The world is dealing with a lot at the moment, and no person, region, or industry—pet food included—can completely escape all problems. But maybe we can pause for at least a few minutes to celebrate how well the pet food and pet care markets in the US are doing despite all the events of the past two years?
Final sales data for 2021 reveals that the pet care industry in the United States has reached a new high, US$123 billion; Pet food alone has been valued at US$51 billion, which is also a new milestone, according to the American Pet Products Association (APPA) and Packed Facts. (Note that the pet food APPA number is slightly lower at $50 billion.)
Industries have significantly outperformed even the most bullish forecasts – what’s more, the forecasts for 2022 and 2023 remain very positive. However, it doesn’t look as if any of the headwinds facing the industry, pet owners and everyone else are dying. Can this strong performance continue?
First, the good news
“After a big year in 2020 when the industry first crossed $100 billion in sales, APPA was optimistic that it would see continued strong sales in 2021, and predicted growth would approach 6% and total sales would reach $109.6 billion by the end of the year. Read the APPA press release. “The actual data even beat the bullish estimates at 13.5% year-over-year growth.”
For pet foods, the largest segment of the overall pet industry, sales increased nearly 15%, according to Packaged Facts. (APPA pegged the segment growth at around 13.6%, likely due to its slightly lower overall sales.)
David Sprinkle, director of pet market research at Packaged Facts, expects similarly strong increases for 2022 and 2023 of 14% and 10%, respectively. That would put US pet food sales at US$58 billion by the end of 2022 and US$63 billion by the end of 2023. For pet grooming in general, its forecast is US$137 billion for 2022 (13% higher than in 2021). ) and $151 billion. for 2023 (an increase of 10%).
(NB: Sprinkle will present this data, along with ideas and drivers for growth, at Petfood Forum 2022 on May 3.)
Not all sky is blue in the future
I would be remiss in sharing all this positive statements and rosy expectations without acknowledging that none of the problems in my first sentence above will go away any time soon. Because of many of these issues, pet food manufacturers and marketers are facing rising costs and starting to pass them on to consumers. And while many pet owners have an absolute dedication to their furry family members and are willing to pay just about anything to keep them healthy and happy, they may have a limit.
While APPA’s latest COVID-19 pulse study, conducted in February 2022, found that US pet owners’ concerns have diminished, and some remain, my colleague, Tim Wall, reports. “Even among owners of younger pets, financial concerns influenced pet food purchasing decisions to a lesser degree than during the onset of the pandemic or the omicron increase,” he wrote. “However, economic concerns still swirled around nearly half of the survey respondents.”
These respondents may fall into the most vulnerable demographic groups. Sprinkle said new facts-packed Simmons and MRI data show that most of the increase in pet adoptions during the pandemic — and a concomitant increase in pet food and spending — came from higher-income, home-owning families, who are less likely to have children at home. They generally have higher education levels and similar characteristics. Conversely, among families with lower incomes and education levels more likely to rent and have children at home, pet ownership and spending actually declined.
However, the facts packaged have other reasons for its bullish outlook, including the continued rise in e-commerce and how this has contributed to the continued convergence of the consumer market in general, especially the human food category, and pet food. “The internet is bringing the entire consumer market closer to the pet food market,” Sprinkle said, noting the “increasingly human market collapse of the pet food market” in new ways, which younger pet owners seem particularly welcome.
Will these trends be enough to offset any negative signals? It is definitely a stand worth seeing.