Retail sales of dog and cat food in 2018 may have risen 4.3 percent over 2017’s total to reach US$27.15 billion in the United States, wrote Packaged Facts analysts in "Pet Food in the US, 14th Edition.” Online sales of pet food served as a major driver for overall industry growth in 2018. However, e-commerce continued to chip away at brick-and-mortar retailers’ share of the market, and now threatens established brands with private label pet foods from Amazon and Chewy.
Dry dog food remains largest segment of market
Across all retail outlets, dog food dominates with 67 percent of sales. Dog food retail sales hit approximately US$18.2 billion in 2018. Cat food retail sales in the U.S. totaled US$9 billion.
In both dog and cat food, dry food held the largest portion of the market with approximately 72 percent and sales value of US$19.6 billion. Wet pet food followed with 25 percent market share and sales valued at US$6.9 billion. Frozen or refrigerated pet food and semi-moist products each made up less than 1 percent of the U.S. pet food market in 2018.
U.S. pet food retail sales by channel
Pet specialty chains, including PetSmart and Petco, held the largest share of retail sales in the U.S. at 23 percent in 2018. Mass-market retailers, such as Walmart and Target, stood in second place with 20 percent of retail market share. Although in third place, Internet-based pet food sales grew rapidly to make up 17 percent of the 2018 pet food market in the U.S.
Amazon, Chewy private label pet foods threaten profits
Part of the way internet retailers gain market share is by producing their own brands of dog and cat food. Packaged Facts analysts agreed with an earlier report that private label pet foods from Amazon and Chewy threaten established brands by leveraging their online sales platform to boost visibility.
As more pet owners look to purchase pet food over the internet, online retailers increasingly have opportunities to boost exposure of their own brands by featuring those dog and cat foods in sponsored advertisements, on homepage displays and through other means, wrote Gartner L2 analysts in the report “Digital IQ Index: Pet Care U.S. 2018.” The ability of online retailers to undercut premium pet foods with their own brands threatens the profitability of pet food premiumization, which currently drives pet food sales value growth while volume growth stagnates.