Worldwide production of dry pet food reached nearly 25 million metric tons (MMT) in 2016, rising a healthy 10.6 percent over 2015 production, according to Alltech’s Global Feed Survey 2017. Dry pet food production is particularly increasing in developing markets and regions of the world.
Alltech released its latest report showing that overall global feed production, for all species, passed the 1 billion MT mark for the first time ever, and that was with 7 percent fewer feed mills worldwide as the milling business has consolidated and mills have become more efficient. Over the past six years, global feed production has grown a cumulative 19 percent. In terms of value sales, Alltech estimates feed production has reached US$460 billion.
Of the total volume of feed produced globally, pet food’s 24.98 MMT accounted for about 2.5 percent. That’s far below the shares for production animals, of course; poultry feed alone comprised nearly half (44 percent) of global feed production. Yet the survey shows pet food on the rise, and that’s with the most complete set of data that Alltech has been able to collect in its six years of conducting this survey. While Aidan Connolly, Alltech’s chief innovation officer, said his sales team collecting the data still faced challenges with the industry’s competitiveness and pet food producers’ reluctance to disclose numbers, he and his team believe the increases in pet food are real.
Dry pet food’s biggest gainers
Among the top 10 largest markets for dry pet food production, clear winners in terms of increases included mainly countries in Europe – France, UK, Germany and Hungary – along with China and Canada. Growth for those markets ranged from 52 percent to a whopping 356 percent, with production volumes ranging from 0.7 to 2.3 MMT. France alone gained more than 1 MMT year over year.
Brazil, the second largest dry pet food producer globally, and Mexico enjoyed much smaller increases: 2.9 and 2.2 percent, respectively, with volumes of 2.5 and 0.92 MMT, according to Alltech’s data. The US – the largest dry pet food producing country by far, at 8.085 MMT – saw a 4.3 percent decline, and Italy declined by 21 percent (to 0.6 MMT).
Again, some of these changes may be a matter of reporting: Alltech being able to find much more comprehensive and accurate data for 2016 versus 2015. Yet, in a separate communication with me, Connolly cited other possible reasons for the differences.
“My sense is that pet food reflects multiple factors,” he said. “As an underdeveloped country develops, the volume grows; the middle class in a developing country expands in value; and a highly developed country increasingly exhibits prosumer behavior where the consumers’ beliefs are reflected in their choices.”
Indeed. For example, in the US pet specialty channel, where premiumization rules, sales have been increasing for pet foods with higher prices and, often, lower volume (particularly products for smaller pets and those with higher density). The fastest-growing, most popular product categories in that channel include grain-free dry foods and “kibble plus” pet foods (traditional dry products with freeze-dried or dehydrated bits); limited ingredient diets; and small/toy-breed dog foods. Their growth contributed to a cumulative 29 percent rise in value sales from 2011 to 2016 yet a 4 percent decline in volume sales during the same period, according to data from GfK.
Global pet food sales growing, too
While Mexico’s growth in dry pet food production was modest, Connolly cited the country as one of the fastest-growing feed production markets, now contributing 20 percent of Latin America’s overall feed production. On the consumption side, Mexico is also one of the fastest-growing pet food and pet care markets globally. Ivan Franco, founder of TripleThree International, a market intelligence company based in Mexico, reported in December 2016 that the country’s dry pet food volume sales reached a total of 1.16 MMT, reflecting a 3.5 to 4.5 percent increase (depending on the species).
I was happy to see up-and-coming pet food markets like Thailand now reflected in Alltech’s data – with only 0.01 MMT in dry pet food production (possibly another reporting situation), yet still making its way into the survey. And overall, the majority of countries represented in Alltech’s data showed year-over-year increases.
Combined with global pet food sales enjoying a nearly 5 percent gain from 2015 to 2016, according to Euromonitor’s projections, this is all good news for our industry.