The Farmers Dog Customer Lifetime Value Data Analysis
Industry Overview
As of 2022, the pet industry is valued at $261 billion and acts as a dedicated marketplace where the production, consumption, and cultural activities surrounding the “pet economy” thrive. The compound annual growth rate is expected to average 6.1%, with Asia and Latin America having taken on the highest growth percentage in recent years (Roberts, 2022). When looking at the vast categories within this marketplace, pet food is the second largest consumer packaged goods category, proving a vested consumer interest in pet consumption and potential innovation within this group.
Company and Competitors
The Farmers Dog specializes in delivering fresh food for dog owners in the direct-to-consumer market. The two main competitors in this space are Nom Nom and Ollie. The main attributes of these brands are fresh whole food ingredients prepared with the necessary nutrients without the use of fillers or antinutrients and chemicals. The food can be accommodated by preference, delivered fresh, and can be set up on a subscription for ease of memory and accommodating customer experience. These services tend to encourage bettering animal health and address sensitivity issues. The following are the specialized.
The Farmers Dog
• Recipes created by board-certified veterinary nutritionists
• Meal plans are all grain-free and customized to each dog’s unique qualities, health goals, and lifestyle
• Meals are human-grade, slow-cooked in USDA-approved kitchens, and flash-frozen (flash-freezing is a process where fresh foods are frozen faster at lower temperatures to better preserve nutrients and prevent ice crystals from forming)
• Adjustable flavors and quantity of packs in each shipment
• Eco-friendly packaging
• Thin, pre-portioned packages fit well in the freezer
• Can cancel, pause, or change subscription at any time
• Made in the US
Nom Nom
• Recipes created by board-certified veterinary nutritionists
• Full money-back guarantee if no difference in pet after 30 days
• Sample variety pack available without subscription
• Boxes, meal packs, and insulating liners are all either recyclable or made from recycled materials
• Vacuum-sealed, single-meal portion packaging with easy tear-off tops
• Access to pet nutritionists via live chat, phone, and email
• Can cancel, pause, or change subscription at any time
• Made in the US
Ollie
• Recipes developed by veterinary nutritionists
• All meals are human-grade and contain no soy, corn, or wheat
• Meats sourced from family-run farms in the U.S. and Australia
• Comes with a personalized plan to transition dog to new diet
• Food comes frozen and requires thawing in the fridge for 24 hours before use
• Packs aren’t portioned for individual meals, but they include a measuring scoop and a plastic container to store unused food for later use
• Can cancel, pause, or change subscription at any time
• Made in the US
All three brands have much in common, but some notable differences in each brand improve the customer experience. For instance, Nom Nom provides veterinarian expertise, Ollie offers pre-portioned options, and The Farmer’s Dog prepares food in a way that keeps the food very nutritious despite being frozen. The following differentiating factors will ultimately move a similar target audience to a specific purchasing decision. These fresh food options are front-runners within the direct-to-consumer space. However, the leading veterinarian recommenced dry food brands are foods such as Taste of the Wild, Instinct RawBoost Mixers, Orijen, Organix, and Zignature. It is essential to look at dry food options as they are still the leading way most of the world feeds its animals.
Target Audience
The largest group of pet owners in the United States are millennials, and 40% of the population say they treat their pets like children (Yoyofu Media, 2022). The target audience that The Farmer’s Dog is most geared to is the health-conscious consumer category. “Significantly for this budget-minded generation, they are more likely to say they buy the highest quality pet food available than the cheapest available — and almost one in five say they have gone without something to make a purchase for their pet instead” (Yoyofu Media, 2022). Based on research performed by YPulse, the chart below encompasses the thoughts of people aged 16–34. This chart shows how this audience perceives the role of caretaker for their animals and the importance of said duties as pet owners.
Go-To-Market Strategies
The Farmers Dog has a tremendous marketing strategy has led the brand to double in size each year (Yoyofu Media, 2022). The main point that The Farmer’s Dog emphasizes is the number of people who treat their dogs as human family members.
