The state of global pet food: reaching new heights

Pet humanisation trends drive continued growth

The global pet food market grew by 6% in 2018 – its strongest performance in a decade. Pet food continues to stand out amongst consumer packaged goods (CPG) industries for its strong consistent growth. Since 2005, the global industry has grown 92% and has not posted growth of less than 4% in any year. 

Pet humanisation trends are the driving engine behind this growth. As owners increasingly view their companions as a family member, they are willing to spend more on premium, high-quality. 

This ‘premiumisation’ trend is evident in rising average prices. Despite dollar growth of 6% in 2018, global volume sales grew less than 3%. At the same time, premium dog and cat food was again the fastest-growing price tier in the industry, rising nearly 7% in 2018. 

Emerging markets propel the industry

Emerging markets have become a key contributor to global growth. In 2018, Asia, Latin America, Eastern Europe, the Middle East and Africa were the fastest-growing regions in pet food, posting dollar growth of 13%, 12%, 9% and 8%, respectively. As economic growth creates a new base of middle-class consumers in countries like China, India, Indonesia, Brazil, Vietnam and Mexico, many are becoming first-time pet owners or are buying commercial pet food for the first time (in place of table scraps). 

As a result, emerging markets are enjoying robust pet population growth. Dog and cat populations are advancing by mid-single or even double-digit rates in many Asian, Latin American and Middle Eastern countries. This is contributing to healthy pet food volume growth in these markets. This trend stands in stark contrast to developed markets where stagnant pet populations and shrinking breed sizes have led to flat volume growth for years. In fact, Asia and Latin America accounted for nearly two-thirds of absolute volume growth in dog and cat food in 2018.

Meat in focus

2018 pet food innovation was centred around meat. Manufacturers relied upon the content, sourcing, and processing of meat claims to drive premium-led growth.

Wild diet foods that draw parallels between pets and their wild ancestors (that is: wolves) continued to gain traction.  As this trend evolves, a ‘meat-first’ claim is no longer enough. Brands are now listing meat content as a percentage of total ingredients as a key selling point. Mars, for instance, brought Nutro Wild Frontier to Germany (2018). The brand claims that 90% of its content comes from animal proteins in large font, directly beneath imagery of wild animals. 

Locally-sourced meat is also a focus area. Consumers tend to trust locally-sourced products and are willing to pay a premium for them. In Finland, local sourcing is a primary selling point for Eläinruokatehdas Lemmikki Oy. Their new brand Oscar became the market’s only domestically-made dry cat food in 2018. Products that utilise locally-relevant ingredients like yak milk treats in India (Khanal Foods) and shark cartilage treats in Australia (Next Generation Pet Food) are part of this trend.

Meat processing is another important component of innovation, particularly in the form of raw food. Biologically Appropriate Raw Food (BARF) diets gained traction globally in 2018, with products in dehydrated, frozen or freeze-dried formats. Raw foods have exploded in popularity within developed markets like the US, but these are making headway in emerging markets as well. Companies like Gambol Pet Group (China), Bleiz Canine Nutrition (Mexico), Peluditos BARF (Colombia), Patagon Raw (Chile), Carna4 (Hong Kong) and Bone and Raw Group (Thailand) have grown by innovating with BARF diets in emerging markets. 

A bright outlook

Moving forward, the industry outlook remains bright. Innovation in premium food remains strong on many fronts, while emerging markets offer tremendous potential. For this reason, Euromonitor projects strong continued growth in global pet food, with a compound annual growth rate of nearly 5% in constant dollar terms between 2018 and 2024.