Pet Food Manufacturing Market

Overview
Pet food is plant or animal material intended for consumption by pets and can prevent feeding
advantage of certain diseases. It has unique characteristics such as nutritious comprehensive, digestion
and absorption rate and reasonable scientific formula. Typically sold in pet stores and supermarkets, it is
usually specific to the type of animal, such as dog food or cat food. Most meat used for nonhuman
animals is a byproduct of the human food industry, and is not regarded as “human grade”.
The global pet food market generated revenue of $68,109 million in 2014, and is expected to garner
$92,747 million by 2022, registering a CAGR of 4.1% from 2016 to 2022. The global pet food market is
driven by factors such as rising trend of nuclear families, rapid humanization of pets, and increased
awareness about pet health. In addition, increase in ownership of pets in developing nations and rise in
e-commerce sales offer opportunities for the market players. However, increasing concerns about pet
obesity and pet food recalls by companies hamper the growth of the global market.
The government of various countries have taken initiatives to promote the use of safe and healthy
ingredients to improve the overall wellness of pets. For instance, the Japanese Government
implemented the Law for Ensuring the Safety of Pet Food (Law No. 83 of 2008) for pet food
manufacturers, importers, and wholesalers to protect the pet health and regulate the manufacturing
process. Such initiatives would continue to propel the overall pet food market size. The demand for
transparency during purchasing of pet food products has increased among consumers, owing to the
ongoing concerns about pet health. Therefore, the Food and Drug Administration (FDA) ensures that the
ingredients used in pet foods are enlisted on the labels based on weight. In addition, it assesses claims
on pet foods such as "maintains urinary tract health," " low magnesium," and "hairball control."

Commercially produced pet food has its origins in a dry, biscuit-style dog food developed in England in
1860. Shortly afterwards, manufacturers produced more sophisticated formulas, which included
nutrients considered essential for dogs at the time. At the beginning of the 20th century, pre-packaged
pet foods were also available in the U.S. Initially they consisted primarily of dry cereals, but after World
War I, dog food made of canned horse meat was available. The 1930s ushered in canned cat food and a
dry, meatmeal type of dog food. Some innovations by the 1960s were dry cat food, dry expandedtype
dog food, and semi-moist pet food.

Beginning in the 1980s, trends in the pet food market included greater demand for dry foods and less
for canned foods. Research suggested that a soft diet of canned dog food led to gum disease more
quickly than did dry food. In general, the growing health-consciousness of the public led to an increased
interest in more nutritious and scientific formulas for pet foods, such as life-cycle products for younger
and aging pets, and therapeutic foods for special health conditions of the pet, such as weight loss and
urinary problems. Pet food producers were also more inclined to use less fatty tissue and tallow and
more protein-rich tissue. Finally, the pet snack category grew in popularity with products like jerky
snacks, sausage-shaped pieces, biscuits, and biscuit pieces called kibbles.
Pet Foods - Diet Types

There are four diet types used in the pet food industry:

 Dry foods are usually a bagged kibble containing 3-11% water. Dry foods are more economical
to feed than other forms of food and can remain at room temperature safely for several (1-3
hours) if not wetted.
 Canned foods are usually in a solid or soft-sided container with 60-78% water. Canned foods are
generally more palatable than semi-moist and dry because they contain more of the nutrients
that taste good: water, protein and fat.
 Semi-moist foods are usually packaged in pouches with 25-35% water. Semi-moist foods are
generally more palatable than dry foods but have become less popular in the last decade, hence
more difficult to find.
 Fresh Pet foods are more like canned foods in water content. Fresh Pet foods generally have the
highest palatability rating but are often the most expensive feeding option. Ingredients are
generally fresh, whole food items, however, vitamins and minerals are still required. The
product is most often cooked and may be provided in individualized meal portions.

Pet Food Raw Materials

The primary ingredients in pet food are byproducts of meat, poultry, and seafood, feed grains, and
soybean meal. Among the animals used in rendering are livestock, horses, and house pets which have
been put to sleep. The National Animal Control Association estimated that each year about 5 million
pets were shipped to rendering plants and recycled into pet food during the 1990s. They are generally
listed as meat or bone meal in the ingredient lists.

