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1 © GfK January 20, 2016 | Pet food trends shaping the world
Pet food trends
shaping the world Maria Lange, GfK
Pet Industry Leadership Conference 2016
Tucson, AZ
2 © GfK January 20, 2016 | Pet food trends shaping the world
http://www.pfma.org.uk/what-to-feed-your-dog/, https://fetchboy.files.wordpress.com/2013/10/dog-food-bowl_3.jpg
Prepared pet food was pioneered at the end
of the 19th century
3 © GfK January 20, 2016 | Pet food trends shaping the world
Pets and Humans
Dogs as Hunters, Guards and Protectors
Asmolean Palette, 3500-3000 BC (left) and Hades and Cerberus,1st Century BC, Crete (right), Standing Statue of a Dog in Sichuan (Han Dynasty)
4 © GfK January 20, 2016 | Pet food trends shaping the world
Pets and Humans
Pets are part of day-to-day human life throughout history
The Virgin and Child with Saints and Donor, Gerard David 1510 (Renaissance) (left) Las Meninas Velasquez, 1656 (Baroque) middle, Portrait of Julie Manet, Pierre Renoir 1887 (right),
5 © GfK January 20, 2016 | Pet food trends shaping the world
Nine in ten pet owners consider their pet a member of the family
http://www.dailyinfographic.com/pet-owners-infographic
“The Nuclear Family” – Pets are part of the Family
About 27% of pet owners have taken their pet to a professional photographer
More than half of cat and dog owners give their pets presents at Christmas. 36% give a birthday present.
25% say they blow dry their pets hair after a bath
6 © GfK January 20, 2016 | Pet food trends shaping the world
Japan has 22 million pets, but only 16.6 million children (under the age of 15)
Photograph: Alamy on http://www.theguardian.com/lifeandstyle/2012/jun/08/why-japan-prefers-pets-to-parenthood
Photograph: Ruth Evans on http://www.theguardian.com/lifeandstyle/2012/jun/08/why-japan-prefers-pets-to-parenthood
Pets replacing children?
7 © GfK January 20, 2016 | Pet food trends shaping the world
There are approximately 600 Million Dogs and Cats in the world.
Sources: APPA, ACAC, PFMA, FEDIAF, Euromonitor, Abinpet, IIPTF, GfK Estimates
The World’s Dog and Cat Population
5
50
14
81
45
85
4.5
22
3
99
24
93
0 50 100 150 200
Oceania (AUS + NZ)
Asia (CN + JP + IND)
Africa (ZA + ETH)
Europe
South America (BRA + ARG)
North America (USA + CAN)
# of Dogs and Cats in Million
# of Dog + Cat
in Million
Human
Population
in Million
% of
Dog/Cat per
Person
178 354 50%
70 242 29%
180 743 24%
17 147 12%
72 2600 3%
10 28 36%
8 © GfK January 20, 2016 | Pet food trends shaping the world
Key markets
Global pet food marketsize
USA $24Bn
Europe $20Bn
Germany $4.2Bn
UK $4.4Bn
France $4.1Bn
Italy $2.6Bn
Spain $1.5Bn
CZ $325mm
Greece $150mm
Brazil $5Bn
India $200MM
Canada $3Bn
Japan $6Bn
Australia $2Bn
China $1.3Bn
Russia $1.5Bn
South Africa $300MM
Argentina $1Bn
Global pet food market
~ +4% YOY ~$70Bn
Source: GfK Pet Retail Panel data & GfK estimate
9 © GfK January 20, 2016 | Pet food trends shaping the world
*Farm Feed market/volume (approx. 3.5Bn annually) not included in following data slides
Pet Specialty Channels
Pet Specialists/Chains
Pet Specialists/Indies
Pure Players/Online
Garden Centers, Variety Stores
DIY and Department Stores
UK
$1.3Bn
Pet Specialists/Chains
Pet Specialists/Indies
Pure Players/Online
Czech Rep.
$161MM
Pet Specialists/Chains
Pet Specialists/Indies
Veterinarian Clinics
Farm Feed*
USA
$13Bn
Pet Specialists/Chains
Pet Specialists/Indies
Greece
$68MM
Pet Specialists/Chains
Garden Centers
Rural Trade
DIY Superstores
France
$650MM
Vet Clinics
Vet Shops
S. Africa
$143MM
Pet Specialists/Chains
Pet Specialists/Indies
Pure Players/Online
Spain
$281MM
Hypermarkets
Pet Shops
Vet Clinics
** Beijing & Shanghai City Panel
China **
$51MM
10 © GfK January 20, 2016 | Pet food trends shaping the world
Source: GfK estimate
Retail Channels Overview
Mass Merchants
Groceries
Hypermarkets
Supermarkets
Discounters
Pet Specialized Retailers
Pet Shops
Pet Supermarkets
Veterinary Clinics
DIY/Garden centers
Online Pet Spec.
