Looking ahead to 2018 and beyond, the outlook for the U.S. pet food market remains appetizing. The market is benefitting from several key drivers, including some of the same Millennial- and ecommerce-related trends that are bolstering so many other segments of the U.S. retail economy. In the brand-new report Pet Food in the U.S., 13th Edition, market research firm Packaged Facts estimates overall pet food sales increased almost 6% and topped $26 billion in 2017. The market is forecast to continue on a respectable growth trajectory annually through 2022.
Packaged Facts’ market estimate for the overall pet food market includes dog and cat food, but does not include non-dog/cat food, dog/cat treats, and non-food pet supplies—including chews (natural, rawhide, nylon), and supplements.
“Much of the growth in the pet food market can be attributed to the rapid acceleration of online sales, particularly with behemoths Amazon and Chewy.com. Internet sales of pet products are outpacing and even stealing sales from other channels, notably pet super stores. Not to mention the emergence of Millennials as prominent pet market consumers,” says David Sprinkle, research director for Packaged Facts. “But there are other, perhaps even at times under the radar, developments that are driving pet food growth.”
Here are five other trends Packaged Facts expects will influence the U.S. pet food industry in 2018 and in the years beyond:
Home-delivered pet food: Did you think meal kit delivery was just for humans? Several recent endeavors have aimed to deliver dog food to their owners’ front doors. Selling points for these services include customized offerings, fresh food, convenience, and home-made quality. Examples include PetPlate, The Farmer’s Dog, JustFoodForDogs, Ollie, and Just Right by Purina. To date, home delivery of pet food (whether customized or non-customized orders) has increased to nearly one-fifth of pet owners.
Pet parents seeking foods with preventative benefits: Many Americans are proactive about their health, especially when it comes to what they eat. Pet owners are similarly concerned about preventive health care for their pets. And many think that the foods they buy can make a difference. In the Packaged Facts February/March 2017 National Pet Owner Survey, more dog and cat owners (76% and 71%, respectively) than in previous years of the survey agree with the statement “High-quality dog foods/cat foods are effective for preventive health care.”
Micro-targeted and functional pet foods: This trend runs tangential to pet parents seeking preventative foods. Pet food marketers are carving the market into many fine slices, all serving specialized target consumers with specific nutritional needs. These sub-groups include age, breed, size/weight, activity level, indoor vs. active, type of fur, as well as allergies and other chronic health conditions. Echoing trends in human foods, specialized pet foods offer whole food and/or nutraceutical ingredients, such as probiotics, omega fatty acids, glucosamine, fruits, and vegetables. Micro-targeted and functional pet foods will keep growing at an above-average clip in the near-term, Packaged Facts forecasts.
DIY pet food: Pet parents often supplement pets’ meals with additional homemade side dishes, such as grilled meat, home-cooked pumpkin, or other favorite indulgences. Other pet owners pursue a “semi-homemade” approach by enhancing the pet’s meal with various additions, such as mix-ins, toppers, sauces, and even spray-on nutrients. Pet food makers are addressing this behavior by offering products that can be personalized, or used in combination with other products. The raw and dehydrated pet food segment generally involves some preparation and therefore opens the door to further customization by the pet owner.
New directions for proteins and other ingredients: Just as pet owners seek proteins for themselves, they also seek them out for their pets. Innovation around protein is considerable as pet food producers launch new products to meet consumer interest in protein, including varieties of single-proteins, proteins as the first ingredient, multiple proteins, and exotic proteins. This trend is linked also to the rising popularity of ancestral formulations that aim to recreate the diet of dogs and cats when they lived in the wild prior to domestication. The ancestral niche can be viewed as the point of the spear in developing the market for high-quality protein ingredients for pet food. Many companies fully embraced ancestral/wilderness imagery while others have focused on the high protein aspect of the equation without the ancestral/wild animal positioning. The ancestral products have also stoked interest in raw and whole prey pet food, both relating to the wild animal diet.
Yet pet owners are interested in more than just animal-based proteins. Many believe that vegetables and grains are important for their pets’ diets. According to the Packaged Facts September/October 2017 National Pet Owner Survey, 68% of pet owners say vegetables can be good ingredients, with 48% saying the same about brown rice.