The animal parts used for pet food may include damaged carcass parts, bones, and cheek meat, and
organs such as intestines, kidneys, liver, lungs, udders, spleen, and stomach tissue. Cereal grains, such as
soybean meal, corn meal, cracked wheat, and barley, are often used to improve the consistency of the
product as well as to reduce the cost of raw materials. Liquid ingredients may include water, meat
broth, or blood. Salt, preservatives, stabilizers, and gelling agents are often necessary. Gelling agents
allow greater homogeneity during processing and also control the moisture. They include bean and guar
gums, cellulose, carrageenan, and other starches and thickeners. Palatability can be enhanced with
yeast, protein, fat, fish solubles, sweeteners, or concentrated flavors called "digests." Generally, artificial
flavors are not used, though smoke or bacon flavors may be added to some treats. Most manufacturers
supplement pet foods with vitamins and minerals, since some may be lost during processing.

Ingredients vary somewhat depending on the type of pet food. The basic difference between canned
and dry pet foods is the amount of moisture. Canned food contains between 70 and 80% moisture, since
these are generally made from fresh meat products, while dry pet food contains no more than 10%.
Additional ingredients used for dry foods include corn gluten feed, meat and bone meal, animal fats, and
oils. For a meat-like texture, dry foods require more amylaceous, or starch ingredients; proteinaceous
adhesives, such as collagen, albumens, and casein; and plasticizing agents. Semi-moist pet foods usually
require binders, which come from a variety of sources, such as gels, cereal flours, sulfur-containing
amino acids, lower aLkyl mercaptans, lower alkyl sulfides and disulfides, salts, and thiamin. Semimoist
products may also incorporate soybean flakes, bran flakes, soluble carbohydrates, emulsifiers,
stabilizers, and dried skim milk and dried whey.

Pet Food Manufacturing Process

Except for the ingredients, the general manufacturing process for pet food is similar to that for
processed food. The flesh products used in pet foods must first be rendered, or processed, to separate
the water, fat, and protein components, including soft offals (viscera) and hard offals (e.g. bones and
hoofs). Generally, meat is rendered by out-side companies and shipped to pet food manufacturers. The
meat products intended for canned food must be delivered fresh and used within three days. Frozen
meat products may be used for dry foods.

The manufacturing process entails grinding and cooking the flesh and flesh byproducts. Next, the meat is
mixed with the other ingredients, and if the recipe requires, the mixture is shaped into the appropriate
forms. The finished product is filled into containers and shipped to distributors.

Innovations in pet food processing and packaging have led to better quality products with longer shelf
life. Canned dog foods that are vacuum packed have a shelf life of three to five years and are very stable
with little or no loss in nutritional value. Dry dog food, on the other hand, has a shelf life of only 10 to 12
months and requires the addition of preservatives, though some manufacturers are using natural
preservatives such as vitamins E and C.

 Rendering the meat

Generally, rendering is performed by meat processors. Rendering entails rupturing fat cells,
either by heat or enzymatic- and solvent-extraction, and then drying the residue.

 Grinding and pre-cooking the meat

The meat products are coarsely ground to the desired texture. To facilitate further processing,
the ground meat is cooked in a continuous cooker with live steam at the appropriate
temperature. The flesh products are reground after initial cooking to produce a more uniform
consistency. For semi-moist or chunky foods, the batches are deliberately cooked unevenly to
create the desired chunky texture.
 Blending and shaping

The meat mixture is blended with other ingredients such as cereal grains, vitamins, and
minerals. Dry and semi-moist foods are usually heated so the mixture will partially dextrinize, or
thicken, the starch. To achieve the marbled-look of real meat, the meat mixture may be cooked
unevenly and half of the batch colored red and the other white. Semimoist foods must be
stabilized to retain the proper amount of moisture in the dry and semi-moist parts of the food.
Dry and semi-moist foods may be extruded under high pressure through a device with orificed
plates to obtain the shape and size of the specific product, for instance, the form of biscuits,
kibbles, meat-balls, patties, pellets, or slices. An alternative to extrusion is to gelatinize and
expand the mixture. For marbled meat, the mixture of red and white meat is extruded together
and broken into chunks.

