Let’s start with the good news: US dog and cat food sales continue their heady pace of double-digit growth each year — for example, sales in 2023 will reach nearly 14%, worth US$51 billion in 2022 figures to be around US$44.8 billion, per data from Packaged Facts. The 2022 total represents 12% growth over 2021.
But in its most recent report, “Pet Food in the US, 17th Edition,” Packaged Facts warns that for the first time in recent history, increased growth in dog and cat food sales is almost entirely driven by higher prices, aka inflation, “rather than by historical growth of this market, the premiumization.”
David Sprinkle, Packaged Facts’ director of pet market research, previously mentioned the role of inflation in discussing sales growth in 2022, but it seems to have a bigger impact now. The new report includes data from a September/October 2023 survey of US pet owners showing that one-third have changed pet foods in the past 12 months; of those, 32% of dog owners and 28% of cat owners said they traded down on lower-priced products.
Pet food inflation is slowing, but prices are still higher
While US pet food inflation has declined on a year-over-year basis since late spring 2023 — for October, it stood at 6.5% YOY, down from 7.6% in September and below half of the 15%+ high it reached in late 2022 /early 2023 — prices are nearly 23% higher than in October 2019, before the pandemic. (Inflation data comes from the US Bureau of Labor Statistics via John Gibbons of PetBusinessProfessor.com, who helpfully compiles and analyzes pet industry numbers each month.)
Considering that the prices of human food (ie, groceries) have increased by 25.77% since October 2019, consumers are definitely feeling the pinch. “With prices of basic human foods such as eggs and butter doubling and tripling, pet buyers have cut back on even the lowest discretionary pet food category on the market,” said the colleague of Sprinkle David Lummis, lead pet market analyst for Packaged Facts, in a May 2023 article in “Pet Product News.”
Recent survey data about pet owners trading in lower-priced pet foods reflects feedback from February 2023, when another Packaged Facts survey showed 42% of pet owners US dog owners and 44% of cat owners cited the high cost of pet food as one of the most important challenges to pet ownership. Of course, that’s on top of the other high costs of pet care, including veterinary and medications, as Sprinkle demonstrated during the Petfood Forum 2023 session. In addition, Packaged Facts data from January to August 2022 indicated that spending on pet food increased for 28% of US pet owners.
Even the ‘rich feel the bite,’ but pet food sales are expected to increase
It’s tempting to assume that many, or even most, of the pet owners who are experiencing significant pain from higher pet food prices are in lower income brackets, but that may not be the case. In his May article, Lummis quoted a Wall Street Journal article from February 2023 in which one expert commented: “The US may still avoid a recession, but it’s in a ‘richcession.’ That’s when, amid economic uncertainty, the wealthy feel the bite the most.
I remember a long time ago, before the pandemic and this highly inflationary period, when I and others in the pet food industry wondered if there was a limit to premiumization, a limit to how much even the rich pet owners will spend on their pets. food Recent data suggests we may have reached this.
Fortunately, the market is trading from a foundation of strength. “Underpinnings like ‘pets as family’ and health and wellness will keep the pet industry strong,” Lummis predicts. To that end, Packaged Facts instead projects dog and cat food sales in the US to increase at a compound annual growth rate of nearly 10% through 2027, meaning they will reach US$73 billion in that person
