• by Steve Ellwanger , March 2, 2023

Having solved production and supply issues that prompted a dark fourth quarter advertising-wise, Freshpet is ramping up spending to reaccelerate household penetration of its refrigerated dog foods.

“Our in-stock position is now at prepandemic levels for the first time and improving by the day,” Freshpet Inc. Billy Cyr said on a Q4 earnings call last week.

The company plans to increase media spending by 25% over 2022—with 60% of the spend planned for the first half of this year.

“We expect this to reaccelerate our household penetration gains, taking them from the 16% we had in 2022 to the low to mid-20s by the end of 2023.”

According to data from Numerator, as of Jan. 22 Freshpet was in 9.8 million homes. In channels tracked by Nielsen, the company holds 5.8% of the U.S. dog food market.

Founded in 2006, Freshpet had a presence in 18,004 stores in 2018 and is now in 25,281.

This year’s growth plans include expanding the cubic feet of its branded, in-store refrigerators from 1.5 million in 2022 to more than 1.7 million by year’s end.

That would represent approximately 1,200 net new stores, the addition of 3,000 second and third fridges and fridge upgrades in approximately 1,000 stores.

“We believe this will amplify our advertising investment, providing added visibility that reinforces our brand's distinctive offering,” Cyr said.

Having resumed advertising in January, Freshpet’s most recent spot correlates “healthy meals” with “happy dogs” (see image above).

Asked by Oppenheimer analyst Rupesh Parikh about the impact of competitors’ stepping up their advertising—citing a Super Bowl commercial for The Farmer’s Dog—Cyr acknowledged “a lot of chatter” in the market.

“So as there's more advertising in the category, I think it brings awareness, I think it brings visibility, I think it can be helpful for us, and we do know that our advertising delivers very, very well.”

Freshpet posted 43% net sales growth in Q4 to $165.5 million and a full-year increase of 40% to $595.3 million.

The company had a net loss of $59.5 million last year, up from $29.7 million in 2021.