 Packaging and labeling

 Measured amounts of the product are packaged into appropriate containers. Dry foods are
poured into pre-printed containers. Moist canned foods are vacuum sealed to reduce the
oxygen content and prevent spoilage of fats in the food.
 Sterilizing

Cans of pet food are sterilized by passing them through a retort, or heating chamber. The retort
may be either a batch or continuous hydrostatic type. The cans are heated to about 250°F
(121°C) for 80 minutes, though the cooking temperatures and times depend on the contents,
steam pressure, and can size. The cans are quickly cooled to about 100°FO (38°C). Next, the cans
are dried and labeled. The containers are packaged into corrugated cardboard boxes or shrink-
wrapped with plastic in corrugated cardboard trays. The pet food is ready fot shipping to
distributors.

Steps In Pet Food Processing

1. Raw material reception and cleaning

Prepare all raw materials for making pet food and clean them.
2. Crushing
It guarantees all materials are crushed into required size or powder.
3. Mixing
Mixing process is a key process in pet food production. The basic process is to weigh the raw
materials in different weight according to fomula, then pour them in the crusher to
decrease size, and later all materials are temporarily stored in the storage silo. Then all
matrials are ready, feed them in the mixer for mixing.
4. Pet food extruding
Extruding is a heat treatment process with high temperature and in short time. It can not
only reduce the degradation of food nutrients, improve the digestibility of protein starch,
but also destroy the anti nutrient components and microorganism. All shapes of pet dry
food such as round, triangle, flower shape and bone shape can be produced through
different molds (templates) of the feed extruder machine. In pet food production, fat is
usually added to improve pet food palatability, and this is carried out in conditioning
process. Besides, to give different colors to pet food tablets, manufacturers usually add
pigmented water in extruding chamber.
5. Drying
The drying section is mainly used for removing water in the extruded pet food. After
extrusion, the texture of the material is relatively soft and water content reaches 20~30%.
After the drying process, the finished product moisture is controlled at 8%~10%, which can
ensure that the material is stored in a certain period of time.
6. Oil and fat spraying
Oil and fat are the best source of energy, so 2%~40% of oil and fat can be added to formula
according to pet growth needs. We suggest that the content of the fat in the formula, that is
the content of the total oil in the extruder be kept within 12%. If the content of the oil is
required over 12% and the firmness of the granular material will be significantly reduced. If
the extruded material needs more than 12% oil content, the extra oil is suggested to be
 added in the way of external spray after drying. It can be used at normal pressure or vacuum
spray depending on how much oil is added. The external spraying will make the pet food
tablets appearance more tempting. In addition to oil, some powdered attractant is also
sprayed to increase pet feed palatability.

Global Pet Food Market Segmentation

 By Pet Type
o Dog Food
o Cat Food
o Others
 By Product Type
o Dry Pet Food
o Wet and Canned Pet Food
o Veterinary Diets
o Organic Products
o Snacks and Treats
 By Pricing Type
o Mass Products
o Premium Products
o Super-premium Segment
 By Ingredient Type
o Animal Derived
o Plant Derived
 By Distribution Channel
o Supermarkets and Hypermarkets
o Veterinary clinics
o Specialty Stores
o Online Stores
o Retail
o Others
 By Ingredient
o Cereals
o Vegetables and Fruits
o Meat Products
o Fats
o Others
 By Geography
o North America
 US
 Canada
 Mexico
 Rest of North America
 o Europe
 Germany
 UK
 France
 Italy
 Spain
 Rest of Europe
o Asia-Pacific
 China
 Japan
 India
 Rest of Asia-Pacific
o South America
 Brazil
 Argentina
 Rest of South America
o Middle East and Africa
 South Africa
 Rest of Middle East and Africa

Global Pet Food Market Size

The global pet food market size was estimated at USD 83.02 billion 2018 and is expected to grow at a
CAGR of 4.5% over the forecast period. Increasing consumer awareness regarding natural and organic
pet food products has forced the manufacturers to shift their focus from synthetic to natural products
which has acted as one of the major forces impacting the global pet food market.

The pet food industry is one of those industries, which has been performing well, despite the economic
downturn. The world’s largest pet food markets are in the United States, France, Japan, and Germany,
accounting for over half of the sales in pet food.

