The Market is the world leader in the pet food domain, with the pet food market sales of about $22.26 billion in 2014. The pet industry, pet foods being a major part of this, is forecasted to grow into a $69.6 billion industry by 2022 with a CAGR of about 2.6% from 2015 to 2022. Growth in the segment is expected to pick up with the improvement of the economy.
The recent rise of pet humanization wherein pets are treated with increased care and hygiene is proving to be a major driver for the market and is leading to major changes in product packing and resourcing of ethically viable products. The development of private labels stores focusing on unique and locally sourced products to increase their overall appeal, and the increasing density of nuclear families are the other major drivers of the market. The increase in penetration of e-commerce sector is proving to be a major opportunity for the low cost marketing for the innovative and novel product line developed by these emerging companies.
The US pet food markets are characterized by their high level of consolidation, low reliance on imports, and heavy competition; with over 70% of the pet products being manufactured by five companies and over 85% of their domestic need being satisfied by domestic manufacturers. This has resulted in a high entry barrier for new players, which is a major constraint for the market. Markets are overcoming this by the development of localized manufacturers and by creation of many private label stores. The growing incidence of pet obesity is causing most consumers to limit the calorie and food content; this is proving to be a dampener for the industry. The other constrains include the increased allergic reactions to pets, fierce competition from online vendors, governmental regulation and a challenging economy.
The US pet food industry is segmented into dry food, wet food, snacks, veterinary food, liquid food, and organic food. Dry food is the largest segment accounting for a large part of total market share, followed by snacks and wet foods. The free-from products such as grain free, soy free, and low grain products are gaining a major foothold in regard to the increasing health consciousness among consumers. The market is further segmented based on animal type dog and cat foods occupy the largest market due to their increased domestication and appeal. Much of this growth is prompted by the large interest in pet ownership in US households owing about 83.5 million dogs and 95.4 million cats. Pricing and sales mechanism wherein the internet sales are gaining a strong hold, are the other major segments. Some of the major players in the American pet food market are Nestle, Proctor & Gamble Co., Del Monte Foods Co, Mars Inc, and HILL’s Pet Nutrition. The American market space is based on following trends and aggressively adopting them with a specific and targeted pricing scheme.
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