EuroMonitor has recently released a new edition of Pet Care Industry Information.
EuroMonitor has recently released a new edition of pet care industry data that provides latest insights on the dog and cat food industry performance in 2018 and key prospects through 2023. The major takeaways from the report are the trends in competition, the growth in cat ownership, continuing strong online sales growth and premiumization.
Pet food industry Competition
Pet food is a fairly concentrated industry. The top five companies account for more than 40% of global sales. This is striking and different from other Consumer Packaged Goods (CPG) industries. However, recently global manufacturers have been under significant pressure from new and local players.
Blue Buffalo has shown a continuous success story with a 138% growth in the last 5 years. This shows that pet owners are willing to spend more on their pet’s nutrition.
Rachel Ray has also achieved great success, and it was one of the fastest growing brands in 2017. Both these brands have been recent targets of M&A.
The developing markets also saw a rise in competition with local players stepping up their credentials by using their knowledge of local consumers and leveraging synergies with rising competition.
Recent developments in the industry have seen the rise of popularity of cats in markets all over, largely overtaking dogs’ popularity. The rise in popularity can be attributed to cats’ playful and relatively more independent nature, making them the preferred companions for fast paced, urbanised young owners.
This has also led to a rise in sales of cat treats and cat foods. The category has seen high levels of premiumisation with more nutrient rich, alternative protein and functional diets coming to the markets.
Global premium cat food sales are expected to grow by 4% in 2018 with absolute growth sales expected to reach USD 2 billion in the next 5 years. Mid-price cat food is also expected to post good growth.
Strong Online Sales Trajectory
Online retail sales has been gaining significant traction across developed and developing markets. Particularly in the United States where growth rates have been phenomenal. There has been a lot of action in the industry as Pet Smart acquired Chewy (a pure play retailer). Target and Walmart have pushed omni-channel sales and Amazon is stepping up as well.
Key motivators behind the shift to e-commerce can be attributed to price points, convenience and product selection.
Premiumization has helped define and generate growth in the industry for many years, but the ways it has done so have been changing over time.
New, locally and sustainably sourced ingredients are playing an important role in adapting to consumers’ demands. The rise in healthy living lifestyles of the owners has percolated to the way they interact with their pets, especially the way they feed them.
Globally, premium dog and cat food products have experienced strong growth with 25% growth in value over the last five years and has an expected 4% CAGR for the next 5 years, according to Euromonitor International’s latest estimates.