From Petfood Industry:

In an article in Petfood Industry in 2007, Tim Phillips, DVM, identified grain free as a new niche in the pet food market.

Along with fresh chilled, raw, organic, human-quality ingredients, natural, exotic ingredients, superpremium, ultrapremium, home-cooked meals fortified with supplements, meat-centric and protein-focused diets, grain free was called a growing niche. There are also niche diets for skin health, gut health, dental health, urinary tract health, weight management, puppy trainability, large breed puppies, performance, seniors, and pets with allergies.

Recent data from GfK shows that grain-free dog and cat food now accounts for one-third (34%) of all pet food sales, and 48% of the “natural” category.

Overall, grain-free SKUs brought in $2.6 billion in the past year (October 2014 to September 2015), a growth rate of 25%. Dog items accounted for $2.1 billion of those sales, with grain-free dog treats spiking a remarkable 43% year over year. And grain-free items now represent 46% of all sales in the Dog Wet category.

In some ways, grain-free’s success is a matter of sheer quantity; 45% of all pet food items introduced in the past year were grain-free – 1,557 new products, compared to 1,355 during the previous 12 months.

Another reason for grain-free’s elevated revenue is the category’s hefty price per pound – $3.01, on average; that is 26% higher than the overall pet food figure of $2.39 per pound.

Finding your next niche

New science, pet humanization and competition challenge formulators