Caloric penetration is a key metric for the pet food business that is often misunderstood or biased, leading to inaccurate demand forecasts and, eventually, to misallocation of production and commercial resources.
The caloric penetration rate is the percentage of commercial pet food over the total food consumption of a pet—how much of the pet’s diet is comprised of commercial dog or cat food.
It is worth noting that a wide portion of pet owners feed their dogs and cats only with pet food, meaning the individual caloric penetration rate is 100%. Contrarily, numerous pet owners in some markets only feed their pets with homemade preparations or table scraps. In this extreme case, caloric penetration for pet food is 0%.
This information suggests that caloric penetration is an unknown variable that follows a statistical distribution taking values from 0% to 100%. In a market with a pet population of, say, 1 million pets, the caloric penetration rate will have the same number of values, one for each pet.
As it is impossible to know the caloric penetration of every pet, an alternative is estimating a consolidated metric with one of two approaches. The first is to use other variables that may approximate caloric penetration, or secondly, to sample the pet population to obtain an unbiased estimate of the average caloric penetration that represents that of the whole population.
Caloric penetration metrics require robust estimation
The dog population by breed and the total dog food volume sales are the variables that can help