Revitalised pet population growth in developed markets and higher-income households paired with the growing clean label trend are driving demand for natural pet food products that support holistic health and increase life quality.
To meet this demand, new processing methods and alternative formats such as fresh cooked and ‘new wet’ which include stews, broths, and soups, are growing in popularity.
New pet food formats are gaining ground worldwide
Regardless of the impacts of rising global inflation, pet care has remained a “recession resistant” industry over recent years with year-on-year growth reaching around 8% compared to real GDP growth of -3% in 2020, according to Mark Strobel, senior research manager at Euromonitor International.
Dry kibble makes up three quarters of the global retail volume share of pet food, yet with premiumisation a rising trend globally, new formats including ‘new wet’, fresh cooked, and raw are experiencing significant growth. A Euromonitor survey conducted in early 2023 found that one third of US pet owners regularly opt for wet food, while 12% feed their pets raw food almost daily.
Fuelled by these demands and increased market penetration, premium wet dog and cat food represents by far the fastest-growing sector across the industry, according to Strobel.
Melanie Torres Cabrera, research associate, food and drinks at Euromonitor International, said: “On a global scale, we see kibble continuing to dominate, being more resilient against tense economic environments from a consumer and production standpoint. However, continued popularity for refrigerated brands like FreshPet show consumers are increasingly taking their pet's preferences into consideration.”
Holistic health is top of mind for pet owners
Pet owners across the globe increasingly perceive their pets as beloved family members. According to Euromonitor, this statement rings true for over 70% of pet owners in Asia-Pacific, Europe, Latin America, and North America.
Humanisation is driving format diversification such as snacks, beverages, and baked goods, and is boosting demand for functional, health-boosting ingredients in pet food products.
“Humanisation has continued to fuel premiumisation within pet care, causing a spillover of human nutrition trends into pet care. For example, we see naturalisation and holistic health trends informing growth in categories like supplements and premium wet dog/cat food, which boast increasing functionality claims,” said Torres Cabrera.
A growing interest in holistic care is also driving consistent demand away from traditional formats criticised for their more ambiguous, low-quality ingredient lists and towards new processing methods. Free from claims are also gaining traction, with the availability of products free of grains, artificial preservatives, and artificial flavours increasing by over 7%, 6%, and 5% respectively from 2019 to 2021, according to Euromonitor.
“With pet food ingredients increasingly tied to human grade and free from claims, newer manufacturing methods offer the idea of cleaner, more visible ingredients lists where you can often see intact bits of vegetables and meat. More rigorous standards for quality of pet food are definitely here to stay,” Torres Cabrera said.
Sustainability is of growing concern, but price is a barrier
As awareness of the environmental impact of food production grows, the sustainability of pet food is of growing concern for pet owners globally.
Compared to non-pet owners, around 7% more pet owners attempt to reduce plastic usage, 5% more use sustainable packaging, and around 4% reduce meat consumption, Euromonitor survey data shows.
Demand for more sustainable pet food in recent years has fuelled the rise of fully or partly recyclable packaging, as well as the emergence of insect and plant-based proteins in pet food. Yet with record inflation and slow economic growth reducing purchasing power for many consumers, food quality and pet standard of living continues to trump sustainability when it comes to making food purchasing decisions.
“With increasingly tighter wallets, pet parents are more likely to prioritize maintaining their pet’s standard of living regardless of how sustainable a product claims to be. We really see sustainability as an increasing concern from a manufacturing standpoint where there's increasing competition for ingredients across human and pet foods,” Torres Cabrera said.