Pet Food in the U.S.: Other Pet Food: Health, Humanization and High Quality Ingredients in an Increasingly Value-Driven Global Market

Published by: Packaged Facts

Published: Jan. 1, 2009 - 352 Pages

Table of Contents

Chapter 1: Executive Summary

Scope of Report

Report Methodology

Global Market Perspective

Value of Pet Food Retail Sales

Figure 1-1: Global Retail Sales of Pet Food: 2004, 2008 and 2013 (in billions of dollars)

Trends by World Region

Marketer Shares and Shifts

Market Size and Growth

U.S. Pet Food Sales Near $17.0 Billion in 2008

2008 Mass-Market Dollar Sales of Pet Food Up, But Volume Sales Down

Dog Food Three-Fifths of the Market

Market Share by Retail Channel

Market to Approach $19 Billion by 2013

Looking Ahead

Competitive Overview

Top Five Players Control Four-Fifths of the Market

Figure 1-2: Top Five U.S. Marketers of Pet Food: 2006 vs. 2008 (percent)

Four Companies Dominate Mass-Market Sales

Pet Specialty Channel More Fragmented

Mega Marketers Tap In to Natural Segment

Multinational Powerhouse Cargill Taps Into Feed/Seed Channel

Private Label Pet Food Has Room to Grow in the U.S.

Pet Food Producers Position on Safety

Marketing and New Product Trends

Pet Market Advertising at $520 Million in 2007

Marketers Embracing Non-Traditional Media

Advertising Positioned on a Few Major Themes

Celebrities Kick In

2008 a Record Year for New Pet Food Products

Product Premiumization: Natural, Upscale and Functional Appeals

Retail and Consumer Trends

Economic Concerns and Increased Competition

Over 60 Million Households Own Pets

Dog/Cat Ownership Rates Edge Up

Minorities Over-Index for Semi-Moist and Canned Products

Canned Food Is Stronger in Cat Arena

Chapter 2: Market Overview

Introduction

Scope of Report: Three Main Categories

Terminology

Exclusions

Other Marketing Classifications

Global Pet Food Market Perspective

Value of Pet Food Retail Sales

Figure 2-1: Global Retail Sales of Pet Food: 2004, 2008 and 2013 (in billions of dollars)

Market Share and Trends by Region

Figure 2-2: Share of Global Pet Food Sales by Region: 2008 (percent)

Marketer Shares and Shifts

Figure 2-3: Pet Food Global Market Leaders: 2008 (percent)

Trends in New Product Introductions

Figure 2-4: Number of Global Pet Food New Product Launches: Reports and SKUs, 2002-2008

Figure 2-5: Share of Global Pet Food New Product Launches by Region: 2000, 2004 and 2008 (percent)

Top Marketing Claims Involve Natural, Functional Appeals

Figure 2-6: Top 20 Package Tags/Marketing Claims: By Number of Global Pet Food New Product Launches, 2008

Global Market Outlook

Table 2-1: Top Global Pet Food Industry Forecast Factors: 2007 (percent)

Table 2-2: Top Global Pet Food Industry Forecast Trends: 2007 (percent)

U.S. Pet Food Exports Up 15%

Canada, Japan Are Top Export Markets for U.S. Pet Foods

Table 2-3: U.S. Exports of Dog & Cat Foods by Leading Country Markets: 2003-2007 (in thousands of dollars)

Table 2-4: U.S. Exports of Dog & Cat Foods by Leading Country Markets: January-September 2007 vs. January-September 2008 (in thousands of dollars)

Figure 2-7: Top National Destinations for U.S. Exports of Dog & Cat Foods: January-September 2008 (percent)

Table 2-5: U.S. Exports of Dog & Cat Foods by Regional Markets: 2003-2007 (in thousands of dollars)

Table 2-6: U.S. Exports of Dog & Cat Foods by Regional Markets: January-September 2007 vs. January-September 2008 (in thousands of dollars)

