Special Report Petco Health + Wellness Company

Petco had a solid 2022, spearheaded largely by its focus on services and partnerships, which it continues into 2023. In March, the company shared its full 2022 earnings, delivering a net revenue of $6.04 billion, which was up 3.9 percent versus the year prior. The company attributed its revenue growth to its consumables business, up 12.9 percent versus the prior year, and services and other business which was up 20.2 percent over the prior year. This growth helped offset its supplies and companion animal business which was down 8.9 percent versus the prior year.

“Record fourth quarter sales, with cash flow exceeding expectations, rounded out a solid fiscal year, once again demonstrating the enduring strength of the pet category and Petco’s ability to grow through economic cycles,” said Petco CEO Ron Coughlin. “I’m grateful for our incredible partners and their ongoing commitment to Petco’s mission of improving the lives of pets, pet parents and the partners who work at Petco. As we look ahead, the pet category remains resilient and growing, and we’ll continue to execute day-in and day-out while we progress our differentiated long-term growth strategy.”

That strategy so far in 2023 includes streamlining an integrated omnichannel experience with regards to its Vital Care program, expanding its exclusive shop-in-shop partnership with Canadian retailer Canadian Tire and partnering with Freshpet to offer a customized fresh pet food subscription and delivery service.

Freshpet Custom Meals

Petco’s partnership with Freshpet makes it the first national brick-andmortar pet retailer to offer this kind of fresh pet food subscription through a new e-commerce brand: Freshpet Custom Meals.

“It’s exciting to see the demand for fresh pet food continue to grow,” said Scott Morris, Co-Founder and President of Freshpet. “As shoppers seek healthier, real food for their pets, they’re also looking for solutions that provide added convenience. Our partnership with Petco allows us to deliver on both—creating customized healthy meal plans delivered to consumers’ doorsteps.”

Freshpet Custom Meals are the result of increasing consumer interest in direct-to-doorstep fresh, personalized pet meal plans. According to Nielsen IQ, Packaged Facts and Earnest credit card data, the fresh-frozen pet food category is expected to grow three to four times its current value, reaching up to $6 billion in the next four years, and the direct-to-consumer pet segment is growing at an even faster rate than pet e-commerce.

After completing a short questionnaire on their dog’s attributes, sensitivities and health goals on petco.com, pet parents will receive a personalized meal plan with specific feeding guidelines based on the pet’s breed, age, body type, activity level and more. Pet parents can select their preferred delivery window for the food to be sent via Petco’s delivery services. The subscription meal plan starts at $3 per day.

All Freshpet Custom Meals recipes are made with natural chicken, beef, salmon or eggs, real fruits and vegetables and never any powdered meat meals or preservatives. Each meal is gently steam-cooked to retain vital nutrients and kept refrigerated until it reaches the pet parent’s home.

The offering has launched regionally across 15 states including California, Texas, Florida and New York, and will be available nationally via petco.com later this year.

This partnership represents Petco’s next step in its fresh food strategy. Last August, it released its WholeHearted Fresh Recipes line, co-developed with JustFoodForDogs, a long-standing Petco vendor, which includes frozen nutrition for dogs as a response to the growing consumer demand—led by Millennial and Gen Z pet parents—for premium, minimally processed and high-quality r Cont'd on Pg. 14