Premiumization Will Drive Pet Market to $6 billion

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Packaged Facts recently published the fifth edition of the “Natural, Organic and Eco-Friendly Pet Products in the U.S.” report that states premiumization has been driving much of the pet market growth and has emerged as an essential aspect of the natural pet products segment.

The report estimates U.S. retail sales of natural pet products are on track to exceed $7 billion in 2014, reflecting a 2010-2014 compound annual growth rate of 15 percent. Natural pet food will account for the vast majority of sales and is expected to reach $6.6 billion by the end of the year, with natural pet care products comprising the remainder.

According to the report, marketers have been driving dollar gains by converting pet owners to higher priced products. Thus, absent any other galvanizing factors toward increased pet ownership, ongoing premiumization is crucial if pet market dollar sales are to continue to rise in the short term.

“As a result it’s no wonder pet product makers and retailers are drawn to the super premium edge of the business,” said David Sprinkle, Packaged Facts research director.

Also according to the report, “premiumization pressure” is a potent driver toward increased sales of natural and organic products since in the pet market, “premium”, especially “superpremium,” increasingly means “natural.”  Although not all superpremium products are natural, more and more of them are, with natural products at the core of the premiumization trend, especially in regards to pet food. The flip side of this trend is that offering a “natural” product is no longer enough to attract consumer attention. Marketers must find additional product features to entice purchasers and justify the heightened price tag.

According to the report, to meet consumer demand and justify the higher prices of premium products, virtually all pet product marketers are focusing more intensively on pet health. Many consumers increasingly view natural and organic products as being healthier. Pet owners are willing to spend more if they believe that the products offer health and wellness benefits.

According to Packaged Facts’ April/May 2014 survey results, 64 percent of pet owners believe that high quality pet foods are effective for preventive health care and 68 percent are willing to spend extra money to ensure the wellness of their pets. Pet owners want to make sure that the products they are purchasing are fulfilling their pets’ needs, both overall and in specific ways.

The Packaged Facts survey also revealed that 62 percent of pet owners check product labels on the pet foods they buy and 42 percent are concerned about their pet having food intolerances or allergies.