Table 2-7: Export Concentration Ratios for U.S. Exports of Dog & Cat Foods by Top, Top 4 and Top 8 Markets: 2003-September 2008 (% of total dollar value)

European Union Down as Export Destination

Figure 2-8: Share of Total U.S. Exports of Dog & Cat Foods by Top Destination Markets: Canada, Japan and the European Union, 1996 vs. 2008 (% of total dollar value)

Mars Targets Export Growth Markets in Africa

Figure 2-9: Percent of Survey Respondents Ranking Import/Export Trends as “Very Important” to Development of Pet Food Industry: By Global Region

Rising Costs, Down Economy Shape Market Environment

Market Size and Growth

Pet Food Sales Near $17.0 Billion in 2008

Table 2-8: U.S. Retail Sales of Pet Food: 2004-2008 (in millions of dollars)

2008 Mass-Market Dollar Sales of Pet Food Up, But Volume Sales Down

Table 2-9: IRI-Tracked Dollar, Pound and Unit Sales of Pet Food: 2008 vs. 2007 (in millions of dollars, pound and unit sales)

A Gradual Improvement from 2003 to 2007

Figure 2-10: IRI-Tracked Sales of Pet Food: 2003-2008 (in millions of dollars)

Dog Food Delivers the Most Dollar Growth

Table 2-10: IRI-Tracked Sales of Pet Food: By Category, 2003- 2008 (in millions of dollars)

Table 2-11: Annual Growth/Decline in IRI-Tracked Sales of Pet Food: By Category, 2004-2008 (percent)

Table 2-12: Total Growth/Decline in IRI-Tracked Sales of Pet Food: By Category, 2003-2007 (in millions of dollars)

Table 2-13: Total Growth/Decline in IRI-Tracked Sales of Pet Food: By Segment, 2003-2007 (in millions of dollars)

Market Composition

Dog Food Three-Fifths of the Market

Figure 2-11: Share of IRI-Tracked Sales of Pet Food by Category: 2001, 2003, 2005, 2007 and 2008 (percent)

Figure 2-12: Share of Pet Food Sales in Natural Supermarkets: By Type, 2008 (percent)

Dry Food Increasing in Market Share

Figure 2-13: Share of IRI-Tracked Sales of Dog and Cat Food by Form: 2003, 2005, 2007 and 2008 (percent)

Table 2-14: Share of IRI-Tracked Sales of Pet Food by Form: 2003, 2005 and 2007 (percent)

Alternative Pet Food Share of Sales

Independent Pet Stores: Share of Sales by Animal Type

Table 2-15: Alternative Pet Food Segment Performance Relative to Total U.S. Pet Food Market: 2003-2007 (percent, growth rate)

Table 2-16: Share of Independent Pet Store Pet Supply Sales by Animal Type: 2005-2007 (percent)

Table 2-17: Pet Food and Treats Share of Category Sales by Animal Type in Independent Pet Stores: 2006 vs. 2007 (percent)

Dog Food Is Top Category in Pet Specialty Stores

Table 2-18: Share of Pet Specialty Retailer Sales by Category: 2006 vs. 2007 (percent)

Market Share by Retail Channel

Figure 2-14: Share of U.S. Pet Food Sales by Retail Outlet Type: 2008 (percent)

Household Purchasing of Pet Supplies by Retail Outlet Type

Table 2-19: Household Purchasing of Pet Products by Retail Channel: Total Purchasers and Sole Purchasers, 2006 vs. 2008 (percent of U.S. households with pets)

Figure 2-15: Degree of Channel Loyalty Among Purchasers of Pet Supplies by Outlet Type: 2008 (percent of U.S. households with pets)

Chain Merchandising Trends in the Mass Market

Dry Dog Food the Most Heavily Merchandised

Ephemeral vs. Incremental Merchandising Gains

Price Discounting in Chains Is Steepest for Cat Food

Table 2-20: IRI-Tracked Retailer Merchandising Trends for Pet Food: By Category and Segment 4th Quarter 2006 through 3rd Quarter 2008 (percent of sales volume)

