Key Points of The Article
1. Two Major Trends in The Domestic Pet Food Landscape:
1) Scientific pet raising promotes the upgrade of food market materials and processes, and individual differences spur the growth of personalized customization needs;
2) The growing demand for snack products with health and efficacy concepts.
2. Three Mainstream Trends in The Overseas Pet Food Market:
1) Personalization: Making food according to each pet's weight and specific needs;
2) Fresh Food Delivery: Although dry food is the main type of pet food, DTC new brands are increasingly focusing on wet food;
3) Pet owners wish to give their pets the best experience, especially feeding them the food they consider the best. This has led to new trends in pet food such as vegan, raw, and insect-based diets.
As post-80s/90s generations who pursue personalized and quality consumption become the main force in pet raising, the role of pets is changing, and the concept of scientific pet raising is strengthening. Pet consumption is developing towards refinement and specialization. Data shows that in 2020, the scale of China's urban pet market approached 300 billion yuan, with a compound growth rate of 32.7%, of which the pet food market accounted for nearly 40%.
Today, the pet food industry is a gradually expanding market that is attracting more and more consumer attention. As people's demand for pet health and nutrition continues to increase, pet food is becoming more diversified and specialized. According to reports from market research companies, the global pet food market size is continuously expanding and is expected to maintain growth. Especially in recent years, the pet food track has shown some clear trends, which will have a profound impact on the development of the entire industry. This article will analyze the current market trends in the pet food track and discuss their impact on the industry and future development.
Next, we will look at the core trends in the pet food market, both domestically and internationally.
Moojing, through analyzing pet market data from domestic e-commerce platforms (Tmall Taobao + JD), has identified two major trends in the domestic pet food landscape:
When buying staple food, pet owners first consider nutritional components and natural health product factors. In addition, they consider the needs of their pets, such as palatability for pets, and selection of staple foods targeted according to the pet's age and special needs.
Products with functional components, healthy attributes, and high nutritional values have shown a particularly prominent sales performance. In cat snacks, products emphasizing concepts such as weight gain, dental care, hairball prevention, and calcium supplementation have increased their rolling annual sales by 29.6% year-on-year. Products emphasizing concepts such as non-addictive, grain-free, chicken breast, etc., have a year-on-year sales increase rate of 26.8%, significantly higher than the overall market. More and more cat snacks include various healthy ingredients, improving product differentiation and appeal.
What changes and trends are happening in the overseas pet food market?
By tracking the trends of overseas DTC pet food brands, Moojing has identified three mainstream trends in the overseas pet food market:
First, Personalization: Making food according to each pet's weight and specific needs.
Second, Fresh Food Delivery: Although dry food is the main type of pet food, DTC new brands are increasingly focusing on wet food.
Third, Pet owners wish to give their pets the best experience, especially feeding them the food they consider the best. This has led to new trends in pet food such as vegan, raw, and insect-based diets.
If readers are interested, please leave a comment, and Moojing will deconstruct the development paths of overseas pet startups based on reader comments and push articles on the public account.
Representative Enterprises: Barkyn, Vet Chef, Pallaby, Smalls, Tales & Tails, Jinx, The Honest Kitchen, Pure, Caats, Buddy, Alvar, Tails.com, Futails, Japhy, Wunsch Futter, Ultra Premium, Walker Drake
The characteristics of the above-mentioned brands are: 1. Creating individual products around the full range of pet food, including staple food, snacks, health products, medications, etc.; 2. In addition to physical products, a series of digital services are also provided based on consumer demand, including electronic recipes, online expert consultation, online nutrition questionnaires, personalized content pushes, pet electronic insurance, health assessments, and health monitoring, etc.; 3. Providing different product combinations for different pet profiles, such as gluten-free + pet food suitable for pets with sensitive skin, low-allergen wet food for pets with sensitive stomachs, etc.
Representative Enterprises: Pepette, Nom Nom, Lea & Bo, Freshpet, Cola's Kitchen, Dogalicious, Katkin, The Farmer's Dog, Hello Bello, Dog Heroes, PetPlate, Ollie, Butternut Box
The above-mentioned brands focus on the delivery of fresh pet food. Fresh food is processed by steaming meat and vegetables at high temperatures; it's not overly processed and doesn't contain preservatives, retaining the natural flavor of the food. Compared to traditional dry food, fresh food's ingredients are visible to the eye, maintaining the product's natural and healthy aspects.
However, the fulfillment cost of fresh food delivery is high, requiring frequent purchases and inconvenient for pet-owning households to store. So how can fresh food delivery pet food companies achieve growth?
By reviewing Freshpet's growth path, we can see that its development can be roughly divided into two phases:
The First Phase: Before 2016, the company primarily sold via online e-commerce and offline store reservations, with sales hovering around 50 million dollars and difficulty in breaking through this level. This was reflected in the secondary market, where Freshpet's stock price fell into a slump after listing, dropping to a market value of 200 million dollars.
