PET FOOD MARKET
The pet food market was valued at USD 74.9 billion in 2016. North America accounted for the largest share of more than 35% of the global market in 2016. The second largest market is Europe, followed by Asia-Pacific with about 20% of the market. shares, thus accelerating the trend of pet owners around the world. In North America, the United States has the largest share of the pet and pet owner market, which is expected to post a high CAGR during 2017-2022 (the forecast period).
LIKES FOR NEW EXPERIENCES AND SERVINGS AS AN ALIBI OF PLEASURE
The flavors and textures are becoming bolder, more complex, authentic and specific. The correlation of pet foods and modern formats that combine freeze-dried chunks, with kibble or treats, for variations in texture, has pet owners choosing from a variety of shapes, textures and flavors. Additionally, clean labeling continues to grow. Health-conscious consumers are looking for allowable indulgences, such as smaller portions of candy bars or sweets with healthier ingredients like chia seeds or yogurt. Pet treats are being developed, in terms of ingredients with functional or other nutritional benefits, allowing pet owners to indulge their pets without feeling guilty. New dog food products comprise 80% of global launches in 2015. Launches from September 2015 to September 2016 keep the health-related trend in new products by category intact. The share of cat food was around 68% globally. This health and wellness trend has made good sales for manufacturers. Some examples in this context are Hill’s Ideal Balance, a new range of cat and dog foods that combines natural ingredients with Hill’s perfectly balanced nutrition, which is now available in South Africa. CORE® RawRev, a new high-protein, grain-free product, is launched by Wellness CORE®, a family of grain-free and natural animal nutrition companies.
IMPROVED DISTRIBUTION NETWORK LEADS TO GROWTH IN PET FOOD SALES
High Internet connectivity available in major countries is driving the use of e-commerce sites as an effective distribution channel. The notions of convenience, wealth or exclusivity, security and knowledge of the market play a very important role in developing nations. The unreliability of local products, as indicated by recent scandals, is also making people dependent on foreign products. These are easily available through e-commerce, further increasing sales. Powered by the two largest pet stores in the industry, PetSmart and Petco, the e-commerce channel is booming with sales of pet products. Late adoption of market connectivity in minor markets of small economies like Vietnam, Thailand, etc. is a cause of infrastructure lag and almost negligible product awareness. These stores offer the nascent market the advantages of low regulations and competition. Businesses, as e-commerce goes from strength to strength, are negotiating the ever-changing internet landscape with factors such as dealing with giants like Amazon, which decides to sell through similar e-commerce websites, and mergers and acquisitions. For example, in April 2017, PetSmart announced it was acquiring Chewy.com, raising dismay among independent pet retailers. In response, Tuffy’s Pet Food, a manufacturer of independent and family-owned businesses, announced that it would withdraw its products from Chewy as it would be owned by the largest pet store chain in the US. Although Tuffy’s reports a very positive response, it does not all businesses are easily separated from the big e-commerce sites.
“FREE FROM EVERYTHING” AND “FLEXITARIAN EFFECT” BOTH LOOKING FOR THEIR WAY TOGETHER
Although today’s consumers are part-time vegetarians, they seem to do the opposite when it comes to pet food. Pet owners are looking for dietary options that focus on the carnivorous nature of cats and dogs, which drives the number of products with high fresh meat claims. Despite the demand for carnivorous diets, vegetables are still going mainstream and growers are innovating their existing products. Free From” For All: The free from trend has been growing for the past few years and has now hit the mainstream. Pet foods are being formulated with respect to human concerns that include organic and non-GMO ingredients. These Ingredients are used in low-carb recipes and have gluten-free claims in new cereal products, increasing from one in 15 in 2011 to one in five in 2016. New product launches, with organic or GMO-free ingredients, are experiencing market growth Sales of organic and natural foods are expected to grow 14.6% per year over the next two years Brands are communicating more about production processes, due to growing consumer interest in what plus authenticity and transparency.This is also true for buyers, especially those looking for products in format. non-traditional foods like raw, freeze-dried, frozen, and baked. Balchem Corp., a global health and nutrition company, introduced a new line of specialty nutrients and unique processing additives. The Omega Plus range was launched in the South Island in September 2016, after two years of continuous research and development. In addition, Bob Martin launched Simply+, a range of products marketed as “nutritionally advanced foods that provide dogs with all the essentials of a healthy diet.”
CROSS-BORDER ZONE TO HELP MEET STRONG DEMAND
The domestic market is growing at an annual rate of more than 30% in China and is about to accelerate at the same rate by 2022, reaching CNY 150 billion and above, making it the third largest market in the world. In addition, Hangzhou in Zhejiang province launched the first cross-border pet industry pilot zone in the city’s Jianggan district. The pilot zone will pilot reforms on the regulation and approval of cross-border imports. It will explore the introduction of national standards in the industry and will promote the export of nationally manufactured products. In addition, more than 35 companies have established themselves in the pilot zone, including cross-border e-commerce sites such as Tmall, Kaola Beibei, and related logistics and warehousing companies. The zone basically enables one-stop services and aims to register open, transparent and intelligent pet food import channels and regulatory policies. Countries are making similar efforts to focus on the growing pet population and trends. Market players are making the most of this situation and investing in R&D to launch innovative products.
NOTABLE MARKET DEVELOPMENTS
1. Nestlé Purina inaugurated a new production hall at its Bük facility in northwestern Hungary, making the plant the largest production center in Europe, and opened USD 86 million factories in Brazil. This step is expected to propel Nestlé Purina to higher growth than the domestic market.
2. Carna4: Formulas inspired by healthy food trends. This manufacturer is inspired by the human food sector to formulate innovative and comprehensive recipes for dogs and cats.
3. PetLife exceeds expectations for Dr. Geoff’s acquisition of Real Food for Pets. PetLife Pharmaceuticals, Inc., developer of a new generation of high-potency veterinary cancer drugs and nutraceuticals for pets, announced the acquisition of Dr. Geoff’s Real Food for Pets™ and expansion plans for a national rollout.
4. German company entering Thailand. Interquell, a Germany-based dog and cat food company, entered the Thai industry by forming a joint venture, called Happy Pet (Thailand) Co Ltd, with partner Technic Pet Holding, Pets International reported. Interquell owns 49% of the joint venture. Interquell owns 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 Australian cat deaths?
Gluten free, GMO foods making their mark in the pet food industry.
Edible insects are becoming popular in pet foods.
Humanization and premiumization at the peaks of the pet industry.
Will the US and China continue their dominance in the pet food market? What are emerging markets?
Is the increasing market connectivity in the Asian countries of Vietnam, Thailand, etc. boost the Asia-Pacific pet food market?