Table 2-21: IRI-Tracked Promotion of Dog, Cat and Other Pet Food: Ratio of Average Promoted Price to Average Overall Price, 2003 - Third Quarter 2008 (percent)

Market Outlook

All Eyes on the Economy

Figure 2-16: U.S. Grocery Industry Sales Growth: 2001-2007 (percent)

Table 2-22: Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy: April 2003-April 2008 (U.S. adults)

Table 2-23: Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Month Over Month: October 2007-April 2008 (U.S. adults)

Pet Market Impact

Pet Food Prices, Costs at Record Highs

Figure 2-17: Consumer Price Index for Pet Food: 1998-2008

Figure 2-18: Producer Price Index for Pet Food: 1998-2008

Impact of Spring 2007 Pet Food Recalls

Figure 2-19: Effect of Pet Food Recall on Pet Food Sales in Pet Specialty Stores: May 2007 (percent)

Figure 2-20: Effect of Pet Food Recall on Pet Specialty Retailer Pet Food Selection: January 2008 (percent)

Figure 2-21: Seasonal Pattern of Pet Food Sales in the Natural Supermarket Channel: January 2005-December 2007

Product Premiumization and Premium Demographics

Table 2-24: IRI-Tracked Volume Sales of Pet Food by Category and Segment: 2003 - Third Quarter 2008 (in millions of volume units)

Table 2-25: Average U.S. Household Expenditures on Pet Food: 1997-2007 (in dollars)

Figure 2-22: Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Brackets, 1997-2007 (percent)

Figure 2-23: Number of New Pet Food Product Introductions: 2001, 2004 and 2008

Natural/Organic Pet Food Going Strong

Figure 2-24: U.S. Retail Sales of Natural Pet Food: 2003, 2007 and 2012 (in millions of dollars)

Pet Humanization a Potent Force

Table 2-26: Mean Number of Veterinary Visits by Human-Animal Bond Among Dog and Cat Households: 2006

Table 2-27: Mean Veterinary Expenditures by Human-Animal Bond Among Dog and Cat Households: 2006 (in dollars)

Enhancing Pet Health

Aging Pet Population Underpins Healthcare Boom

Figure 2-25: Percentage of Dogs and Cats Age 6 and Over: 1996 vs. 2006 (percent)

Number of Dog and Cat Households on the Ups

Figure 2-26: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications: 2003 vs. 2008 (percent of U.S. dogor cat-owning households)

The Boomer Factor

Table 2-28: Dog and Cat Ownership by Adult Age Bracket: 2008 (number, percent and index of U.S. households)

Figure 2-27: Dog or Cat Ownership Rates by Age Bracket: 2003 vs. 2008 (percent of U.S. households)

Figure 2-28: Share of Total U.S. Population Growth for Selected Age Brackets: 2007-2015 (percent)

Dual-Adult/No-Kid Clout

Figure 2-29: Two-Adult Households/No Kids as Pet Owners: 2003 vs. 2008 (percent)

Celebrities Back Up and Coming Pet Food Lines

Looking Ahead

The New Value Equation

Figure 2-30: Share of Total U.S. Pet Market Expenditures: $70K+ vs. Under $70K Income Brackets: 1997-2007 (percent)

Market to Approach $19 Billion by 2013

Table 2-29: Projected U.S. Retail Sales of Pet Food: 2008-2013 (in millions of dollars)

Additional Market Consolidation

Product Innovation

Competitive Overview

Acquisitions Intensify Market Consolidation

Table 2-30: Timeline of U.S. Pet Food Market Acquisitions: 2002- 2008

Mars Plus Nutro

Castor & Pollux, Halo Backed by Private Equity Firms

Top Five Players Control Four-Fifths of the Market

Figure 2-31: Top Five U.S. Marketers of Pet Food: 2006 vs. 2008 (percent)

