The US dry petfood production industry declined at an annualized rate of just 1.9 percent to US$9.8 billion over the five years to 2012, according to a new report from IBISWorld.

The "Dry Pet Food Production in the US: Market Research Report" says that while consumers refrain from purchasing pets during times of economic hardship, pet owners typically do not sacrifice purchases of petfood during these times. As a result, the dry petfood production industry exhibits a delayed cyclical trend, with revenue declining a couple of years after consumers stop purchasing pets, according to IBISWorld industry analyst Justin Waterman. Revenue fell heavily in 2010 and 2011, due to fewer animals to feed. But, with an all-time high 173 million dogs and cats in the US in 2012, revenue growth is forecast to fall 2.2 percent in 2012, then rise from 2013 through 2017.

The industry has experienced an increasing level of concentration over the past five years, resulting from expansion through acquisitions, which are expected to continue. The major companies include Nestle SA, Mars Inc. and Colgate-Palmolive Company. However, there will remain room for niche players like organic dry petfood producers, the report says. The full report can be purchased online.