Pet Food Industry Witnesses a Gradual Development with Changing Trends
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The world has seen an upsurge in pet adoption in the last five years. People from all across the world are increasingly opting to adopt a pet, resulting in a proportional growth of the pet food industry. Gone are the days when pets were brought home merely for security purposes. People now have an empathetic value attached to their pets, resulting in them treating the pets like their own children, thus giving a meaning to the term ‘pet parent’. This humanization of pets has resulted in substantial development of the pet food industry, as pet parents become more and more aware of the nutritional needs of their four-legged companions.
Growth in the Pet Food Industry
With factors such as urbanization, premiumization and humanization contributing to the growth on a global level, this industry has witnessed a steady development both in the mature North American market as well as the developing Asia Pacific market. When compared to the rest of Consumer Packaged Goods (CPG) industries, Pet Food Industry is fairly concentrated and stands strong at USD 110 billion in 2017 with a Compound Annual Growth Rate (CAGR) of 3 per cent and an incremental growth amount of USD 14 billion in the period of 2012-2017, according to The State of Global Pet Care: Trends and Growth Opportunities, a research report by Euromonitor International.
According to the aforementioned report, the North American segment stands as the unrivalled heavy spender on pet care, accounting for USD 350 per household sales and registering a growth percentage of around 7 per cent in 2017. With an exception of Japan that clocks in average pet food sales in the amount of USD 5 billion per year, the Asia Pacific (APAC) segment is an emerging one. The pet care sales percentage in the APAC region are experiencing significant growth of about 20 per cent, as quantified by the report.
In India, specifically, factors such as a rise in the number of nuclear families especially in urban areas as well as the per capita disposable income has ensured an increase in pet adoption. According to India Pet Food Market Forecast and Opportunities 2019, the pet food market in India is predicted to cross USD 270 million by 2019.
A large segment of the global pet care industry in general caters to dogs. Euromonitor analysts also observed that around 44per cent of the amount spent on global pet care accounts for dog food. General pet products and healthcare trail at 27per cent, closely followed by cat food at 26per cent which is expected to gain momentum in the coming years. Other pet foods account for a meagre 3per cent.
With around 85per cent of pets in India being dogs, India has seen the highest percentage growth in dog population in 2012-2017, accounting to a sturdy 77per cent, as compared to -3per cent in the USA as well as the UK.
While pet food typically includes packaged and ready-to-eat food products providing an appropriate amount of nutrition to pets, pet parents have recently started shifting towards their premium and natural substitutes. This is a result of the changing trends in the pet food industry such as urbanization, humanization, premiumization, and an increase in disposable income, especially in the emerging markets. This has not only driven volume growth in the sales of the pet food industry but also narrowed the gap between pet food and human food.
Pet parents, especially in the US, have gradually started humanizing their pets, considering them a part of their families. With an outlook of “What is good for me is good for my pet”, there has been an increasing concern among pet parents about providing their pets with food quantifying the same nutritional standards as theirs. This has resulted in a growth in sales of the industry, particularly in the premium and natural section. While in the APAC region, it has been observed that the urbanization of the populations and growth in the middle classes has led to pet parents stressing more on the needs of their pets. Customers desire for more premium-focused and natural foods for their pets in these areas as well.
The New Approach
Equipped with a much better understanding of pet’s health, there has also been an emergence in trends such as focusing more on personalized research pertaining to pets. Pet food companies are now targeting more specific nutritional requirements of pets. The need for sustainability as well as the advent of new and alternative sources of protein have pet food brands going beyond meat products and focusing more on vegetable as well as like yak cheese based treats.
Another major trend shaping the future of the pet industry is the growth of online retail. Factors such as better reach and efficiency have helped e-commerce succeed in capturing pet parents’ attention. Since this has facilitated pet parents who need not go to stores physically anymore and have a variety of pet food options available in the palm of their hand, this has also resulted in a steep increase in online sales, with platforms such as Amazon garnering USD 1.4 billion in pet food sales.
There has been a robust growth in the demand for pet food and with an increasing pet population and changing lifestyle and perception towards pets, the demand is ever-increasing. The future of the pet food industry looks very promising, according to a research report on pet food market predicts that the industry would register a CAGR of 4.1per cent in the period of 2016-2022. Pet food is a steadily developing industry and when it comes to taking care of and providing with the right nutrition to their furry ones, pet parents have helped ensure that the industry continues to enjoy a strong growth trajectory for years to come.