TL;DR
The pet food industry is thriving, with sales expected to continue growing in the coming years. US consumers are devoted to their pets, spending billions on pet food and treats annually. Millennials are driving the trend, spending more on premium pet care and services. As the industry evolves, supply chain challenges and emerging trends are reshaping the market.
The pet food industry is growing fast
Last year, global sales of pet food reached an estimated $120.9 billion, and experts project that this figure will soar to $177.1 billion by 2030, according to ReportLinker. The United States is a huge percentage of this. U.S. consumers spending a staggering $50 billion on pet foods and treats in 2021, as reported by Packaged Facts. The number of pet-owning households in the US continues to rise. A whopping 70% of American households own at least one pet, reported by the APPA National Pet Owners Survey (2021-22).
Dogs remain the most popular pet in the US, with a presence in 69 million households. They are closely followed by cats, with 45.3 million households owning a feline companion. Additionally, freshwater fish and birds have found homes in 11.8 million and 9.9 million households, respectively.
As the industry thrives, it faces challenges brought about by rising prices and inflation. Pet food prices have seen a significant increase, with a 15.1% rise in January compared to the same period last year, as reported by the Consumer Price Index. The prices of other pet supplies also rose by 12% during that time. However, dedicated pet parents are finding ways to navigate these challenges. Customers are actively seeking deals such as using coupons, shopping sales, and embracing subscription services and rewards memberships offered by companies like Chewy, PetSmart, and Petco.
Millennials play a pivotal role in driving the growth of the pet food industry. Millennials are the largest demographic group of pet owners and tend to spend more on their pets, especially on premium food and services. A report from Morgan Stanley reveals that the pandemic has led to an increase of 5 million pets in US households. Morgan Stanley also predicts an annual growth rate of 8% in pet-related spending through 2030. Millennials, with their smaller families and changing lifestyles, treat their pets as family members, driving the trend towards premium care and human-grade food.
Inflation has had very little effect on pet care purchasing habits
Despite the challenges posed by rising prices and inflation, pet parents remain committed to providing the best for their furry companions. A Pet Trends Report from NielsenIQ found that two-thirds of surveyed dog and cat owners had no intention of trading down from their preferred pet food brands. This loyalty to favorite brands indicates the significance of quality and trust in the pet food industry.
Supply chain delays have posed additional challenges in recent years, leading to empty shelves and shortages. However, the situation is gradually improving. As shelves are restocked, inflation is expected to slow down, offering some relief to consumers.
Looking ahead, the pet food industry is witnessing exciting innovations. The concept of human-grade pet food, made with ingredients suitable for human consumption, is gaining attention. While it currently represents only a small portion of the market, there is growing interest in providing pets with high-quality, human-grade food.
In conclusion, the pet food industry is experiencing remarkable growth, with increasing consumer spending and a rising number of pet-owning households. Millennials are driving the market, prioritizing premium food and services for their beloved pets. Emerging trends, such as human-grade pet food and plant-based options, are reshaping the industry. By staying informed and adapting to these changes, retailers can continue to meet the evolving needs and preferences of pet parents in this thriving market.