According to the Association for Pet Obesity Prevention (APOP), 52.6% of the dogs and 57.6% of the cats
in the United States are overweight or obese. This trend of rising obesity among pets mirrors human
obesity patterns. As a result, the major players in the pet food market have started to follow human
health trends, with foods to support weight loss.

The major constraint identified in the growth of the global pet food market is the issue with the
regulatory system.

Asia Pacific was the largest region in the global pet food manufacturing market, accounting for 41% of
the market in 2018. Western Europe was the second largest region accounting for 23% of the global pet
food manufacturing market. Middle East was the smallest region in the global pet food manufacturing
market.

The increasing humanization of pets is enabling pet food manufacturers to offer premium products
targeted towards pet owners. Humanization of pets implies that pet owners treat pets like members of
their family, and thus they are increasingly buying premium and super-premium foods and sophisticated
snacks and treats for pets. Premium pet foods are natural, organic, have higher quality and are safer
than regular pet foods. In 2016, about 14% of pet food launches in the USA were positioned as indulgent
or premium.

Product Insights

Dry food is useful in ensuring good oral care in dogs with minimal tartar buildup on the animal’s teeth
and by reducing plaque. In addition, this product type offers the crunch and chewing required for
maintaining the overall health of animals. Dry food eliminates the need for freezing as that in case of
canned food.

High moisture content in this product type helps ensure that the pets are hydrated and is also beneficial
to the urinary tract. However, high cost of the product, particularly meat-based protein canned food,
may restrict its preference among consumers, thereby restraining the segment growth over the forecast
period.

Pet snacks are usually preferred for improving intake nutrition and enhanced quality ingredient,
whereas treats are used as the key product to induce positive behavior in pets. Snacks usually consist of
baked products such as roasted grains and biscuits or dried fruits and vegetables.

Application Insights

Rising consumer awareness regarding pet health has led to increased focus on enhancing the weight of
dogs and maintaining their overall health. Customers are opting between multiple available foods and
are highly relying on product brands. Manufacturers are constantly focusing on entering the premium
food products segment and thereby improving their overall profit margin.
The trend of owning more than one cat is witnessing consistent growth, particularly in Europe and North
America, thereby propelling the product demand. Cats require less training as compared to dogs and are
capable of spending more time alone. In addition, the cost required for owing cats is relatively low as
compared to that in case of dogs

Others application segment includes pet food products for birds, fish, and reptiles. The product demand
for such animal categories is likely to remain sluggish as compared to that for dogs and cats. The short
lifespan and low rate of food consumption are likely to emerge as the major factors for low product
demand in this segment as compared to dogs and cats.

Regional Insights

North America emerged as one of the most prominent regional pet food markets after Asia Pacific. The
regional demand for pet food is primarily driven by rising consumer awareness regarding the beneficial
impact on pet health along with increasing trend of humanization of pets.

Rising trend of adopting pets among the millennials is further projected to support the market growth.
According to the American Pet Products Association (APPA), around 38% of the people across the U.S.
own cats and two as an average number of cats per household.

Europe is considered as a major market for quality-driven pet food. According to the European Pet Food
Industry Federation (FEDIAF), over 80 million households across Europe own at least one pet. The
regional pet food market is led by cat food products owing to the high rate of cat ownership.

Additionally, Asia Pacific, led by China, Japan, India, and South Korea, emerged as one of the major pet
food markets across the globe in 2018. The regional market growth can be attributed to the increasing
demand for premium dog food. According to the 2019 Alltech Global Feed Survey, pet food production
grew up to 13% in Asia Pacific in 2018.

Market Trends
 Rising Trend of Pet Humanization

The shift in pet ‘ownership’ to ‘parenting’ has been a very crucial and defining trend in the pet
food market, more so in the developed countries. Over a third of the households in the
developed countries own a pet. Traditionally, pet owners fed their pet the leftovers and scraps
from family meals. However, consumers are now becoming aware about that pet food and
home-made food consist of separate nutritional elements, and that pets need to be fed a
diverse range of food, as part of an adequate diet.

