In 2013, the US petfood industry was a US$11.8 billion business,
with the pet shop and veterinary clinic segments seeing significant growth
(6.5% year-over-year and 7.6% year-over-year, respectively). According to GfK,
a research company that monitors pet specialty trends in the US, pet shops
contributed the majority of that number, US$7.3 billion, while vet clinics
(US$1.5 billion) and farm feed ($US3 billion) rounded things out.
are contributing to the industry’s growth, but pet treats in particular are a
solid bet right now. In the four quarters of 2013, dog treats grew 11.4%
(Januaryâ€“March), 11.7% (Aprilâ€“June), 10.4%
(Julyâ€“September) and 7.9% (Octoberâ€“December), according to GfK. Cat treats were
similarly profitable, growing 7%, 8.7%, 8% and 7.8% in the four quarters of
2013. Dry cat food contributed the least growth, with increases of less than 3%
in each quarter (see Table 1).
In the 12 months through May 2014, pet treats in the US brought in
a total of US$884 million, according to GfK data released in June. Dog treats
brought in the bulk of that number, with US$795 million, while cat treats
brought in US$88 million.
products continue to be hot sellers right now, as more and more consumers see their
pets as members of their families who deserve the best petfoods they can
find—and turn to specialty foods to fulfil that idea. Natural petfoods are
driving category growth, according to GfK, at 11.7% year-over-year, and account
for US$4.6 billion in sales annually.
Two-thirds of all dog food sales were natural in 2013, as well as
41% of all cat food sales. In the 12 months through May 2014, natural dog
products brought in US$4 billion, growing 8.8% from the previous 12 months.
Natural cat products brought in US$636 million, a growth of 10.6%.
In 2013, natural products for dogs out-sold non-natural products
in all three of the main categories (dry food, wet food and treats), though the
largest opportunity for growth remains in the treats category (see Figure 1).
For cat products, non-natural still dominates, leaving plenty of opportunity
for future growth in all three categories (see Figure 1). Both cat and dog
natural products are trending upwards: In May 2013, natural dog products
claimed 65.7% of their market share; that number increased to 68.3% by May
2014. Cat natural products had just 39.4% of their market share in May 2013, a
number which increased to 42.3% by May 2014, according to GfK.
down further, grain-free, limited ingredient and freeze-dried petfood diets
are growing significantly, largely within the natural market where most of
those products fall.
Sales for grain-free petfood diets are growing rapidly, according
to GfK data, at 32.4% year-over-year, and account for US$1.96 billion in sales
annually. More than a quarter of all petfood sales are generated by grain-free
products (steady growth from 12.8% in the beginning of 2011 to 25.9% at the end
of 2013). In the 12 months ending May 2014, grain-free dog food brought in
US$1.6 billion, while grain-free cat food brought in US$362 million.
Limited ingredient diets continue to grow as consumers become more
aware of their pets’ specific needs. In the 12 months through May 2014, the
segment contributed US$564 million to the market, growing by 22.8%. Dog food in
this category brought in US$564 million (22.8% growth year-over-year) and cat
food brought in US$34 million (23.6% growth).
Freeze-dried products grew 74% between the beginning of 2012 and
the end of 2013, according to GfK. Despite contributing just US$59 million to
the overall US petfood market (relatively small compared to the larger
specialty segments), growth is significant: 49.7% overall in the 12 months
through May 2014. Dog food once again came out in the lead, with US$51 million
and 50.9% growth, while cat food in the freeze-dried segment brought in US$8
million and 42.3% growth.
awareness of their pets reaches an all-time high, the petfood industry can
expect such markets to continue to provide huge opportunities for growth.
Natural and grain-free will surely maintain their dominance, but the even more
specialized segments within those categories are well worth looking into.
Total petfood retail sales in the 12 months through May 2014
reached US$7.37 billion, 4% growth year-over-year (see Table 2). Foods that
fell under “general health” contributed US$5.5 billion of that, with the
category seeing 3.5% growth. However, more specific segments that may seem
relatively small in dollar contributions saw significant growth, including
allergy diets (which saw 22.4% growth through May 2014) and joint/mobility
formulas (20.9% growth). Others lost momentum (formulas focusing on skin health
dropped 22.7%, hairball formulas by 7.5% through May 2014) and some saw
moderate growth (urinary/bladder health formulas, 3.8% growth).
The smaller trends within the larger picture may be the keys to
success in an increasingly diverse setting of petfood offerings, but it’s
certain that the specialty market overall is a good place to be.