Packaged Facts: $27 Billion U.S. Pet Food Market Facing Major Headwinds as E-Commerce Upends Traditional Retail

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Jul 01, 2019, 10:07 ET

ROCKVILLE, Md., July 1, 2019 /PRNewswire/ -- No minor feat in a mature market worth upwards of $27 billion, U.S. retail sales of dog and cat food held steady and grew in 2017 and 2018, and the upward momentum has persisted into 2019, according to market research firm Packaged Facts in the report Pet Food in the U.S., 14th Edition.

"For pet food, retail, marketing, and new product initiatives are hopping," says David Sprinkle, research director for Packaged Facts. "And from a merger and acquisition perspective, the past couple of years have been nothing short of dynamic."

This positive state of affairs belies, however, that the market is facing enormous headwinds. As in almost every consumer product category, e-commerce continues to upend traditional retail as more pet owners opt to buy their pet food online instead of, or in addition to, from brick-and-mortar sellers.

For pet food, a side effect has been to speed up the dissolution of the pet specialty/mass channel divide that has long helped to justify the "superpremium" prices of brands sold only by pet specialty retailers, which have for years bolstered dollar sales absent volume growth by converting pet owners to higher-priced fare. At the core of this premiumization trend have been natural products including grain-free formulas, which have driven pet food sales growth for over a decade.

Now, however, virtually all pet food brands are available online, accelerating the "mass premiumization" trend whereby pet-specialty-type products are now widely available in the grocery and mass channels. As online sellers including Amazon, Chewy, and Walmart battle it out, including via private labels, the upshot is downward pricing pressure market-wide even as the costs of producing pet food continue to rise. Since the dog and cat population is not growing enough to provide much of a volume lift, pet food marketers and retailers will have to come up with new and compelling premiumization drivers in order to maintain dollar sales gains.

About the Report

Drawing on more than 20 years of experience in analyzing the pet food industry as well as Packaged Facts' broad cross-category expertise, Pet Food in the U.S., 14th Edition pinpoints strategic directions for current and prospective pet food marketers, with a forward-looking focus on high-growth product segments and market drivers. Covering foods for dogs and cats, the report examines trends by form (dry, wet, semi-moist, and frozen/refrigerated), ingredients, and product claims across the full retail spectrum including mass-market outlets, the pet specialty channel, online retailers, and other channels. It provides a comprehensive overview covering historical market size and projections (2014-2023); cross-market trends; consumer expenditures; market opportunities; mergers and acquisitions; channel trends including e-commerce and omnichannel; the Millennial impact; and new product and marketing trends.

View additional information about Pet Food in the U.S., 14th Edition, including purchase options, the abstract, table of contents, and related reports at Packaged Facts' website: https://www.packagedfacts.com/updates/pet-food-market.

A companion report, International Pet Market Perspectives: Trend and Opportunities in Pet Food, is available for purchase: https://www.packagedfacts.com/updates/International-Pet-Food.

About Packaged Facts

Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.

For more essential insights from Packaged Facts be sure to follow us on Twitter (@packaged_facts), LinkedIn, and YouTube.

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SOURCE Packaged Facts