The August 2017 issue of Petfood Industry explores how the top five pet food companies have faced legal challenges but still increased annual revenues since the last update of the Top Pet Food Companies database.
Freeze-dried petfood and treats are not at all new, nor are baked dry petfood products. What is new is that now larger petfood players are investing heavily in these less traditional formats for their petfood product development. Witness several major new product launches at Global Pet Expo (GPE) 2015.
For example, Wellness made a big splash with its new TruFood brand, featuring four formats for both dogs and cats, including Baked Blends, slow-baked dry diets with whole prey and raw produce, and freeze-dried Raw Goodness Treats. Similarly, Wellness expanded one of its existing lines, grain-free Core, with air-dried toppers and wet products comprised of pate surrounding gravy and cuts (called Chunky Centers).
A few aisles away, Merrick Pet Care debuted its new "ancestral" line for dogs, Backcountry, with dry products that include freeze-dried raw bits. Company representatives said that later this year, its Castor & Pollux Organix brand would release organic dry products that include freeze-dried raw pieces, too; the booth even displayed a prototype of one of the SKUs. (Merrick also launched a Limited Ingredient Diet line for dogs and cats, and expanded its lower-priced Whole Earth Farms line to include grain-free products for dogs and cats.)
These petfood manufacturers are onto something, based on data from research firm GfK. In a seminar on marketing to Millennials, Maria Lange, Senior Product Manager for GfK, presented 2014 sales data for specific categories of petfood in the US pet specialty retail channel. While still a small category at only US$74 million in 2014 (just 1% of the petfood market in that channel), sales of freeze-dried petfoods and treats increased 43.7% from 2013. After the presentation, Lange told me she believes this category will continue to grow robustly and that the new petfood launches at GPE supported that projection.
Other rising petfood categories in US pet specialty for 2014 included grain free (23.9% sales growth), fresh/raw (18.2% growth) and dehydrated (35.1%)—though Lange stressed that the dehydrated data (including 2014 sales of US$10 million) comprised petfood only; dehydrated treats actually declined in sales last year. Sales of seasonal petfood and treat items soared; for example, Halloween-themed items grew 178% from 2013 and Christmas items, 121%. Lange projects growth of seasonal items to continue, too.
Grain-free petfood sales reached US$2.2 billion in 2014—a 30% petfood market share in US pet specialty—and accounted for four of every 10 new items. Natural petfood sales hit US$5 billion, a 67% market share, with growth in the single, yet healthy, digits at 7.4%. These products accounted for eight of 10 new items. (I believe GfK classifies grain-free as a sub-category of natural.) Lange will present this and other petfood data, projections and trends at Petfood Forum 2015.
As for the entire US petfood market, the American Pet Products Association (APPA), organizer of GPE, released data showing that sales totaled US$22.6 billion in 2014, a 3.2% increase over 2013. For 2015, APPA projects the market to grow another 3.5% to US$23.04 billion.
Other new products, trends and notes