Amazon Unleashes Pet Food to Disrupt Another Industry

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  • 58% of black pet owners have dogs
  • U.S. pet owners will spend about $30 billion on pet food in 2018

Amazon’s (AMZN +1.21%) mission to upend another industry has hit the pet market with the launch of Wag, its own line of pet products. If there’s one industry in which money can be made, it’s pet food and supplies where owners are projected to spend $72 billion this year. Is this new move going to implore the black community to buy more pet food?

Why This Matters: Even though pet ownership in the African American community is the lowest amongst minority groups, dogs seem to be the most popular. Amazon’s Wag brand debuted with dry dog food which is a difficult item to sell online because it’s heavy and expensive to ship. The company hopes frequent pet owner purchases keep the online marketplace top of mind during buying decisions. A 2017 survey by Branded Research found 58% of black pet owners have dogs and are willing to pay $50 or less for pet food, which could make Wag dog food an attractive option. Plus if you add the benefit of two-day shipping through Amazon Prime the company could become a reliable source for all pet supplies.

Amazon’s main play here is to pressure big box retail competitors like Petco, PetSmart, and Walmart (WMT -2.35%) that have dominated the pet supplies industry. U.S. pet owners will spend about $30 billion on pet food, according to the American Pet Products Association. The e-commerce giant already reportedly made about $2 million last year off of its AmazonBasics branded pet carriers.

What’s Next: Don’t be surprised if Wag shows up in Whole Foods sometime in the near future as well. The Amazon-owned grocery store already carries its own line of pet food, Tender and True, and pet food is a staple for grocery stores.

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