Buyers are looking for products, which are locally grown, or natural, or have digestive benefits.
Hence, it is not a surprise that the sales of premium and specialized pet foods are higher than
the sales of mid-priced products. Additionally, the pet humanization trend led to an increase in
health consciousness and has generated demand for pet food free of sugars, grains, dyes, and
other chemical additives.

 The global pet food market is driven by factors such as rising trend of nuclear families, rapid
humanization of pets, and increased awareness about pet health. In addition, increase in
ownership of pets in developing nations and rise in e-commerce sales offer opportunities for the
 market players. However, increasing concerns about pet obesity and pet food recalls by
companies hamper the growth of the global market.
 The government of various countries have taken initiatives to promote the use of safe and
healthy ingredients to improve the overall wellness of pets. For instance, the Japanese
Government implemented the Law for Ensuring the Safety of Pet Food (Law No. 83 of 2008) for
pet food manufacturers, importers, and wholesalers to protect the pet health and regulate the
manufacturing process. Such initiatives would continue to propel the overall pet food market
size.
 The demand for transparency during purchasing of pet food products has increased among
consumers, owing to the ongoing concerns about pet health. Therefore, the Food and Drug
Administration (FDA) ensures that the ingredients used in pet foods are enlisted on the labels
based on weight. In addition, it assesses claims on pet foods such as "maintains urinary tract
health," " low magnesium," and "hairball control."
 Pet parents seeking foods with preventative benefits: Many Americans are proactive about their
health, especially when it comes to what they eat. Pet owners are similarly concerned about
preventive health care for their pets. And many think that the foods they buy can make a
difference. In the Packaged Facts February/March 2017 National Pet Owner Survey, more dog
and cat owners (76% and 71%, respectively) than in previous years of the survey agree with the
statement "High-quality dog foods/cat foods are effective for preventive health care."
 Micro-targeted and functional pet foods: This trend runs tangential to pet parents seeking
preventative foods. Pet food marketers are carving the market into many fine slices, all serving
specialized target consumers with specific nutritional needs. These sub-groups include age,
breed, size/weight, activity level, indoor vs. active, type of fur, as well as allergies and other
chronic health conditions. Echoing trends in human foods, specialized pet foods offer whole
food and/or nutraceutical ingredients, such as probiotics, omega fatty acids, glucosamine, fruits,
and vegetables. Micro-targeted and functional pet foods will keep growing at an above-average
clip during in the near-term, Packaged Facts forecasts.
 DIY pet food: Pet parents often supplement pet's meals with additional homemade side dishes,
such as grilled meat, home-cooked pumpkin, or other favorite indulgences. Other pet owners
pursue a "semi-homemade" approach by enhancing the pet's meal with various additions, such
as mix-ins, toppers, sauces, and even spray-on nutrients. Pet food makers are addressing this
behavior by offering products that can be personalized, or used in combination with other
products. The raw and dehydrated pet food segment generally involves some preparation and
therefore opens the door to further customization by the pet owner.
 New directions for proteins and other ingredients: Just as pet owners seek proteins for
themselves, they also seek them out for their pets. Innovation around protein is considerable as
pet food producers launch new products to meet consumer interest in protein, including
varieties of single-proteins, proteins as the first ingredient, multiple proteins, and exotic
proteins. This trend is linked also to the rising popularity of ancestral formulations that aim to
recreate the diet of dogs and cats when they lived in the wild prior to domestication. The
ancestral niche can be viewed as the point of the spear in developing the market for high-quality
protein ingredients for pet food. Many companies fully embraced ancestral/wilderness imagery
while others have focused on the high protein aspect of the equation without the ancestral/wild
 animal positioning. The ancestral products have also stoked interest in raw and whole prey pet
food, both relating to the wild animal diet.
 Pet food products with clean labels and full transparency are the winners

This trend is no longer a choice by pet food product brands, it is rather an expectation from their
customers. Consumers’ opinions today have more of an impact on the way companies produce
and operate than ever before. Brands not able to deliver on one of the latest trends, mindful
choices, will find themselves in a difficult position, as the buying behavior of consumers will be
influenced by a more holistic approach this year. Consumers want healthy food choices, which
at the same time give them peace of mind in terms of environmental and ethical claims.

