2019 AAEP Equine Buyer's Guide | 23
SOURCES:
https://blog.kissmetrics.com/too-many-choices
https://www.nielsen.com/content/dam/nielsenglobal/ru/docs/2018.02%20-%20Global
%20-%20The%20Rise%20and%20Rise%20Again%20of%20Private%20Label.pdf
https://www.winsightgrocerybusiness.com/retailers/private-brand-share-could-grow-
25-next-decade-study
https://www.packagedfacts.com/Millennials-Pet-Consumers-9858011/
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4827751/
https://www.mordorintelligence.com/industry-reports/veterinary-paraciticides-market
https://stores.org/2018/02/26/the-rebirth-of-private-label/
http://veterinarynews.dvm360.com/pricing-struggle-how-high-too-high-pet-
owners?pageID=2
The rise of private brands
Consumer behavior is changing. They want more value for
their money and recognize the improved quality of many
private brand offerings. Consumer confidence in private
brands continues to grow as U.S. private-branded products
showed two percent growth in 2017, outperforming
branded tiers. In fact, private brands are growing three
times the rate of national brands, with shares projected to
grow to 25 percent in the next decade.
One of the key drivers for the growth of private brands
is the vertical integration of retailers and distributors. As
companies vertically integrate, they uncomplicate the
process of getting products into the hands of consumers.
This translates to cost-saving alternatives in a variety
of product categories. Millennials in particular are more
willing to buy less expensive products. They have lower
incomes and spending power, so for this demographic, value
shopping is critical. Millennials are more likely to compare
ingredients, and when they're the same or very similar, they
don't want to pay more than necessary.
Consumers aren't foolish — if a company offers a sub-par
quality product, that perception will reflect negatively on
the company that produced and distributed it to market. As
such, the quality of private brand products has increased in
recent years.
Private brands in veterinary care
How does all of this translate to the veterinary care industry?
In a time of flat industry growth, many veterinary hospitals
have relied on service fee increases to drive incremental
growth within their individual practices. Unfortunately,
recent market studies have shown a direct correlation
between rising fee schedules and decreased veterinary
visits. This should come as no surprise, as cost-conscious
millennials have now become the largest demographic of pet
owners in the market.
Adopting private brands within a veterinary clinic is a great
way for practices to increase profitability while maintaining
their current fee schedules. When veterinarians develop an
annual budget, pharmaceuticals and supplies are typically
among the most expensive items on the list. Even making
small changes, such as switching to private brands for
routine procedure products (such as syringes and gauze),
can help veterinarians find savings fast. When maintaining
the same retail price or service fees, the lower cost of private
brand items can boost practice profits by as much as 20-30
percent.
Advantages to purchasing private
brand products
Digital channels have made price comparisons easier and
faster than ever. When looking at brand name and private
brand products side-by-side, it's clear which product comes
out on top. Private brands allow consumers to leverage
the scope of a company and allow the company to build
trust through their product offerings. When it comes to the
veterinary world, private brands:
• Provide access to a large selection of pharmaceutical and
hospital supply products that are of comparable quality to
many leading national brands
• Offer a trusted brand that clinics are familiar with across
many essential product categories, decreasing decision
fatigue while shopping
• Can help clinics maintain competitive fee schedules during
challenging market conditions & compete in an age of
digital price shopping
• Present clinics an avenue to increase profits while offering
cost-conscious clients options to meet their budgets
As a trusted healthcare provider, you can remain confident
in the knowledge that you'll continue offering high-quality
products to your clients. Consumers have already taken the
plunge. Isn't it time you switched to private label brands?
With Covetrus comes an even more comprehensive
set of integrated services and technology solutions centered
all-around the veterinary practice, including our Global
Prescription Management platform and online pharmacy
service.
Call 855.724.3461 to schedule an
appointment with your Covetrus
representative who can generate a
customized cost savings report on
everyday items you purchase for
your practice.
