Dogs, cats, and other pets are part of our lives. Just as we treat ourselves with healthy foods (mostly), delicious foods, and supplements to live a long life, so should we treat our pets.
The US pet industry as a whole will reach a staggering $147 billion in sales by 2023. The American Pet Products Association (APPA) says the forecast is steady growth each year through 2030.
In its 2024 State of The Industry Report, APPA’s pet industry expenditures cover spending in four main categories: Pet Food & Treats; Supplies, Live Animals & OTC (over the counter) Medicine; Vet Care and Product Sales; and Other Services.
The breakdown of sales within the US market in 2023 is:
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$64.4 billion in pet food and treats
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$32 billion in supplies, live animals, and OTC drugs
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$38.3 billion in veterinary care and product sales
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$12.3 billion in other services (boarding, grooming, insurance, etc.)
“The data showed that the pet industry has remained incredibly strong since 2009 despite widespread economic challenges. Although there are signs of a slowdown, the industry is resilient, especially compared to other industries,” said APPA President and CEO Peter Scott. “In fact, we predict industry expenditures to top $250 billion by 2030.”
6 Findings
These findings are from APPA’s State of the Industry: Strategic Insights from the National Pet Owners Survey:
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Spending in the pet industry remains strong over time. In 2023, the pet industry provided an overall economic contribution of $303 billion, an increase of 16% from $260 billion in 2022.
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Pet care is at the top of the fast-moving consumer goods (FMCG) category — now and before COVID-19 — ahead of grocery and dairy.
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The percentage of households owning pets has normalized to pre-pandemic levels, although the total number of households owning pets has increased over time.
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Consumer changes after COVID have turned into an omni-channel approach, splitting between brick-and-mortar and online modalities.
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Although Millennials remain the largest pet-owning generation, Gen Z is changing the way owners want to know about and buy pet products.
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Younger generations prefer visual media to learn about products, and it will be important for brands to consider this in their top-of-funnel strategies.
APPA researchers predict that pet industry brands that shine on new trends that coincide with the emergence of Gen Z pet owners through targeted marketing efforts will outperform in market.
“Millennial pet owners still provide more pet ownership than any other generation, but the number of Gen Z pet owners is rapidly increasing, ” said Ingrid Chu, vice president of Insights and Research. “While brick-and-mortar is a big driver of awareness of new pet products, social media is equally important to younger generations. Gen Z looks to visual platforms like TikTok, YouTube, and Instagram to learn about new pet products, which tells us that pet brands need to consider more visual media to reach their younger audiences.”
Pet Food Trends
Clarkston Consulting reports that the global pet food industry will reach $147 million and grow at a CAGR of 5.32% through 2028, with the US holding more than one-third of that growth.
The company’s 2024 Industry Trends: Pet Food Report shows trends continuing from 2023 and beyond. Like human food, brand retention, natural ingredients, and other channels than brick-and-mortar are still top of mind for pet owners.
The top 5 global pet food trends are:
1. M&A to drive business growth
Despite slowed M&A activity in 2023, there were more than 25 mergers and acquisitions, including JM Smucker, Natural Balance, and Post Holdings. The main drivers of acquisition activity from major players include the refinement of brand portfolios and the improvement of manufacturing and production capacity.
Acquisitions in 2024 will be affected by fluctuating interest rates and available capital from well-positioned acquirers. Categories in pet treats, supplements, and health will be favorable candidates for M&A activity due to the health-oriented mindset of pet owners.
2. Sustainability with a Twist
Almost 70% of pet owners worldwide are concerned about climate change and make daily choices with this in mind, according to Euromonitor. As such, pet food manufacturers must recognize the direction of consumer preferences and tailor messaging based on what their target consumers value most about sustainability in their pet products. Sustainability efforts range from sustainably sourced proteins to sustainable packaging and efforts towards carbon neutrality.
Focusing on pet food formulas, mushroom-based and insect-based pet foods are gaining more traction than standard meat ingredients.
3. Advanced Pet Wellness
Pet health has become a priority for pet parents and a top driver for the pet supplements category, which is expected to become a $1 billion industry by 2027, reports Grand View Research.
Wearable pet tech, such as radio frequency identification devices, GPS trackers, and motion sensors, is expected to generate $6.88 billion in revenue by 2030 with a CAGR of 14.3%. Beyond wearables, owners are investing in customized food products and toys to keep their pets healthy and active.
4. Omnichannel Retail
Covid-19 has accelerated the online shopping experience with many customers going online, but as in-person shopping habits return, it will be important for manufacturers to ensure they meet customers at all touchpoints of the journey in shopping: online, in store , on social media, and in apps. Pet customers frequently move between channels, with 20% saying they usually start their shopping journey online or in-store but then buy a product in the opposite shopping channel.
Pet customers are also increasingly turning to apps to meet their pet needs. The average time spent on the top 10 pet-related apps has increased by 15 minutes since 2021.
5. AI for Customer Experience
Artificial Intelligence (AI) is permeating the consumer products industry, and pet food is no exception. Pet food manufacturers are exploring use cases for AI to solve consumers’ desire for convenience and efficiency, and to provide the best life for their pets. AI technology is increasingly being used by brands for manufacturing, product innovation, and customer experience to name a few use cases.
Advances in AI will continue through 2024, and as such, pet food manufacturers must evaluate which use cases to explore that will deliver against their strategic goals — whether improving pet satisfaction customers, increase operational efficiency, or more innovation.
Top US Pet Food Companies
This is a place that rarely changes. Many large food companies own leading dog and cat food brands. However, don’t rule out upcoming fresh foods and smaller brands.
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Mars Petcare – Pedigree, Whiskas, Royal Canin, Banfield, NUTRO, Greenies, IAMS, and EUKANUBA, Royal Canin, Acana, Orijen
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Nestlé Purina PetCare – Purina, Friskies, Beneful
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JM Smucker – Milk-Bone, Meow Mix, Rachael Ray Nutrish, Kibbles’ n Bits, and Nature’s Recipes
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General Mills – Blue Buffalo
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Diamond Pet Foods – Diamond, Diamond Naturals, Taste of the Wild, and NutraGold
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Simmons Pet Food (private label)
Smaller brands and other fresh pet food companies include Stella & Chewys, The Farmer’s Dog, Open Farm, Nom Nom, Ollie, as well as many newcomers.
