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. Covering products for all type of companion animals, the report devotes separate chapters to Dog Food, Cat Food, and Other Pet Food (birds, small animal, fish, and reptiles), while also providing a comprehensive Market Overview covering cross-market trends. New features of our 2009 edition include focus sections on:
Also included are dozens of images of pet products and consumer and trade ads.
Read an excerpt from this report below.
Market Insights: A Selection From The Report
U.S. Pet Food Exports Up 15%
U.S. exports of dog and cat foods approached $1 billion in the first three quarters of 2008, up 15% over the first three quarters in 2007, according to Census Bureau data compiled by the Foreign Agricultural Service (FAS). After a slight downturn in 2004, U.S. exports of pet foods have been growing at a steady clip, driven generally by international demand for specialty and value-added products, and most recently by the pet food adulteration scandal of spring 2007, which dealt a blow to the Chinese pet food exporting industry. [Tables 2-3 and 2-4]
In December 2007, in the wake of the pet food scandal, the United States and China signed a food safety agreement that covers pet foods and pet treats along with grains, seafood, and farm-raised fish used in processed foods. The agreement establishes quality control standards and agreements for quality supervision, training programs, and joint research projects (Petfood Industry, January 8, 2008).
Canada, Japan Are Top Export Markets for U.S. Pet Foods
Canada is the top export market for U.S. dog and cat foods, accounting for $438 million in trade in 2007, and $307 million in trade for the first three quarters of 2008. [Tables 2-3 and 2-4]
A prime market for functional, small-breed and older pet formulations, Japan ranks second as a U.S. export destination, accounting for $209 million in trade for the first quarters of 2008. Japan claims a 22% share of U.S. pet food exports, compared with Canada’s 39% share. [Figure 2-7]
Independent Pet Stores: Share of Sales by Animal Type
According to Pet Product News International’s 2007-2008 State of the Industry report, dogs account for the largest share of independent pet store sales (including food and non-food supplies, as well as livestock), at almost one-half (48%) in 2007, followed by aquarium fish (18%) and cats (12%), with much of the balance of sales going to birds, small mammals and herptiles. Reversing trends seen in previous years, the dog category surged in 2007, increasing its share of independent pet specialty retailer sales by 18 percentage points over 2006, while the cat category rose 5 percentage points. Fueling these gains in the dog and cat categories were the spring 2007 pet food recalls, which brought dog and cat owners into the pet specialty channel in search of safer foods and professional consult. [Table 2-16]In the News
Pet Owners Splurge on Premium, Fortified Food for Animal Companions
New York, January 13, 2009 - The premiumization trend in the global pet food market indicates that pet owning consumers are as willing to spend more on premium food infused with health fortifying ingredients such as glucosamine, omega fatty acids, antioxidants, and probiotics for their pets as they are for themselves.
Premium pet foods cover all bases—from natural/organic to functional/nutraceutical to special diet (segmented by lifestage, weight, health condition, breed, etc.) to gourmet—while also often reflecting trends in human foods.
Driven by premiumization the global pet food market reached an estimated $49 billion in 2008, according to market research publisher Packaged Facts in the all-new report, Pet Food in the U.S.: Health, Humanization and High Quality Ingredients in an Increasingly Value-Driven Global Market, 8th Edition. The 2008 global total marked a compound annual growth rate (CAGR) of almost 5% for the preceding five-year period.
North America accounted for the largest share of global pet food sales in 2008 with 40%. “Particularly in the United States, the premiumization trend goes beyond the tendency Americans have to be better educated about health and nutrition issues. In addition, the pervasive humanization dynamic cannot be underestimated. Pet owners often view their pets as part of the family, or even as surrogate ‘children.’ Thus they are looking for the safest and healthiest products possible,” says Tatjana Meerman, Publisher of Packaged Facts.
Pet Food in the U.S.: Health, Humanization and High Quality Ingredients in an Increasingly Value-Driven Global Market, 8th Edition examines the global pet food market (sales overall and by world region, marketer shares, new product trends, U.S. export trends, etc.); strategic directions for current and prospective marketers; high-growth product segments; and trends in pet food purchaser demographics and lifestyle pursuits (media and marketing psychographics, Internet usage, “green” involvement, etc.). The report has separate chapters each discussing food for dogs, cats, and other companion animals.
About Packaged Facts- Packaged Facts, a division of Market Research Group, publishes market intelligence on a wide range of consumer industries, including consumer goods and retailing, foods and beverages, demographics, pet, and financial products. Packaged Facts also offers a full range of custom research services.