Pet Food Market – Trends, Industry Competitiveness and Future Outlook

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pet food market

The pet food market was worth $74.9 billion in 2016. North America accounted for the largest share of the global market with over 35% in 2016. The second largest market is Europe, followed by Asia Pacific, accounting for about 20% market share share, thus accelerating the trend of pet owners worldwide. In North America, the U.S. holds the major market share for pets and pet owners and is expected to register a high CAGR during the period 2017-2022 (forecast period).

Savor new experiences and cuisines as an alibi for indulgence

Flavors and textures become bolder, more complex, more authentic and more specific. The relevance of pet food to modern forms of mixing freeze-dried crumbs with kibble or treats to change texture is driving pet owners to choose from a variety of shapes, textures and flavors. Additionally, clean label continues to grow. Health-conscious consumers seek indulgences, such as snacks in smaller portions or candy with healthier ingredients like chia seeds or yogurt. In terms of ingredients with functional or other nutritional value, pet treats are being developed that allow pet owners to indulge their pets guilt-free. 80% of global launches in 2015 were new dog food products. Products launched between September 2015 and September 2016 maintained the health-related trend in new product categories. The global cat food share is about 68%. This health trend is generating good sales for manufacturers. A few examples of this are Hill’s Ideal Balance, a new dog and cat food that combines natural ingredients with Hill’s perfectly balanced nutrition, now available in South Africa. CORE® RawRev is a new high protein grain free product from Wellness CORE®, a grain free natural animal nutrition company.

Improvement in distribution network leads to growth in pet food sales

High-speed internet connections available in major countries are boosting the use of e-commerce websites as an effective distribution channel. The concepts of convenience, affluence or exclusivity, security and market awareness play a very important role in developing countries. As recent scandals have shown, the unreliability of local goods also creates dependence on foreign goods. These are easily available through e-commerce, further increasing sales. E-commerce channels are exploding with sales of pet products thanks to two pet supermarkets in the industry, PetSmart and Petco. Secondary markets such as Vietnam, Thailand and other small economies have been late to embrace market connectivity, which is the reason for infrastructure lag and negligible product awareness. These stores offer an emerging market advantage of low regulation and competition. The companies are negotiating with the changing internet landscape as e-commerce intensifies, dealing with giants such as Amazon, which can sell through similar e-commerce sites and mergers and acquisitions. For example, in April 2017, PetSmart announced that it would acquire, adding to the panic among independent pet retailers. In response, independent and family-owned manufacturer Tuffy’s Pet Food announced it was withdrawing its products from Chewy, as it would be owned by the largest pet store chain in the United States. While the response from Tuffy’s has been overwhelmingly positive, not every company has an easy breakaway from any of the big e-commerce sites.


“Freedom” and “liberal effect” complement each other

Although consumers today are part-time vegetarians, they seem to be the opposite when it comes to pet food. Pet owners look for dietary options that focus on the carnivorous nature of dogs and cats, thus driving the number of products with high fresh meat claims. Despite the demand for carnivorous diets, vegetables remain mainstream and producers are innovating their existing products. All “Free” – The free trend has grown over the past few years and is now mainstream. Pet food is formulated with human concerns in mind and includes organic and non-GMO ingredients. These ingredients are used in low-carb recipes and claims that new grain products are gluten-free, an increase from one-fifth in 2011 to one-fifth in 2016. New product launches employing organic or non-GMO ingredients have witnessed market growth. Sales of organic and natural foods are expected to grow by 14.6% annually over the next two years. For Petco and PetSmart, organic pet food was purchased by 7.1% and 5.6%, respectively, and organic food was purchased by 5.3% at veterinary clinics. Brands are more The production process is communicated. This is also true for buyers, especially those seeking products in non-traditional forms such as raw, freeze-dried, frozen and baked. Global health and nutrition company Balchem ​​Corp. has launched a new line of specialty nutrients and unique processing additives. After two years of continuous research and development, the Omega Plus range was launched in the South Island in September 2016. In addition, Bob Martin has launched Simply+, a line of products that “give dogs all the essentials for a healthy diet” with “nutritionally advanced foods.”

Cross-border zone helps meet buoyant demand

China’s domestic market is growing at an annual rate of more than 30%, and is expected to accelerate at the same rate in 2022, reaching 150 billion yuan or more, making it the third largest market in the world. In addition, the first cross-border pet industry pilot zone in Jianggan District, Hangzhou City, Zhejiang Province was completed. The pilot zone will pilot the reform of cross-border import supervision and approval. Explore the introduction of national standards in the industry to promote the export of domestic products. In addition, more than 35 cross-border e-commerce and related logistics and warehousing companies such as Tmall and Koala Beibei have settled in the pilot zone. The zone basically realizes one-stop service, aiming to introduce open, transparent and intelligent pet food import channels and regulatory policies. Countries are taking similar efforts to focus on growing pet numbers and trends. Market players are taking full advantage of the situation and investing in research and development to launch innovative products.

Notable Market Developments

1. Nestlé Purina opened a new production hall at its factory in Bük, northwest Hungary, making it the largest production center in Europe, and opened an $86 million factory in Brazil. The move is expected to propel Nestle Purina to greater growth in the domestic market.
2. Carna4: A recipe inspired by the health food trend. The manufacturer draws inspiration from the world of human health foods to create innovative whole food recipes for dogs and cats.
3. PetLife acquires Dr. Jeff’s Real Pet Food. PetLife Pharmaceuticals, Inc., a developer of a new generation of highly effective veterinary anticancer drugs and pet nutrition, announced that it will acquire Dr. PetLife Pharmaceuticals, Inc. Geoff’s Real Food for Pets™ and national rollout program.
4. German companies enter Thailand. Germany-based cat and dog food company Interquell entered the Thai industry through a joint venture, Happy Pet (Thailand) Co Ltd, with partner Technic Pet Holding, Pets International reported. Interquell holds a 49% stake in the joint venture. Interquell carries the premium brands Happy Dog and Happy Cat.

Topics covered in the report

How will face-to-face interaction drive the pet food market in the digital age?
Is low thiamine cat food the cause of death in Australian cats?
Gluten-free, genetically modified foods are making their mark in the pet food industry.
Edible insects are becoming increasingly popular as pet food.
The humanization and high-end of the pet industry has reached its peak.
Will the US and China continue to dominate the pet food market? What are Emerging Markets?
Market connectivity in Asian countries such as Vietnam and Thailand will continue to increase. Boosting the Asia-Pacific pet food market?

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