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December 27, 2017

In 2017, pet food sales topped $26 billion. This according to market research firm Packaged Facts’s new report, “Pet Food in the U.S., 13th Edition.” That’s an increase of almost 6 percent, the firm says, and Packahed Facts said we can expect to continue to see annual growth through 2022.

There are several key factors to which we can attribute this drive, including some of the same millennial- and ecommerce-related trends that are bolstering so many other segments of the U.S. retail economy.

“Much of the growth in the pet food market can be attributed to the rapid acceleration of online sales, particularly with behemoths Amazon and Chewy.com. Internet sales of pet products are outpacing and even stealing sales from other channels, notably pet super stores. Not to mention the emergence of millennials as prominent pet market consumers,” said David Sprinkle, research director for Packaged Facts. “But there are other, perhaps even at times under the radar, developments that are driving pet food growth.”

Here are five other trends Packaged Facts expects will influence the U.S. pet food industry in 2018 and beyond:

Home-delivered pet food: Several recent endeavors have aimed to deliver dog food to their owners’ front doors. Selling points for these services include customized offerings, fresh food, convenience and home-made quality. Examples include PetPlate, The Farmer’s Dog, JustFoodForDogs, Ollie and Just Right by Purina. To date, home delivery of pet food (whether customized or non-customized orders) has increased to nearly 1/5 of pet owners.

Pet parents seeking foods with preventative benefits: Reflecting trends in the human sphere, more owners are interested in preventive health care for their pets. And as Pet Age reported, pet food can be a factor in that preventative health regimen. In the Packaged Facts February/March 2017 National Pet Owner Survey, more dog and cat owners (76 percent and 71 percent, respectively) than in previous years of the survey agree with the statement, “High-quality dog foods/cat foods are effective for preventive health care.”

Micro-targeted and functional pet foods: Fitting hand-in-hand to the increase in preventative diets, pet food marketers are now serving specialized target consumers with specific nutritional needs. These sub-groups include age, breed, size/weight, activity level, indoor vs. active, type of fur, as well as allergies and other chronic health conditions. Echoing trends in human foods, specialized pet foods offer whole food and/or nutraceutical ingredients, such as probiotics, omega fatty acids, glucosamine, fruits and vegetables. Micro-targeted and functional pet foods will keep growing at an above-average clip during in the near-term, Packaged Facts forecasts.

DIY pet food: Pet parents often supplement pet’s meals with additional homemade side dishes, such as grilled meat, home-cooked pumpkin or other favorite indulgences. Other pet owners pursue a “semi-homemade” approach by enhancing the pet’s meal with various additions, such as mix-ins, toppers, sauces and even spray-on nutrients. Pet food makers are addressing this behavior by offering products that can be personalized or used in combination with other products. The raw and dehydrated pet food segment generally involves some preparation and therefore opens the door to further customization by the pet owner.

New directions for proteins and other ingredients: Just as pet owners seek proteins for themselves, they also seek them out for their pets. Innovation around protein is considerable as pet food producers launch new products to meet consumer interest in protein, including varieties of single-proteins, proteins as the first ingredient, multiple proteins, and exotic proteins. This trend is linked also to the rising popularity of ancestral formulations that aim to recreate the diet of dogs and cats when they lived in the wild prior to domestication. The ancestral niche can be viewed as the point of the spear in developing the market for high-quality protein ingredients for pet food. Many companies fully embraced ancestral/wilderness imagery while others have focused on the high protein aspect of the equation without the ancestral/wild animal positioning. The ancestral products have also stoked interest in raw and whole prey pet food, both relating to the wild animal diet.

Yet pet owners are interested in more than just animal-based proteins. Many believe that vegetables and grains are important for their pets’ diets. According to the Packaged Facts September/October 2017 National Pet Owner Survey, 68 percent of pet owners say vegetables can be good ingredients, with 48 percent saying the same about brown rice.

Packaged Facts’ market estimate for the overall pet food market includes dog and cat food, but does not include non-dog/cat food, dog/cat treats and non-food pet supplies—including chews (natural, rawhide, nylon), and supplements.

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