Pet food is increasing in importance as a profit center for major food processors, but they’re facing many of the same pressures that they do with human food, according to a report in the Wall Street Journal.
Both Nestlé and General Mills said in their latest financial reports that strong sales in pet foods are making up for weakening in other major product segments. Nestlé owns Purina, which has more than 40% of the U.S. dry pet food market, and General Mills bought Blue Buffalo, a maker of healthy pet food, in 2018. Blue Buffalo had a 16% rise in sales in 2019. Globally, pet food sales have increased 61% since 2010.
The Journal article says that trends contributing to the importance of pet food include later marriages and smaller families, which leads consumers to focus on their pets and pamper them more. These trends are driving the premiumization of pet food, with more emphasis on aspects like organic and grain-free.
However, just as in human food, big processors are facing pressure from smaller, nimbler companies that can respond faster to such trends. And their response is similar to the one for human food: buying and investing in startups.
