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Natural Pet Foods Are Fueling Rapid Growth in Pet Products' Industry

Natural Pet Foods Are Fueling Rapid Growth in Pet Products' Industry

There is little doubt Americans love their pets. In fact, no other country in the world spends as much money on nourishing, pampering and caring for their pets. According to the American Pet Products Association (APPA), spending in the pet industry grew by 4.5 percent in 2013 to more than $55.7 billion, and there is no sign of this growth slowing down. In fact, APPA estimates that overall spending in 2014 will top $58.51 billion—a 4.9 percent increase over 2013.

The APPA is attributing this growth to a variety of factors, including new products and investors in pet-oriented companies, and substantial increases in consumer spending on pet services, veterinary care, health and wellness products and, of course, pet foods.

The food category is expected to reach an all-time high in 2014 with $22.62 million in estimated sales. This category remains the highest spending segment of the pet industry as pet food trends continue to follow human food and diet trends. According to the Institute of Food Technologists, 79 percent of pet owners believe the quality of their pets' food is as important as their own. Fad diets for humans are also impacting what foods pet owners feed their pets, like the Paleo Diet. Some researchers believe this diet has influenced a new sector of "ancestral" pet foods reminiscent of earlier dog and cat diets.

Research also suggests that pet owners view the diets of their dogs and cats as superior to their own. The 2014 Wellness Pet Parent Survey revealed that eight in ten U.S. dog and/or cat owners believe their pets always or sometimes eat healthier foods than they do. Supporting this belief, some 82% of pet owners who took the survey said they look for special features when selecting pet food—the most popular being natural ingredients (59%), followed by digestive benefits (42%) and no artificial colors, flavors or preservatives (40%).

Bob Vetere, president and CEO of the American Pet Products Association (APPA)

“Both food and veterinary care are strongly influenced by consumers’ growing interest in improved healthcare for their pets,” said Bob Vetere, president and CEO of APPA. “Health- and wellness-related themes represent the most powerful trends across all segments of the industry and will continue to do so again this year.

According to GfK, a research company that monitors trends in pet specialty products and foods, one of the major driving forces in the growth of the pet food industry is increasing sales in natural pet foods. Gfk estimates that consumers spent some $4.6 billion on natural foods last year, an 11.7 percent increase year-over-year. Natural products for dogs outsold non-natural products in the dry food, wet food and treats categories. Two-thirds of dog food sales in 2013 were in the natural category, as well as 41 percent of cat food sales.

As pet owners become increasingly aware of the natural diets of dogs and cats, the demand for grain-free and limited-ingredient pet food is booming. Last year, sales in grain-free pet foods grew by an impressive 32.4 percent, while limited-ingredient food grew by some 22.8 percent.

“We see the growth of grain-free foods—and natural pet products generally—as part of a larger trend toward humanization of pets,” said Maria Lange, senior product manager of GfK’s Retail Sales Tracking team. “Consumers are clearly comfortable splurging on pets they see as valued family members, not just everyday animals.”

Vetere agrees, but also attributes growth in the pet food industry to the recovering U.S. economy.

“People are pampering their pets more than ever, and manufacturers and businesses are offering new products, services and opportunities to meet their needs and wants, from innovative and interactive toys, to dog walking, doggy daycare and pet-friendly hotels, restaurants and airlines.”