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Global Pet Food and Treat Market Trends



Some of the key mega trends that will be observed at Interzoo 2010 are listed below with a brief description of how they are influencing the industry. They are not listed in order of importance.

Anthropomorphism



As pet humanization is taken to a new level, there is a growing market catering to the perceived needs of pet owners who think of their pets nutritional and lifestyle needs in terms of their own requirements.

Anthropomorphism is driving:
  • Premiumization
  • Development of pet products with functional and fortified ingredients such as elk antler, cranberries, blueberries
  • Increased demand for human grade pet food and pet products
  • Development of products linked to cultural/religious beliefs i.e. vegetarian pet food or Kosher pet products.

Global Economy - Downturn/Recession



Although the global economic recession has had minimal to no impact on the pet food and treat market, some consumers' purchasing patterns have shifted from a premium products to a "high-end" mid-price or economy product that offers similar benefits they are accustomed to.

Globalization



In the Packaged Facts study "Global Pet Food Industry Outlook" approximately 60 percent of survey respondents viewed globalization as a very important industry development. It involves: information flow between nations, ability to import and export, and regulations affecting trade. Regulation variability between countries causes trade disruptions, restricts product shipments, increase inventory (product and packaging) and creates labeling issues. To further add to the complication of exporting to multiple countries, local regulations are continually being developed and modified making it difficult for manufactures remain compliant.

Packaging



Consumers are faced with the largest-ever assortment of pet food brands and often find it difficult to compare brands, understand ingredient listings, terminology used on packaging and promotional material. As a result, their purchasing decisions are primarily influenced by the retail experience and information contained on packaging. Interzoo 2010 will demonstrate manufacturers' strategies to improve the consumers shopping experience and create brand loyalty.

Premium/Super-Premium Pet Food and Treats



Between 2000 and 2007 the global retail value share of premium cat and dog food sales grew from 37 percent to 44 percent and it is expected to reach 47 percent by 2012. Accounting for the majority of the pet food market in North America and Western Europe, premium brands has become mainstream and therefore more competitive with reduced profit margins. The market ship has been further accelerated by the growth of pet superstores and the increased development of private label premium products. As a result, the most profitable opportunities are now in the development of super-premium products such as products that contain human-grade ingredients or offer targeted health benefits.

Private Label



With the exception of Germany, and to a smaller degree, the US pet food private label products have been limited to the economy segment but they are beginning to develop a presence in the premium and mid-priced segments. In 2007, private label products accounted for:
  • 39.6 percent of the economy dog food and 43.3 percent of the economy cat food sales
  • 4.5 percent of the mid-priced dog food and 7 percent of the mid-priced cat food sales
  • 3.1 percent of the premium dog food and 4.5 percent of the premium cat food sales


The anthropomorphism trend and the global economic recession are a couple of the keys that are increasing the demand for premium private label products. Consumers are looking for more ways to provide their pet with high-end" mid-price or economy products that offer similar benefits they are accustomed to.

Global Market Forecast - 2007 - 2012



The global pet food and pet care products market is predicted to demonstrate a 3 percent compound annual growth rate (constant value), over the 2007 to 2012, reaching US$73.4 billion in 2012. The majority of this growth will be concentrated in developing regions. The projected regional growths from 2007 to 2012 (in constant value terms) are:
  • Eastern Europe (53 percent expected growth) - Russia, is the leader, with a 91 percent forecasted growth of the premium pet food segment (due to strong economic performance increasing the affluence of its middle class).
  • Asia-Pacific (27 percent expected growth) - as urbanisation increases consumers' education, purchasing power, transforms lifestyles and boosts the development of distribution infrastructures, consumers in China, Thailand and India will shift from feeding pets table scraps to purchasing prepared pet food. Main growth will be in economy products.
  • Latin America (25 percent expected growth) Brazil and Mexico are the most prominent markets. Main growth will be in economy products.
  • North America (12 percent, expected growth) - growth will be mainly in specialized products such as functional foods and super premium products.
  • Western Europe (9 percent expected growth) - growth will be mainly in specialized products such as functional foods and super premium products.



Euromonitor International predicts Western Europe and North America's share of the global pet food and pet care products market will decline from 73 percent (2007) to 69 percent (2012), Eastern Europe, Latin America and Asia-Pacific will expand from 24 percent (2007) to 28 percent (2012).