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Why The $91 Billion Pet Food Industry Is Still Open For Disruption Six billion dollars in pet food sales are about to shift online. It's the perfect time for innovative companies to create replace dry kibble with healthier alternatives.

By Jaron Lukas

Opinions expressed by Entrepreneur contributors are their own.

Chalabala | Getty Images

The pet food industry may seem like it's filled with competitors, but when we take a closer look at the quality of food most consumers are feeding their pets, we find that there's a lot of room for improvement to be made.

In this article, I'm going to explain why there's still a huge opportunity for new companies to enter the pet food market. In fact, over six billion in pet food sales are expected to shift from brick-and-mortar to e-commerce sales by 2024 according to Packaged Facts.

I'm also going to explain why dry kibble — arguably the main cause of declining pet health today — will be the central point of attack for new entrants into the market.

The myth of dry kibble

Most of us have never questioned why we feed our dogs dry kibble. I mean, everyone feeds their dogs this way and they seem fine. Don't they?

Related: Why This Multimillion Dollar Pet Food Company Won't Sell to PetSmart or Petco

Well, it's the same as if you and I ate cereal for every meal. Cereal and dry kibble are even made in the same machines.

We might sustain ourselves for a while, maybe even decades, but eventually, we would see the health issues that arise from eating this way.

Dry kibble is the most processed form of dog food on the market today, and it represents 72 percent of all dog food sold. Let's quickly look at how this came to be.

A brief history of commercial dog food

Americans originally fed their dogs homemade natural food. Then in the 1920s, commercial dog food went mainstream for the first time — it was a canned food made of horse meat. This brand had a 90 percent market share at its height in 1941.

Seeing the potential market size for dog food, many corporations spent the next decade trying to create a dry alternative.

Purina achieved this in 1956 with its invention of the extruder. This machine can easily be blamed for much of the pandemic chronic illnesses both humans and dogs are experiencing today.

In these machines, highly processed foods are cooked at high temperatures in a process that quantifiably reduces the nutritious value of the end product. The machines break down the molecular structure of the ingredients.

Related: 6 Reasons You Can't Go Wrong With the Pet Industry

Add some animal by-products for protein, low-quality preservatives, and corn gluten meal — then bake it at 500° F. The end result is the dry kibble you see on store shelves.

Highly processed foods are not good for us — or our dogs

The fact that processed foods are not good for us is no secret, but most consumers have not tied this fact to their dog food.

This mental discrepancy is the arbitrage opportunity that exists for entrepreneurs in the pet food industry right now.

While 72 percent of dog owners agree that high-quality food is effective in preventative healthcare, they continue to feed their dogs dry kibble because they simply don't know it's of poor quality. Most consumers don't understand the harm they're doing to their dog's long-term health.

Education is needed.

New pet food companies who create healthier alternatives will have the task of educating the public. Those who are effective at it will take part in the $6 billion shift that is projected to occur over the next four years.

How to innovate in pet food

The more I learn about pet nutrition, the more I believe our pets biologically require a carnivore-leaning diet similar to what their ancestors ate. Most commercial dog food sold today is the complete opposite, with 70 percent or more of its calories coming from carbohydrates.

Related: Biotech Startups Pounce on Cultured Pet Food

If we feed a high carb diet to animals that are historically carnivores, the most likely outcome will be health issues and diabetes.

And in fact, these are growing trends.

For founders out there thinking about improving pet food, here are some of the innovation areas I would focus on:

  • Experiment with new ways of manufacturing pet food to make shelf-stable products more nutritious.
  • Experiment with new protein sources to bring animals back towards their ancestral diet while remaining affordable.
  • Experiment with local-first business models to sell fresh dog food.

I invite all of you out there to join me in improving the pet food industry. We cannot continue to let large corporations get away with selling low-quality products to the public, disguising them as health food.

Our first target should be dry kibble, which as I've explained, presents serious health risks to our pets.

If we can provide consumers with affordable alternatives that help them improve their pet's nutrition, we'll make a worthwhile impact that also creates new jobs and provides cash flow to support further change.

Jaron Lukas

5X entrepreneur

A J.P. Morgan banker who turned good, Jaron Lukas is a five-time entrepreneur cited by Fox Business News as a leader it's watching. Currently, he's a co-founder of Yumwoof Natural Pet Food and advisor to over 15 startups.

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