"Love them like family, feed them like family."
That's the motto of pet food maker Blue Buffalo Co., but it nicely captures the current sentiment of pet owners … and all makers of pet food. Pet food is a $26 billion a year business, growing at 6 percent and showing no signs of slowing, according to market research firm Packaged Facts. And higher-end products like those at Blue Buffalo – typically $60 and up for a 30-lb. bag -- are enjoying even higher growth rates.
Speaking of Blue Buffalo, it was the last independent of the five top-selling pet food companies … until now. At the end of February, General Mills announced a deal to acquire the premium pet food company for $8 billion.
There are numerous parallels between the pet food market and the rest of the food industry. Millennials and ecommerce are changing the business. Premium and niche products are growing faster. Gluten-free products and clean labels are of growing importance. Food safety is paramount. And the leading suppliers are Mars, Nestle and J.M. Smucker, although you won't find their names on bags of Iams, Purina or Gravy Train, respectively. The U.S. has 517 pet food manufacturing facilities.
"It's an exciting time to be in the business," says Cathleen Enright, outgoing CEO of the Pet Food Institute (www.petfoodinstitute.org). "Just as with human food shoppers, today’s pet food shoppers live in the era of instant information. There is a growing interest in understanding issues related to the manufacturing of food and the ingredients used. This overarching theme plays a role in shaping the various trends within pet food."
Much of the growth in pet food has to do with the rapid acceleration of online sales, particularly with behemoths Amazon.com and Chewy.com, notes David Sprinkle, research director for Packaged Facts (www.packagedfacts.com). "Internet sales of pet products are outpacing and even stealing sales from other channels, notably pet super stores," he says. PetSmart found a way to fight back: It bought Chewy.com in mid-2017 and closed down PetSmart's own efforts at ecommerce. Chewy.com was only founded in 2011 but it was reported to have sales of $880 million in 2016 and was projecting $1.5 billion for 2017.
More pet parents looking for foods with preventative health benefits. So pet nutrition research is focusing a great deal on protein, vegetables, pet aging and obesity. Clean-label ingredients play as great a role in pet nutrition these days as it does in human nutrition.
In fact, retail intelligence from Spins (www.spins.com) points to a spike in availability of clean-label and better-for-you pet treats, and expects to see more functional ingredients in pet products this year. Spins pegs pet treats with probiotics at $1.4 million and growing at a rate of 31.6 percent a year. One dog treat featuring probiotics is functional frozen yogurt from the Bear & The Rat, which offers bacon & peanut butter, banana & peanut butter and pumpkin flavors.
Formulators are developing more products to help animals cope with the physical changes, such as joint problems, arthritis and other signs of growing older by incorporating functional ingredients and adjusting nutrient levels. Hill's Science Diet Adult Healthy Mobility uses glucosamine and chondroitin and omega-3 fatty acids "to improve mobility in 30 days." Purina One SmartBlend Vibrant Maturity 7+ Senior Formula uses medium chain triglycerides (MCTs) as a "brain-friendly fuel that feeds the neurons and keeps the brain cells active." Nestle's Purina Petcare is said to have more than 500 scientists on staff, including food scientists, nutritionists and veterinarians.
Research from Mars Petcare’s Waltham Centre for Pet Nutrition (www.waltham.com) shows similarities between dogs and humans as they both age: graying hair, wrinkled skin and more aches and pains and a rise in inflammation and immune system changes. The researchers tracked the biochemical health of dogs over a 10-year period. As the dogs aged, protective proteins within their bodies diminished. "Combined with regular veterinary check-ups, improved diets for seniors could potentially deliver more healthy active years for older dogs. However, more long-term research will be needed before optimum nutrition for every life stage [of pets] can be fully understood," the study mentions.