Four Companies Dominate Mass-Market Sales

Figure 2-32: Top Marketers of Pet Food by Share of IRI-Tracked Sales: 2007 vs. 2008 (percent)

Table 2-31: Leading Marketers of Pet Food by Share of IRITracked Sales: 1999-2007 (percent)

Table 2-32: Leading Marketers of Pet Food: Share of IRI-Tracked Sales by Product Segment: 2007 vs. 2008 (percent)

Pet Specialty Channel More Fragmented

Figure 2-33: No. 1 Brand Leaders in Pet Specialty Stores: 2007 (percent)

Professional Channel Marketers

Value and Superpremium Positioned Marketers

Snacks and Treats Specialists, “Springboarding”

Natural/Organic Specialists Exclusive to Specialty, Natural Channels

Brand Leaders in the Natural Supermarket Channel

Figure 2-34: Share of Sales of Pet Products in Natural Supermarkets by Marketer/Brand: 2008 (percent)

Mega Marketers Tap In to Natural Segment

Raw/Frozen and Homemade Pet Food Specialists

Nature’s Variety a Leader in Raw/Frozen Foods

Freshpet Makes Refrigerated Pet Food Splash

Figure 2-35: IRI-Tracked U.S. Sales of Freshpet Refrigerated Pet Food: 2006-2008 (in millions of dollars)

Channel-Specific Marketing

Multinational Powerhouse Cargill Taps Into Feed/Seed Channel

Crossing Pet Market Lines

Table 2-33: The U.S. Pet Food Market: Selected Leading Marketers and Brands, 2008

Focus on Private Label

Room to Grow

Table 2-34: Number of U.S. Private-Label Pet Food Product Introductions and SKUs: By Category, 2000-2008

Evanger’s and Eagle Pack Report Recall-Related Gains

Store-Brand Share Stabilizes at Mass-Market Level Following Steady Declines

Table 2-35: Private-Label Share of IRI-Tracked Sales of Pet Food: By Product Category and Segment, 1999-2007 (percent)

Mars Plus Doane

Whole Foods and Traders Joe’s Big on Private Label

PetSmart and Petco Heavily Invested in Store Brands

Figure 2-36: National Consumer Advertising Spending for PetSmart and Petco: 2006 and 2007 (in millions of dollars)

Table 2-36: PetSmart and Petco Pet Food and Treat Private-Label Brands: By Trademark Name, Usage and Filing Date

Independent Pet Stores Also Making a Bid

Table 2-37: Purchasing Patterns for Selected Types of Store- Brand Dog and Cat Food: By Retail Channel Shopped, 2008 (percent)

The Global Private-Label Pet Food Picture

The Future of Private Label

Focus on Pet Food Recalls and Product Safety

Competitive Impact of Spring 2007 Pet Food Recalls

Menu Foods Blindsided But on the Mend

Lawsuits Consolidated, Settled

Procter & Gamble’s Iams Unit Loses Sales and Share

Mars Fares Well, Snaps up Nutro and Menu Foods Plant

Pet Food Commission Releases Safety Recommendations

Congress Passes Food and Drug Administration Amendments Act of 2007

New Regulations Also Possible at the State Level

New Requirements for Chinese Imports

Pet Food Producers Position on Safety

The New Food Safety Buzzword: Traceability

Product Safety Still Under Consumer, Government Spotlight

Consumer Website Accuses Nutro of Fielding Unsafe Foods

FDA Targets Evanger’s Plant

Petco Distribution Center Raided by FDA

Mars Recalls Reveal Human-Pet Disease Link

Marketing and New Product Trends

Pet Market Advertising at $520 Million in 2007

Figure 2-37: Media Breakout of National Consumer Advertising for Pet Food and Pet Care Products: 2007 (percent)

Marketers Embracing Non-Traditional Media

Online Marketing and Blogs

Pet Food “SuperBrands”

