Several leading players in our Top Pet Food Companies Database experienced significant growth in 2021. For many, their revenue increases came largely from mergers and acquisitions (M&A), which remained robust last year.
None of the consequential issues facing the industry (indeed, the world) now—soaring inflation, supply chain disruptions, labor shortages and upheavals, a pandemic, war in Europe for the first time in 80 years—seem to slow down pet food M&A, or market growth for that matter.
In the U.S., for example, final sales data for 2021 reveal the pet care industry reached a new mark, US$123 billion; pet food alone hit US$51 billion, also a new milestone, according to Packaged Facts. The market significantly outperformed even the most bullish projections, and that is expected to continue: 14% for pet food by end of 2022, reaching $US58 billion, and 10% for 2023, up to US$63 billion, according to David Sprinkle, director of pet market research at Packaged Facts.
Other pet food markets have similarly strong data to share, as evidenced by the companies highlighted in this issue. Yet, it would be short-sighted not to recognize the serious headwinds the industry is facing and the impacts those are having. Pet food manufacturers and marketers are dealing with rising costs and starting to have to pass them along to consumers. And, despite many pet owners’ willingness to pay almost anything to keep their furry family members healthy and happy, they may have a limit.
During a Petfood Forum 2022 presentation, Sprinkle shared data showing that most of the surge in U.S. pet adoptions during the pandemic—and the accompanying rise in pet food spending—came from households with higher incomes who own their own homes, are less likely to have children at home and have higher education levels. Conversely, among households with lower incomes and education levels who are more likely to be renters and have children at home, pet ownership and spending actually declined.
Similar patterns emerged in other markets during the pandemic, and all bear watching. Still, Packaged Facts and other market experts have reasons for their rosy projections, including the continuing rise of e-commerce. The vigorous growth displayed by the world’s pet food leaders is another sign that the industry seems able to weather just about any storm.