“Commercial dog foods in pet stores advertise their products by what is pictured on the bags or cans. Many companies use label tricks to convince consumers that the products on the bags are what is in the food they are selling. But often, the labels do not contain all the ingredients in the dog food or even include extra ingredients that the food does not contain. Did you know dog foods are allowed diseased meats if cooked at high heat?” (Yoyofu Media, 2022). The messaging of The Farmers Dog echoes the reality around the traditional dry food facilities and manufacturing processes behind these brands. The success and testimonials of satisfied customers and word of mouth between consumers are essential for The Farmers Dog’s success.
Another marketing strategy is the brand’s initial discount opportunity, as it is very atypical. Depending on the time of year, The Farms Dog offers up to 100% off the first purchase, which has proved to be the best way to retain customers. The Farmer’s Dog is very confident in the products as consumers will remain fans as they see their animals benefit from the products. The brand also engages closely with the customer cohort, as shown below. This is a part of The Farmer’s Market’s social media strategy as it likes to show its dedication to the customer, which is a great way to establish trust from the consumer.
Customer Lifetime Value Analysis
The Farmers Dog’s business model encompasses the importance of establishing CLTV as it transcends the CLTV rates in most other industries. “The annual subscription gross profit of a customer of The Farmer’s Dog is in the hundreds of dollars. While the company deserves an A grade at the Series A, the gross profit has increased substantially since the initial investment, particularly given improvements in product gross margins that have come through the economics of scale and warrant an A+ grade today” (Trivedi, 2020). The annual revenue is currently $77.2M per year and has received over $100M in funding since inception (Growjo, 2022). Regarding metrics, the website visit rate growth rate is about 12.72% per month, or 2,410,047 visits per month (Growjo, 2022). Based on the public information, the CLTV outlook is solid as the brand has an excellent reputation and a positive financial outlook.
Recommendations and Conclusion
The Farmers Market is the most affordable version of whole fresh food subscription services based on the market and competition. Due to the success thus far, it is wise to continue at this price point, as The Farmer’s Dog is often the most suitable option for budget-conscious consumers. Another consideration is the customers transitioning dogs from dry to natural food. For this type of consumer, the price change is significant; as a result, it is wise for The Farmer’s Dog to keep the price the same. Farmer’s Dog should strengthen its brand voice on social media and continue to promote real stories and health transformations. Following through with customer feedback on brand changes is also essential, as it will only strengthen the brand’s likeness. Reasonable changes to create a new packaging option, as many customers complain about this. Another consideration is to permit consumers to preview price estimates. The current strategy forces onlookers to input email information to estimate cost. There may be a less intrusive way to do this, as it is a bit of a hassle for potential clients.
In conclusion, The Farmer’s Dog has a significant presence in the pet industry and is a leader within the fresh dog food category. This analysis shows that the brand performs significantly and does a fantastic job at retaining its customers.
References
Growjo. (2022). The farmer’s dog revenue and competitors. The Farmer’s Dog: Revenue, Competitors, Alternatives. https://growjo.com/company/The_Farmer%27s_Dog
Jones, S. (2022, September). Best Fresh Dog Food Delivery: The farmers dog vs Ollie vs Nom Nom vs Petplate vs Freshpet & more. Canine Journal. https://www.caninejournal.com/best-fresh-dog-food/
Migala, J. (2022, August). The best food for dogs, according to experts and Veterinarians. NBCNews.com. https://www.nbcnews.com/select/shopping/best-dog-food-ncna1189551
Roberts, R. (2022, June). Pet industry trends, Growth & Statistics in 2022 and Beyond: Unleashing your ecommerce pet marketing strategies. Common Thread Collective. https://commonthreadco.com/blogs/coachs-corner/pet-industry-trends-growth-ecommerce-marketing
Trivedi, N. B. (2020, October 7). The farmer’s dog: A consumer subscription case study. The Farmer’s Dog: A Consumer Subscription Case Study. https://nbt.substack.com/p/the-farmers-dog-a-consumer-subscription
YoYoFuMedia. The Farmer’s dog marketing strategy — how the company doubles in size each year 2022. YoYoFuMedia. (2022, September). https://yoyofumedia.com/the-farmers-dog-marketing-strategy/