Advertising Positioned on a Few Major Themes

Celebrities Kick In

Ellen Buys into Halo

Cesar Millan Shakes Hands with Castor & Pollux, Petco

Rachael Ray Teams Up with Dad’s Pet Care

Freshpet Launches Loved Dog Treats

Cause-Related Marketing, Public Relations

Going Green

2008 a Record Year for New Pet Food Products

Table 2-38: Number of New Pet Food Product Introductions: 2001-2008

Product Premiumization: Natural, Upscale and Functional Appeals

Natural Products Go Mainstream

Manufacturers Focusing on Fresh Ingredients

New Goodlife Packaging Is Ingredient-Focused

Safety Theme Apparent in Ingredient-Related Product Appeals

Human-Grade Ingredients

100% US-Sourced Ingredients and “China-Free”

Locally Sourced Ingredients

Raw/Frozen Foods

Homemade Pet Food

“Holistic Labeling”

Functional/Fortified Foods Cover All Bases

Special Diet Formulas

Table 2-39: Household Purchasing of Light/Weight Management and Senior Dry and Canned Dog and Cat Food: 2004 vs. 2008 (U.S. households with dogs or cats)

Nutraceutical Treats

Convenience Another Key Premium Appeal

One Route to Cost Cutting: Smaller Package Sizes

Table 2-40: Pet Food Product Selling Points by Package Tags: 2004-2008

Examples of Advertising

Retail Trends

Economic Concerns and Increased Competition

The PetSmart/Petco Dynamic Duo

Table 2-41: PetSmart and Petco Combined Sales: 2000-2007 (in millions of dollars)

Company Profile: PetSmart, Inc.

Table 2-42: PetSmart Sales: 2000-2007 (in millions of dollars)

Slower Expansion an “Economic Precaution”

Services, Expertise Key to Success

Company Profile: Petco

Table 2-43: Petco Annual Sales: 2000-2007 (in millions of dollars)

Changes and Challenges

Promoting Pet Relationships

Cesar Millan and Ellen DeGeneres

P.A.L.S., Petco.com and Petco Park

Zootoo.com and Pet Welfare

Other Top-Ranked Pet Specialty Chains

Independent Pet Stores: Bad News and Good News

Table 2-44: Top Challenges Pet Specialty Retailers Face in Next Two Years: 2006 vs. 2007 (percent)

Table 2-45: Pet Food Share of Category Sales by Animal Type in Independent Pet Stores: 2006 vs. 2007 (percent)

Walmart Bullish on Pet Supplies

Target Also Coming on Strong

Supermarkets Hanging on After 2007 Recalls

Wholesale Clubs and Dollar Stores

Natural Supermarkets Going Strong

The Internet Effect

Leading E-tailers of Pet Food and Supplies

Pet Ownership Trends and Demographics

The Simmons Survey System

Over 60 Million Households Own Pets

Table 2-46: Pet Ownership in the United States: 2008 (percent and number of U.S. households)

Dog/Cat Ownership Rates Edge Up

Table 2-47: Dog and Cat Ownership in the United States: 2004, 2006 and 2008 (percent and number of U.S. households)

38% of Pet Households Keep Multiple Types

Figure 2-38: Ownership of Multiple Types of Pets: 2008 (percent of pet-owning U.S. households)

63% of Pet Households Keep More Than One Pet

Table 2-48: Ownership of Multiple Pets of a Single Type: 2008 (percent of U.S. households who keep pets of a given type)

Pet Household Demographics

Pet Ownership Holds Up Across Age Brackets

Figure 2-39: Dog or Cat Ownership Rates by Age Bracket: 2003 vs. 2008 (percent of U.S. households)

Demographic Variations by Type of Pets

Table 2-49: Demographics for Keeping Pets, 2008 (percent, number and index among U.S. consumers)

Table 2-50: Demographic Overview for Selected Pet Classifications, 2008 (percent of U.S. households)

