The Global Pet Food Market is expected to grow at a CAGR of 5.1% during 2021-2028.
Pet food is plant or animal material intended for consumption by pets. Typically sold in pet stores and supermarkets, it is usually specific to the type of animals, such as dog food or cat food. The Pet food industry is one of those enterprises, which has been performing admirably, notwithstanding the financial downturn. The administration of different nations has taken some activities and few initiatives to advance the utilization of healthy and safe ingredients to improve pets' general health.
Overview
Market Dynamics
Pet refinement/humanization influencing the purchasing decisions, changing consumers' perception towards pet health, changing demographics, and increasing product differentiation are the key drivers for the market growth. Over the years’ pet owners have shown a growing trend to imbue their pets with human characteristics and have become more concerned about their pet’s health and safety. A survey conducted by the American Veterinary Medical Association found that expenditure towards veterinary care and pet health care has seen a 40% rise in recent years. This is due to the growing human-animal bond, which defines consumers’ willingness to spend for their pets. Demand for pet health care insurance in the country will also support the argument.
Given the nature of the market, product differentiation plays a key role. This trend is well visible in the varied and different kinds of products coming up every year. Apart from the traditional segments of flavors, snacks treat, the more specific and healthy domains such as therapeutics and nutraceuticals are also witnessing a rise. This arises from the need to address certain micro-trends that emerge in consumer buying patterns. Few products that have been making a significant impact in the US are ‘life-stage’ products and fresh ingredients.
Increasing product differentiation and issue over rendered meat are the market restraints for the market growth. The commodity price hike has hampered the pet food industry, leading to the increased final product price. The price increases in essential raw materials such as corn, soybeans, and wheat have mostly been attributed to increased demand from developing BRIC countries. This has also led to an increase in the price of most protein sources that are fed by these essential food commodities. Other food commodities have seen similar price spikes. Pet food inflation is expected to remain high in the coming years as rising commodity costs are expected to diminish many pet food producers' profit margins.
The global market for pet food is broadly segmented as wet pet food, dry pet food, and veterinary food based on the product. The global wet pet food market was worth $69.1 billion in 2018 and is forecasted to reach $XX billion by 2026, at a CAGR of XX% during the forecast period. It is expected to hold the highest market share in the forecast period. Wet food is significantly higher in moisture than dry or semi-moist food. They are thermally processed cereal, grain and legume products prepared hermetically to increase the shelf life with no addition of preservatives and artificial additives. As the thermal process enhances products' shelf life, the need for preservatives' addition gets minimized. When compared to dry pet food, wet pet food contains more proteins or fats. However, consumers prefer dry pet food as it’s less expensive and easy to feed. Wet pet foods are more popular for cats as they consume very less water; wet food provides hydration and prevents urinary tract infections.
The global market for pet food is broadly classified as economic, premium, and super-premium based on price. The global economic pet food market was worth $35.4 billion in 2018 and is forecasted to reach $XX billion by 2026, at a CAGR of XX% during the forecast period. The premium segment is expected to hold the highest market share in the forecast period. The products classified under the economic segment are a necessity for every pet owner. The main purpose of these is to provide a source of nutrition and protein for the pet. Commonly included ingredients are fresh meats like chicken and beef. Some foods are made from the various parts of animals that are not useful for human consumption, such as the heart, liver, bone, feet. These are normally categorized as the by-products of the meat processing industry.
Depends on the application, the global market for pet food is broadly categorized into dog, cat, bird, and others. Globally, the dog food segment is majorly driving the pet food market with a CAGR of 4% in the forecast period. This segment covers nearly 60% of the total market, and the cat food market is expected to grow at the fastest rate in the pet food industry. Dogs are the major consumers of pet foods. Dogs adapt to traditional eating habits such as meat, non-meat scraps, and leftovers of human food. However, these unhygienic foods have led to allergic reactions in pets. Health concerns for animals and humanization have created an opportunity for the pet food market. The global dog food market is primarily driven by premium dog food due to health concerns and quality. Consumers are also demanding natural, organic, additive-free products for their pets. The major pet food manufacturers are also focusing on innovation beyond pet food and are coming out with healthy snacks and treats.
