Buttnernut Box Raises Over $350 Million Amid Pet Care’s D2C Shift

With consumers disproportionately turning to eCommerce channels to get their pet supplies — and willing to pay a premium to do so — Butternut Box is bringing in funding by the hundreds of millions.

The United Kingdom-based direct-to-consumer (D2C) brand, which sells dog food subscriptions, announced Monday (Sep. 4) that it raised $280 million British pounds (more than $350 million) in its latest funding round, with participation from investment firms General Atlantic and existing investor L Catterton.

Howard Steyn, a partner at L Catterton, hinted in a statement that the company, which currently operates in several European countries, may continue to expand internationally.

“While we have long had conviction in the U.K. Fresh category after investing behind this concept in the U.S., we’ve been particularly impressed by how Butternut Box continues to innovate and deliver such compelling value to its customers,” Steyn said. “We look forward to leveraging our global experience in the pet category to support the brand’s next phase of growth.”

In the United States, at least, consumers are turning to digital channels to get their pet food more so than they are for other day-to-day needs. PYMNTS Intelligence from the report “Changes in Grocery Shopping Habits and Perception” revealed that 27% of consumers who buy pet supplies primarily do so in physical stores, while 55% exclusively do so via digital channels. This share is higher than the cross-grocery-category average of 37% who exclusively use digital channels.

Additionally, consumers prove willing to shell out for the extra cost of premium products for their pets in ways that they may not be willing to do for themselves or their human family members.

Specifically, intelligence from PYMNTS’ study “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down” revealed that 47% of all shoppers have switched to a less expensive merchant for at least one grocery product. Yet 19% of grocery shoppers have switched to less expensive merchants for pet food and supplies, a smaller portion than said the same for snacks, dairy products and produce.

While the demand may be strong, there is also significant competition in the category, with many players looking to capitalize on consumers’ desire to pamper their pets. For instance, meal kit company HelloFresh announced last month that it launched a new dog food subscription, The Pets Table, promising human-grade meals.

Plus, pet retailer Petco announced last month that it is partnering with dog nutrition brand Ollie to similarly offer human-grade dog food, bringing a service previously only available to D2C subscribers to the company’s stores.

“As the relationship between people and their pets continues to evolve, we are constantly focused on customer feedback, understanding trends, understanding what consumers are looking for, and really staying forward in terms of innovation and design and features,” Petco Senior Vice President of Omnichannel Experience Jenny Wolski told PYMNTS’ Karen Webster in an interview in December.