Adventures in Pet Food

Debbie Phillips-Donaldson, editor-in-chief of Petfood Industry, shares her insights and opinions on all things pet food, addressing market trends as well as news and developments in pet nutrition, food safety and other hot topics for the industry.
Pet Food Market Trends Coronavirus and Pets
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Pet food by the numbers, 2020 edition

Amazon shipped 127.1 million bags of pet food this year, according to an ad it published in a recent issue of Time magazine. This is just one noteworthy number in a year full of them—mostly distressing ones for the world in general—an annus horribilis that words can no longer capably describe. But at least we can celebrate some positive pet food numbers:

  • 5: types of consumer goods shipments, including pet food, in the Amazon ad; the others listed were hand sanitizer bottles, diapers, toilet paper and grocery products. (The ad doesn’t say if these shipments were for U.S. customers only.) To me, its inclusion among these other 2020-necessary items indicates Amazon considers pet food an essential good.
  • 39%: Amazon’s share of online pet food and supplies sales, according to data from IBISWorld, likely meaning the category is also an essential part of its business.
  • 47%: increase in sales for Chewy, Amazon’s chief competitor (at least in terms of pet e-commerce), recorded in its fiscal year second quarter—about US$1.7 billion in that quarter alone – according to its earnings report. (These and the Amazon data were shared by Capstone Headwaters, an investment firm, in a recent report.)
  • 27%: e-commerce’s share of the U.S. pet food market in 2020, Packaged Facts said. Pre-pandemic, the market research company projected the share to hit 24%—by the year 2025. Now pet food e-commerce is expected to hit 35% by then.
  • US$31 billion: projected pet food sales for the U.S. in 2020, according to Packaged Facts, representing a 7% increase spurred by that e-commerce boom as well as a rise in pet adoptions. The sales total includes dog and cat food, plus mixers and toppers, but not treats.
  • 25%: approximate portion of U.S. dog or cat owners who added a pet this year. A late 2020 survey conducted by Packaged Facts showed that most new pets were acquired or adopted outside of a formal pet shelter or animal rescue organization, at 15% for dog owners and 17% for cat owners, compared to 12% and 14%, respectively, adopting through a formal organization.
  • 5%: increase for global pet food sales in 2020, projected by Euromonitor International, which said pet treats would rise 8%.
  • 9.5%: share of “kibble plus” pet foods (dry products with freeze-dried pieces) in the U.S. pet specialty channel, according to Nielsen; 100% freeze-dried pet food had a 2.4% share and 100% dehydrated, a 1.4% share.
  • 13.3%: sales growth in August for freeze-dried pet food in U.S. pet specialty, Nielsen said. Freeze-dried sales in the U.S. followed the general pet food sales roller coaster this year of a huge spike in March (during initial COVID-19 lockdowns), a decline a month or two later, then a rebound in summer. Frozen pet foods also increased about 13% in August in pet retail.
  • 25+: number of pet food merger and acquisition (M&A) deals in 2020, including among suppliers—another sign of the market’s resilience during economic downturns. Though M&A activity in pet food decreased 10.3% overall in 2020 compared to 2019 (by end of the third quarter for both), according to Capstone Headwaters, there was a flurry of deals in the last few months, including A&M Capital Partners acquiring a majority interest in BrightPet Nutrition in October, TA Associates buying Mid America Pet Foods in December and Layn Natural Ingredients acquiring Wagott (a Chinese exporter of green tea extract) also in December. Those were in addition to one of the biggest announcements of the year: J.M. Smucker selling its Natural Balance brand.

 

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dphillips@wattglobal.com

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