Farm & Feed (Agricultural Shops)
Veterinary Clinics
Retail Environment Specialized Retailers Mass Merchants
50%
80%
35%
70%
50%
20%
65%
30%
Global
China
W Europe
Brazil
50% 50% USA
45% 55% Czech
Rep.
11 © GfK January 20, 2016 | Pet food trends shaping the world
2015 Dollar Share of Sales
Species by Country
78 75 75 78 68
87 81
71
22 25 25 22 32
13 19
29
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
USA Great Britain France Spain Greece Czech Rep. South Africa China
Va
lue
%
Cat
Dog
Dog foods rack up the majority of sales across the world.
12 © GfK January 20, 2016 | Pet food trends shaping the world
2015 Dollar Share of Sales
Food Type by Country
68 56
90 80
93 90 89 78
20
26
3
8
5 6 5
12
11 18
7 12 2 4 5 11
0%
20%
40%
60%
80%
100%
USA Great Britain France Spain Greece Czech Rep. South Africa China
Va
lue
%
Treats
Wet
Dry
Dry foods are the most sold food type across the globe, with differing importance for wet foods and treats.
13 © GfK January 20, 2016 | Pet food trends shaping the world
2015 Dollar Share of Sales
Food Type by Species and Country
56 45
69 64 63
80 74
55
11
14
0 3 2
3 2
6
10 16
6 11 2
4 5
10
12 11
22 17 29
10 16 23
9 12 3 5 3 3 3 6 1 0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
USA Great Britain France Spain Greece Czech Rep. South Africa China
Va
lue
%
Cat Treats
Cat Wet
Cat Dry
Dog Treats
Dog Wet
Dog Dry
Dog Dry food accounts for at least 50% of all sales in each country. Wet food more popular in US&GB. Importance of Cat differs.
14 © GfK January 20, 2016 | Pet food trends shaping the world
3.4
34.2
76.2
44.7
37.0
27.8
31.1
38.3
37.5
33.5
5.2
16.0
0.0 20.0 40.0 60.0 80.0 100.0
US
GB
FR
ES
GR
CZ
ZA
CN
In China, small bags are top sellers due to popularity
of small/toy breeds in urban areas
Dog Dry bag size by country - Dollar Share % - 2015
Val%
Small/
Toy Medium Large
Not
Spec
CN 54 4 7 35
ZA 17 11 24 48
CZ 14 10 33 43
GR 10 17 19 54
ES 25 17 16 43
FR 18 24 27 31
GB 8 5 16 70
US 10 1 13 77
Less than 1 kg
1 – 5 kg
5 – 10 kg
10 – 15 kg
15 – 20 kg
More than 20 kg
15 © GfK January 20, 2016 | Pet food trends shaping the world
High share for small bags in China, Spain and Great Britain
Cat Dry bag size by country - Dollar Share % - 2015
12.3
41.4
44.3
49.6
41.3
0.0 20.0 40.0 60.0 80.0 100.0
US
GB
FR
ES
GR
CZ
ZA
CN
Less than 1 kg
1 – 2 kg
2 – 4 kg
4 – 6 kg
6 – 10 kg
More than 10 kg
The US has almost completely
moved away from extra-large
(+10kg) bags that are still popular
in the other countries.