The market is divided into specialty pet shops, hypermarkets/supermarkets, online, and others based on the distribution channel.
The global Pet Food Market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa.
The North America Pet Food Market was worth $35.5 billion in 2020 and is forecasted to reach $XX billion by 2028, at a CAGR of 4.3% during the forecast period. North America is the largest market for Pet food globally, with a global market share of 43%. In North America, the market is mainly dominated by the US, followed by Mexico and Canada. Higher pet ownership and more focus on pet nutrition and health are the key factors driving the market. North America continues its dominant position in the global pet food market. The U.S. represents the largest market for pet food in the North American region. Increasing pet humanization, increase in pet ownership, the emergence of private label store brands, and growing urbanization are some of the major driving forces that propel the North American pet food market's growth. Also, the market is being driven by locally sourced products and more ethically sourced products. This is being majorly driven by the smaller manufacturers and helps the local market grow faster due to the local sourcing and higher consumer focus on these products.
Europe is the second-largest market for pet food globally, with a market share of 34% as of 2018. The Europe Pet Food Market was worth $27.5 billion in 2018 and is forecasted to reach $XX billion by 2026. Despite the economic slowdown in the region, the market is forecast to grow at a CAGR of XX% for the study period. The market is primarily driven by the increase in pet humanization and change in urbanization, leading to closer contact with pets and a higher tendency to look after the pet's nutritional needs and health. The market is seeing an increase even during the slowdown, which has led to the emergence of pet superstores that tend to all pets' needs, be it nutritional, dietary, exercise-related, or the works. The trend for buying premium food for pets, which are more natural and nutritional in nature, has evolved in the region and has led to the increased permeation across price platforms. Germany has the highest growth for the market individually in the European region, but the UK has the largest market share.
The pet food market in the Asia Pacific region has grown remarkably over the past few years due to the growth in emerging markets such as China, India, Indonesia, Thailand, Malaysia, and Taiwan. Besides, the people's changing preference to adopt a pet in the Asia-Pacific region, especially in India and China, has also fueled the pet food market's growth in the recent past. The use of pet food is popular among pet owners in urban India. Thus, all manufacturers are targeting urban pet owners, mainly in first-tier cities. Branded pet food availability is restricted to urban India as popular breeds are limited to major cities.
Competitive Analysis
Few key market players are Big Heart Pet Brands, Blue Buffalo, Deuerer, Heristo AG, Hill’s Pet Nutrition, Laroy Group, Mars Petcare Inc, Nestlé Purina PetCare, Spectrum Brands / United Pet Group, and Unicharm Corp.
Five companies majorly dominate the Global Petfood market. These big five companies account for 55% of the market. In fact, two of the companies account for 46% of the market. The two big companies are Mars and Nestle, account for 24% and 22% of the market, respectively. The other companies Colgate-Palmolive, Blue Buffalo Pet Products, and Spectrum Brands, account for 4.9%, XX%, and XX% of the market share.
The rest of the companies in the world account for 45% of the market. Some years back, P&G Pet Care was also a big player in the market. Later, Mars slowly acquired most of its business operations, making it the biggest pet food market business.
The key strategy being adopted by Hills nutrition is promotions and collaborations with government programs. The company targets the vet community and its sales team, which comprises 75% of vet nurses. The initiative is aimed at pushing its nutrition care products. The company’s high pricing strategy emphasizes the image of Hills as a specialty pet food brand.
Keeping in line with high pricing, the company launched its pet food label made from natural ingredients, Science Diet Dry, and a new low fat, fat-burning pet food under the label name ‘Prescription Diet Metabolic.’ Besides, Hills nutrition focuses on pet food packaging and labeling improvements to emphasize its latest product enhancements.