The Second Phase: In 2016, Freshpet began trying to place its brand's refrigerators in offline stores as independent cabinets, exclusively selling its own brand's products. This model not only solved the customer acquisition problem but also addressed the category growth issue with partner channels, bringing double-digit growth in the brand's revenue within a year.
From this point on, Freshpet began increasing advertising investments and offline outlet density. By achieving a certain scale effect through extensive online and offline exposure, production costs, and delivery costs were offset by marketing expenses. Brand recognition, product penetration, average order value, and repurchase rate were four indicators used to drive brand growth.
As of the 2021 fiscal year, Freshpet's total revenue was 425 million dollars, a year-on-year increase of 33.47%, and its unique refrigerator network covered 23,631 retail stores across North America and parts of Europe.
Raw Bone Meat (BARF)
Representative Enterprises: Stella & Chewy's, Bella & Duke, Darwin's Natural Pet Products
What is Raw Bone Meat (BARF)? Raw bone flesh feeding refers to a diet for pets consisting of raw meat or other unprocessed foods. Consumers who buy raw bone flesh or prepare it themselves believe that the BARF feeding concept is close to the natural eating habits and nutritional structure of dogs and cats, effectively helping pets to grow healthily.
Taking the UK pet raw bone meat brand Bella & Duke as an example, one can subscribe to raw bone meat formulas for different stages such as juvenile, adult, and senior. On each product detail page, the selling points, ingredients, nutritional analysis, and storage methods are clearly described, and one can choose products with different net contents according to the pet's weight.
Vegan/Plant-Based
Representative Companies: freshwoof, omni, wild earth, vegdog
Plant-based products have become one of the global development trends in the food sector, and some pet consumers also want their pets to consume what they consider the best ingredients, which is why the demand for related products in the pet industry is growing daily. Take vegdog as an example; vegdog is a German startup founded in 2016, positioned as a pure vegan, gluten-free full-value wet dog food. Its products are characterized by no animal protein and gluten allergens in the ingredients and contain all the essential nutrients for dogs.
If dogs do not eat meat, how can they ensure they receive enough protein? Vegdog's answer is to use amino acids from lentils and peas as an important source of protein for dogs; to add algae (sourced from the EU) to provide essential fatty acids EPA and DHA (ω-3 and ω-6 fatty acids); and to add mineral powder to ensure optimal coverage of all dogs' nutritional needs.
New product formulas also include pumpkin and blueberry. Pumpkin is rich in nutrients and fiber and contains a wealth of vitamins A, C, and E. Pumpkin with its high potassium content can have a positive effect on dogs' hearts and blood flow. As a diuretic due to its low sodium content, pumpkin stimulates the detoxification process in dogs. Blueberries, known for their antioxidant properties, are added to new formulas for their fiber that is beneficial to digestion, their rich content of minerals like iron, magnesium, calcium, and potassium, and their inclusion of vitamins B and E.
Cell-Based Meat
Representative Companies: because animals, bond pet foods
For a long time, livestock farming has been considered a primary cause of greenhouse gases and climate change. Consequently, many innovators have turned their interest towards protein alternatives like plant-based foods, lab-grown milk, and meat. Bond pet foods is a company that produces animal protein through precision fermentation technology. Bond pet foods utilizes cellular agriculture to cultivate high-quality animal protein such as chicken, turkey, beef, pork, and fish. They extract muscle genes from animals and add them to microbes such as yeast, then utilize microbial fermentation to achieve this process.
In September 2022, bond pet foods announced the development of the world's first pet food with chicken protein without the use of animals, currently in the process of commercialization.
Insect-Based
Representative Companies: petgood, chippin, wilder harrier, tomojo, reglo
In 2021, the European Union approved the use of frozen, dried, and powdered East Asian locusts as a novel food source. A large body of scientific research shows that insects contain significantly less saturated fat and are richer in proteins than other animals. Canadian pet snack company wilder harrier launched a low-allergen dog food sourced from insect protein in 2019, with the main protein coming from black soldier fly larvae provided by Canadian insect farms. Besides this ingredient, the recipe also contains plant materials such as peas, chickpeas, lentils, and flax seeds.
In the era of pet economy's rise, the average spending in the domestic and international pet markets has noticeably increased. Ranging from the most basic staples and snacks to pet health care products, pet owners, with their rising incomes and close relationships with their pets, are willing to spend more on higher-quality products for their pets. The graph below shows that the growth rate of conspicuous consumption for pets has surpassed traditional conspicuous consumption categories such as jewelry, alcohol, mobile phones, menswear, and womenswear.
The pet market is just beginning the era of differentiated profit-making.