Pet Owners as Consumers

Household Purchasing of Pet Supplies by Retail Outlet Type

Table 2-51: Household Purchasing of Pet Products by Retail Channel: Total Purchasers and Sole Purchasers, 2006 vs. 2008 (U.S. households with pets)

Table 2-52: Demographic Overview for Selected Pet Product Retail Channels, 2008 ( U.S. pet-owning households)

Channel Choices in Organic Pet Food Purchasing

Table 2-53: Where Groceries Are Most Often Purchased by Selected Retailer Type: Shoppers Overall vs. Organic Pet Food Purchasers, August 2008 (percentage of U.S. adults)

Table 2-54: Where Groceries Are Most Often Purchased by Selected Retail Chain: Shoppers Overall vs. Organic Pet Food Purchasers, August 2008 (percentage of U.S. adults)

Pet Food Purchasing Overview for Dog or Cat Owners

Table 2-55: Household Purchasing of Packaged Dog and Cat Food by Type, 2008 (U.S. households with dogs or cats)

Pet Owners Are Internet-Prone

Figure 2-40: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2008 (percent of U.S. adults overall vs. dog or cat owners)

Figure 2-41: Use/Influence of the Internet: Adults Overall vs. Dog or Cat Owners, 2008 (index for U.S. dog or cat owners)

Figure 2-42: Dog or Cat Owners as Consumers: Selected Media & Marketing Psychographics, 2008 (percent and index for U.S. dog or cat owners)

Not So “Green”

Figure 2-43: Dog or Cat Owners as Consumers: Selected “Green” Psychographics, 2008 (percent and index for U.S. dog or cat owners)

The Pet Food Coupon Clipper

Table 2-56: Indicators for Use of Pet Food Coupons: 2008 (index among dog- or cat-owning households)

Bulk of Redemption through Grocery Stores

Table 2-57: Coupon Redemption Rates by Selected Retailer Type: 2004-2008 (percent)

Figure 2-44: Coupon Redemption Rates Among Pet Food Coupon Users: By Selected Retailer Type, 2008 (percent)

Grocery vs. Pet Food Coupon Usage Rates

Table 2-58: Coupon Usage Rates by Product Type: 2004-2008 (percent)

On-Shelf Coupons Generate Highest Usage

Table 2-59: Coupon Usage Rates by Product Type: 2004-2008 (percent)

Chapter 3: Other Pet Food

Market Size and Composition

Category Scope

Total Other Pet Food Sales at $907 Million in 2008

Figure 3-1: U.S. Retail Sales of Other Pet Food: 2005, 2008 and 2013 (in millions of dollars)

Figure 3-2: Share of Sales of Other Pet Food by Animal Type: 2008 (percent)

2008 IRI-Tracked Dollar Sales Up, Unit Sales Down

Table 3-1: IRI-Tracked Dollar and Unit Sales of Other Pet Food: 2008 vs. 2007 (in millions of dollars and units)

Sales Recover from Multi-Year Downturn

Independent Pet Stores: Share of Sales by Animal Type

Figure 3-3: IRI-Tracked Sales of Other Pet Food: 2003-2007 (in millions of dollars)

Table 3-2: Share of Independent Pet Store Pet Supply Sales by Animal Type: 2005-2007 (percent)

Fish Products: Share of Sales by Product Category

Table 3-3: Share of Independent Pet Store Sales of Fish Products by Category: 2005-2007 (percent)

Bird Products: Share of Sales by Product Category

Table 3-4: Share of Independent Pet Store Sales of Bird Products by Category: 2005-2007 (percent)

Herptile Products: Share of Sales by Product Category

Table 3-5: Share of Independent Pet Store Sales of Herptile Products by Category: 2005-2007 (percent)

Small Mammal Products: Share of Sales by Product Category

Table 3-6: Share of Independent Pet Store Sales of Small Mammal Products by Category: 2005-2007 (percent)

Share of Other Pet Food Sales by Retail Channel

Figure 3-4: Share of U.S. Other Pet Food Sales by Retail Outlet Type: 2008 (percent)

