The largest pet-owning group in the United States, the millennial generation, seems to be replacing babies with cats and dogs, which potentially sets up the U.S. to follow trends seen in Japan, said Maria Lange, business group director for market research firm GfK, at Petfood Forum 2017 on April 4 in Kansas City, Missouri, USA.
“Millenials are 77 percent more likely to have a pet when they are unmarried and not a parent,” she said. “If that trend continues, we may see a similar trend to what we’re seeing in Japan…Japan has more pets than they have children. Maybe that is a trend that the U.S. may follow in the future.”
More that 35 percent of millennials in the U.S. now own pets, up from approximately 20 percent in 2007, and that figure seems likely to continue rising, she said. Over the same past decade, baby boomers’ pet ownership rate has dropped from more than 40 percent to near 30 percent. Generation X continues to be the pet food industry’s lost generation with a stagnant pet ownership rate of less than 25 percent.
Lange’s research discovered that many millennials think of pets as practice for having a child. Just as parents often care more about the quality of their children’s food that their own, millennial pet owners share strong concern for the well-being and health of their pets, she said. Millennials demand transparency, quality and nutrition in their own food; likewise, they prefer to buy healthy, sustainable pet food.
What consumers want to feed babied pets
Thinking of pets as children creates opportunities for the pet food industry to produce premium products, especially those marketed as natural, she said. At the same time, it raises the stakes on demands for safe, nutritious pet foods.
Since the melamine recalls of 2007, the natural pet food market has grown dramatically as consumers demand greater transparency from pet food companies. Today we have a variety of high premium products that could be compared to a five-star meal, she said.
“Natural...this is the base for the industry,” Lange said. “Everything seems to be natural. Natural has spread further in all the channels where we can buy pet food. Grain-free, limited ingredient, raw/frozen and freeze-dried food, every single category has seen rapid growth over the past five years -- some of them more than doubling in size.”
Marketing to millennials seems to pay off. For example, grain-free pet food sales have increased by 221 percent from US$1.4 billion in 2012 to US$3.1 billion in 2016.
Increasing pet food retail price accompanied demand for natural foods
Prices have increased along with demand for natural, premium foods. Lange presented data that the average price per pound had increased by 40 percent since 2011. In 2011, the average price per pound stood at US$1.71. By January 2017, the average price had climbed to US$2.40.
In 2016, U.S. pet retail sales of dog food hit US$6.4 billion and cat food sales reached US$1.6 billion, she said.
While sales appear strong, the way consumers buy pet food is changing along with the generation, she said. Millennials tend to use the internet, social media and similar technologies more than previous generations. For retailers, that means they need to be mindful of e-commerce and be ready to provide services to compete with internet-based retailers like Chewy.com and Amazon. For pet food brands, the wired millennial generation means developing relationships with consumers, while providing background info on ingredients, sustainability and supply chain ethical issues.
Petfood Forum 2018
Petfood Forum 2017 was an exclusive event serving pet treat and pet food manufacturers. At Petfood Industry’s 25th Anniversary edition of Petfood Forum, attendees learned about the latest in pet food research and marketing from speakers including Randi Zuckerberg and Temple Grandin.
Petfood Forum 2018 will take place at the Kansas City Convention Center in Kansas City, Missouri, USA on April 23 -25 , 2018.
