The market for pet food in the United States is estimated to register a CAGR of 5.2% during the forecast period 2020-2025. Being the largest pet food market in North America, the United States pet food market’s growth is attributed to the increase in pet ownership. 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 label 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 the e-commerce sector is proving to be a major opportunity for low-cost marketing for the innovative and novel product line developed by these emerging companies.

Key Market Trends

Pet Humanization Is Driving The Market

Being the largest pet food market in North America, the United States pet food market’s growth is attributed to the increase in pet ownership. According to the 2018 National Pet Owners Survey, conducted by the American Pet Products Association (APPA), 68% of United States households (about 85 million families) own a pet. The expenditure on pets in the country increased from 41.2% in 2007 to 69.4% in 2018, out of which the money spent on pet food occupied over 40-45%. Quality ingredients are of the utmost importance for American pet owners. With the increase in concern for pet health, the demand for pet food products is expected to have a high potential for growth. Hence the increasing pet humanization in the country promotes the need for quality pet food.

Export Of Pet Food Is Driving The Market

According to the International Trade Centre, the total United States Petfood export in 2018, reached USD 1,467,249 thousand up from USD 1,315,328 thousand in 2016. Canada, Japan, Mexico, Australia, and China are the major pet food-importing markets. In 2018, Canada imported USD 683,806 thousand in pet food from its southern neighbor. Thus, Canada is the top destination for the United States pet food by a long shot. That value increased to USD 799,955 thousand in 2019. A break down in tariff-free international trade would likely hit the pet food industry, especially considering that Canada and Mexico are two of the top three export markets for the United States pet food. Since NAFTA came into effect, United States pet food exports to Mexico and Canada have increased by 184%, compared to 129% in the rest of the world. Mexico and Canada now account for 50% of total the United States pet food exports.

Competitive Landscape

The United States 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 the 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.

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