Mass-Market Merchandising Trends for Other Pet Foods

Table 3-7: IRI-Tracked Retailer Merchandising Trends for Other Pet Foods: 4th Quarter 2006 through 3rd Quarter 2008 (percent of sales volume)

Price Discounting in Chains Is Steepest for Cat Food

Table 3-8: IRI-Tracked Promotion of Dog, Cat and Other Pet Food: Ratio of Average Promoted Price to Average Overall Price, 2003 - Third Quarter 2008 (percent)

Competitive Trends

Marketer Overview

Leading Pet Specialty Channel Brands

Central Garden & Pet on Top in Mass-Market Outlets

Figure 3-5: Top Marketers of Other Pet Food by Share of IRITracked Sales: 2007 vs. 2008 (percent)

Audubon Park Posts Biggest Dollar Gains

Wardley and Tetra Control Fish/Reptile Segment

Figure 3-6: Top Marketers of Fish/Reptile Food by Share of IRITracked Sales: 2007 vs. 2008 (percent)

Table 3-9: Other Pet Food Brand Leaders in Pet Specialty Stores: 2004, 2006 and 2007 (percent)

Table 3-10: Leading Marketers of Other Pet Food by IRI-Tracked Sales and Market Share: 2007 vs. 2008 (in millions of dollars and percent)

Table 3-11: Leading Marketers and Brand of Other Pet Food by Mass-Market Share: 2007 vs. 2008 (percent)

Table 3-12: Marketers and Brands of Other Pet Food by IRITracked Sales and Market Share: 2007 vs. 2008 (in millions of dollars and percent)

Table 3-13: Top Ten Other Pet Food Products by Dollar Gain in IRI-Tracked Sales: 2007 vs. 2008 (in millions of dollars)

Table 3-14: Marketers and Brands of Fish/Herptile Food by IRITracked Sales and Market Share: 2007 vs. 2008 (in millions of dollars and percent)

Company Profiles

Central Garden & Pet: Corporate Overview

A Leader in Innovation

Success in Pet Specialty, Mass-Market Channels

Hartz Mountain Corp.

Corporate Overview

Mass-Market Sales Slipping

Figure 3-7: IRI-Tracked Sales and Market Share of Hartz Mountain Other Pet Food: 2003-2008 (in millions of dollars)

Vitakraft/Sun Seed Co

Corporate Overview

Acquisitions Spur Global Growth

A New Leader in the U.S. Pet Specialty Market

Figure 3-8: Percentage of Retailers Citing Sun Seed Brand as No. 1 Brand in Pet Specialty Channel: 2006 vs. 2007 (percent)

Marketing and New Product Trends

Marketing Trends

New Product Thrusts

Trends in Bird Food

Cook and Serve Foods

Bird Treats

Natural and Organic

Single-Serving Sizes

Fortified Foods

Trends in Small Animal Food

Species-Specific Foods

Special Diets and Supplements

Gourmet Foods

Grass Hay

“Growing” Foods

Trends in Fish Food

Fish Treats

Expanded Food Choices

Gourmet Diets

Clean and Clear Water

Trends in Herptile Food

Live Food Innovations

Live vs. Frozen

Species-Specific Prepared Foods

Medicated Foods

Table 3-15: Bird, Small Animal, Fish and Herptile Food: Selected New Product Introductions, 2007-2008

Examples of Other Pet Food Advertising

Consumer Focus: Other Pet Food Purchasers

Methodology

Population Trends: Household Penetration Increasing for All Animal Types

Table 3-16: Pet Ownership in the United States: 2008 (percent and number of U.S. Households)

Fish Food Purchaser Trends and Demographics

Figure 3-9: Type of Freshwater and Saltwater Fish Food Purchased: 1996 vs. 2006 (percent)

Figure 3-10: Outlet Where Freshwater and Saltwater Fish Food Flakes Are Purchased: 2006 (percent)

