and the Co-Founder of Scratch. He's spent his life surrounded by Collies and Cocker Spaniels. You can find him sipping coffee in Melbourne and pointing out Bernese Mountain Dogs to his girlfriend, in hope that she'll finally let them get one.
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