 Pet parents are increasingly seeking healthy foods with proactive ingredients for their pets

The motivation of many pet owners is: “What’s good for me is also good for my pet”. Pets have
been keeping humans healthy and contributing to their wellness since the beginning of pet
ownership. Studies have shown that pets have many positive influences on humans’ overall
well-being, by promoting physical activity and helping to manage stress in difficult life situations.
With this in mind, pet parents are increasingly concerned about preventive health care for their
pets.

 Personalization: a trend on the rise for pets

Personalization is definitely not a new trend in the human space, but one that is increasingly
gaining importance on all levels of product offerings. It is only natural that this trend will open
new opportunities in the pet food market. When it comes to personalization, there are just no
limits to anyone’s creativity. Now is still the chance to hop on to opportunities that might make
your brand stand out in the crowd and you could be celebrated as a pioneer.

 The search for new protein sources will reveal new ingredient trends
Not only is the human population growing, we are also seeing an increase in pet ownerships.
The reason for this differs from country to country, but this growth will have an implication on
the demand for proteins and meats for pets globally. The majority of protein sources today are
still meat-based, however pet food manufacturers are already looking into new exciting protein
sources and ingredients. Although some forward-looking companies are considering ways to
develop scientifically engineered ingredients and products, many consumers are not yet ready
to trust such products.
As 70% of our earth is covered by water, it is only natural that we turn to the sea for new
protein resources. By doing this in full compliance with the eco system of the oceans and
ensuring a 100% sustainable fishing operation, companies can also meet many of the other new
trend demands that we discussed earlier.
 E-Commerce continues to gain popularity and is effecting other channels
Brands that are still not on some kind of e-commerce channel, should be rethinking their
strategy. According to Nielsen consumer research, the e-commerce dog food sales experienced
a growth of 92.2 percent in 2017, while the cat food sales increased by 63.2 percent. The online
space for pet food products is disrupting other channels and we expect further growth in the
coming years.
 Known as a sales channel that is increasingly targeting the millennial generation, e-commerce
offers many benefits to pet owners, such as customized products and the convenience of home
delivery. E-commerce is also a great platform to sell products with special health benefits and
food for pets with specific needs. Consumers are likely to spend more time on educating
themselves on products bought online, as they have more time to research and are often in a
space where they feel comfortable. Therefore, the e-commerce space should be used as an
educational platform, where brands can share more information and videos about their product
benefits.
 Pet food industry Competition
Pet food is a fairly concentrated industry. The top five companies account for more than 40% of
global sales. This is striking and different from other Consumer Packaged Goods (CPG)
industries. However, recently global manufacturers have been under significant pressure from
new and local players.

Blue Buffalo has shown a continuous success story with a 138% growth in the last 5 years. This
shows that pet owners are willing to spend more on their pet’s nutrition.
 Cat Ownership
Recent developments in the industry have seen the rise of popularity of cats in markets all over,
largely overtaking dogs’ popularity. The rise in popularity can be attributed to cats’ playful and
relatively more independent nature, making them the preferred companions for fast paced,
urbanised young owners.
This has also led to a rise in sales of cat treats and cat foods. The category has seen high levels of
premiumisation with more nutrient rich, alternative protein and functional diets coming to the
markets.
Global premium cat food sales are expected to grow by 4% in 2018 with absolute growth sales
expected to reach USD 2 billion in the next 5 years. Mid-price cat food is also expected to post
good growth.
 Strong Online Sales Trajectory

Online retail sales has been gaining significant traction across developed and developing
markets. Particularly in the United States where growth rates have been phenomenal. There has
been a lot of action in the industry as Pet Smart acquired Chewy (a pure play retailer). Target
and Walmart have pushed omni-channel sales and Amazon is stepping up as well.

 Premiumisation
Premiumization has helped define and generate growth in the industry for many years, but the
ways it has done so have been changing over time.

New, locally and sustainably sourced ingredients are playing an important role in adapting to
consumers’ demands. The rise in healthy living lifestyles of the owners has percolated to the
way they interact with their pets, especially the way they feed them.
Globally, premium dog and cat food products have experienced strong growth with 25% growth
in value over the last five years and has an expected 4% CAGR for the next 5 years, according to
Euromonitor International’s latest estimates.