Demographics for Keeping Pet Fish

Bird Food Purchaser Trends and Demographics

Figure 3-11: Types of Bird Food and Packages Purchased in the Past 12 Months: 2002 vs. 2006 (percent)

Small Animal Food Purchaser Trends and Demographics

Figure 3-12: Type of Small Animal Food Purchased in the Past 12 Months: 2002 vs. 2006 (percent)

Reptile Food Purchaser Trends and Demographics

Figure 3-13: Type of Reptile Food Purchased in the Past 12 Months: 1996 vs. 2006 (percent)

Table 3-17: Demographics for Keeping Pet Fish, 2008 (percent, number and index among U.S. consumers)

Table 3-18: Demographics for Keeping Pet Birds, 2008 (percent, number and index among U.S. consumers)

Table 3-19: Demographics for Keeping Pet Rabbits or Hamsters, 2008 (percent, number and index among U.S. consumers)

Table 3-20: Demographics for Keeping Pet Reptiles, 2008 (percent, number and index among U.S. consumers)

Abstract

The U.S. pet food market has not just survived the spring 2007 recalls but proven its resiliency, with 2007 sales up over previous years and healthy growth continuing through 2008. Yet heightened safety concerns on the part of pet food makers and consumers continue to shape product development and marketing, as well as the choices of pet owners looking for the safest and healthiest products possible. At the top of the list are kibble, canned and raw/frozen foods made with ingredients that are natural, organic, grain-free/non-allergenic and pure, as well as made in the U.S.A., locally grown, “whole” (fruits, vegetables, grains, etc.) and human-grade. Foods making functional appeals also continue to proliferate, especially those targeting age- and weight-related conditions via the inclusion of novel ingredients like glucosamine, omega fatty acids, antioxidants and probiotics. In other words, premium pet foods remain the primary value growth driver in the U.S. market, with ever higher quality ingredients fueling the premium wave.

At the same time, one thing marketers and retailers at all levels of the market cannot afford given the faltering U.S. and global economies is complacency. More than ever before the ability to convert pet owners to higher priced products—or keep them buying them—will depend on marketers’ success in communicating product benefits and tapping into the ever-potent human/animal bond. Helping to make the case are new celebrity spokespersons like Cesar Millan with his new Dog Whisperer line, and Ellen DeGeneres with her co-ownership in Halo Purely for Pets, with other positive trends including rapid growth in the natural supermarket channel and an increasingly globalized market in which ingredients suppliers like Cargill are looking to stake a deeper claim in pet food (in Cargill’s case by specifically targeting the U.S. agricultural retail channel as well as global markets). At the same time, new products continue to flood the market, which saw more entries in 2008 than in any previous year.

Pegging 2008 U.S. sales at $17 billion and global sales at $49 billion—and projecting steady growth through 2013—the report provides market size estimates for the overall retail universe, while quantifying mass-market sales to the marketer/brand share level using data from Information Resources, Inc., and also providing market size and marketer share figures for the natural supermarket channel. The report thoroughly documents competitive, new product and retail trends, as well as trends in pet food purchaser demographics and lifestyle pursuits (media and marketing psychographics, Internet usage, “green” involvement, etc.), based on data from Simmons Market Research Bureau, BIGresearch, the American Pet Products Association and other sources.

Bringing to bear more than 20 years of experience in analyzing this market and drawing on Packaged Facts’ broad cross-category expertise, Pet Food in the U..S pinpoints strategic directions for current and prospective marketers, with a forward-looking focus on high-growth product segments and market-driving trends. The report provides a comprehensive Market Overview covering cross-market trends. New features of our 2009 edition include focus sections on:

• The global pet food market (sales overall and by world region, marketer shares, new product trends, U.S. export trends, and more);

• Recall-related product safety initiatives;

• Cross-channel private-label activity and prospects;

• Levels of in-store merchandising and price promotions;

• Pet food purchasers as coupon users.

Also included are dozens of images of pet products and consumer and trade ads.

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