Balancing Value with Quality in the Pet Food Market

Although pet food maintained its double-digit growth into 2023, increasing to nearly $51 billion, much of this growth was fueled by higher prices rather than by this market’s historical growth driver, premiumization. Pet food’s resilience is being tested as never before, with inflation-weary pet owners and a decline in the dog population among the prime challenges this market is experiencing.

Packaged Facts’ new report, Pet Food in the U.S., 17th Edition, tracks these and other challenges the pet food market is experiencing and analyzes opportunities for success in the trends driving pet owner purchase decisions. Value-positioned products have moved to the forefront, with many pet owners seeking out quality products as a lower price point. Pet owners still want to provide their pets with the best nutrition possible, however, and view high-quality pet foods as one of the best ways to contribute to their pets living long, healthy, and happy lives.

Pet Food Value Positioning

Signs are already pointing to pet owners shifting to lower-priced products, and given the continuing economic crunch caused by elevated prices, this trend is likely to continue. As seen in Packaged Facts September/October 2023 survey data, 64% of pet owners had already cut back on how much they spend on “extras” in the previous year, and a similar share plan to do so in the year to come.

Because pets require a regular amount of food on a regular basis, and because elevated pet food prices have persisted despite a slowing of inflation, any reduction in pet food spending will almost certainly be due to pet owners purchasing lower-priced products rather than on purchasing less food. Illustrating this point, Packaged Facts survey results from September/October 2023 show that this trend has already begun, with roughly one-third of the pet owners who had changed pet foods in the past 12 months trading down to lower-priced national or store-brand products.

Pet Food as a Health Product

Pet owners are not just looking for lower prices, however. Products still have to offer quality ingredients, as pet owners remain focused on pet health and wellness despite economic challenges. Lower-priced private label products that offer premium ingredients are one way pet owners are satisfying their need to cut costs but still provide their pets with the best nutrition possible.

Pet owners consider pet food an important tool in their pet health and wellness regimen, with 78% of dog owners and 84% of cat owners ranking pet food among the most important health products for their pets, as shown in Packaged Facts survey results from February 2023. So it's not surprising that our September/October 2023 shows that approximately two-thirds of dog and cat owners are willing to pay more for pet foods with health and wellness benefits. Interest in pet health and wellness has long been building among pet owners, driven to the forefront by the pandemic. These sentiments remain, and pet owners are still prioritizing their pets’ wellbeing. Despite the interest in more value-priced pet foods, pet owners are still demanding products that help make their pets healthier and happier.

For more information about these industry trends and other important pet food market developments to watch, see the newly published Packaged Facts report Pet Food in the U.S., 17th Edition.

About the blogger: Shannon Brown is the Packaged Facts Pet Brand Manager.