16 © GfK January 20, 2016 | Pet food trends shaping the world
71.0
74.2
66.2
38.3
0.0 20.0 40.0 60.0 80.0 100.0
US
GB
FR
ES
GR
CZ
ZA
CN
The majority of Dog wet food sold in cans, except for China
who leads with pouches
Dog Wet by Container Size – Dollar Share % - 2015
Val% Can Pouch Tray Chub
CN 14 49 35 1
ZA 90 0 1 0
CZ 77 7 7 8
GR 84 2 11 3
ES 75 5 18 <1
FR 82 1 17 0
GB 33 20 21 1
US 80 2 6 4
Less than 100 g
100 g – 200 g
200 g – 400 g
400 g – 600 g
More than 600 g
17 © GfK January 20, 2016 | Pet food trends shaping the world
Strong focus on cans in the US, while other countries lean more towards pouches
Cat Wet by Container Size – Dollar Share % - 2015
16.2
19.2
12.4
44.8
79.8
86.6
47.1
11.2
9.4
0.0 20.0 40.0 60.0 80.0 100.0
US
GB
FR
ES
GR
CZ
ZA
CN
Val% Can Pouch Tray Chub
CN 27 71 2 –
ZA 19 82 <1 –
CZ 44 50 5 –
GR 74 18 7 –
ES 49 48 3 –
FR 29 69 3 –
GB 15 81 4 –
US 94 3 3 –
Less than 80 g
80 g – 100 g
100 g – 200 g
200 g – 400 g
More than 400 g
18 © GfK January 20, 2016 | Pet food trends shaping the world
Chicken is a popular flavor globally
Popular proteins by segment – 2015 – $ share
Country/food type Dog dry Dog wet Dog treats Cat dry Cat wet Cat treats
United States
Great Britain
France
Spain
Czech Republic
Greece
South Africa
China
19 © GfK January 20, 2016 | Pet food trends shaping the world
$1.84
2.55
1.50
1.75
2.00
2.25
2.50
2.75
Pri
ce
pe
r P
ou
nd
in
$
2011 through November 2015
Average Price per Pound – Food & Treats – US Pet Specialty
+39%
since
2011
20 © GfK January 20, 2016 | Pet food trends shaping the world
China – July 2013 through September 2015
Average price per pound – Food & Treats
$2.75
$2.88
$3.00
$3.13
$3.25
Ju
l 13
Aug
13
Sep
13
Oct 1
3
No
v 1
3
De
c 1
3
Ja
n 1
4
Fe
b 1
4
Ma
r 14
Apr
14
Ma
y 1
4
Ju
n 1
4
Ju
l 14
Aug
14
Sep
14
Oct 1
4
No
v 1
4
De
c 1
4
Ja
n 1
5
Fe
b 1
5
Ma
r 15
Apr
15
Ma
y 1
5
Ju
n 1
5
Ju
l 15
Aug
15
Sep
15
Price per pound in $
+8%
since
2013
21 © GfK January 20, 2016 | Pet food trends shaping the world
Open Bags China
22 © GfK January 20, 2016 | Pet food trends shaping the world
China – becoming more premium
23 © GfK January 20, 2016 | Pet food trends shaping the world
Premiumization of Petfood
24 © GfK January 20, 2016 | Pet food trends shaping the world
Natural Petfood
25 © GfK January 20, 2016 | Pet food trends shaping the world
Large focus on Natural pet food products in the US
Natural Petfood Trend in the US (excl. Vet)
$3.6
$4.2 $4.7
$5.0 $5.4
2011 2012 2013 2014 2015
Natural – $ Sales in Billion
57% 61%
64% 67%
69%
69% of all sales in the US are
attributed to Natural pet foods
4 out of 5 new items
launched in 2015 were natural
+9% sales growth in 2015
26 © GfK January 20, 2016 | Pet food trends shaping the world
$ Share % and YOY Growth of Natural category - 2015
* Greece, Czech Republic and Great Britain panels were launched in 2015. YOY Growth Rates not yet available.
Natural Pet Food
58%
3% 20%
16%
7%
38%
19%
+34% YOY
+22% YOY
+62% YOY +12% YOY +9% YOY
22%
27 © GfK January 20, 2016 | Pet food trends shaping the world
Share of Shelf vs. Share of Natural $ Sales - 2015
1 US market excludes Vet channel pet food sales.
Natural
Country
Natural
% of shelf
Natural
% of sales
United States1 68% 69%
Great Britain 34% 38%
France 11% 3%
Spain 19% 16%
Czech Republic 15% 22%
Greece 20% 20%
South Africa 16% 7%
China 24% 19%
Great opportunity for
shops in Great Britain,
Czech Republic and
Greece to dedicate more
shelf space to NATURAL
pet food products
28 © GfK January 20, 2016 | Pet food trends shaping the world
38%
22%
1%
7%
9%
10%
4%
8%
33%
18%
15%
11%
12%
28%
3%
3%
42%
33%
2%
4%
45%
26%
33%
49%
Global importance of Natural by segment
Cat Dry Cat Wet Cat Treats
65%
41%
2%
19%
26%
23%
4%
25%
52%
60%
22%
18%
7%
23%
16%
4%
72%
38%
15%
19%
32%
32%
61%
31%
Dog Dry Dog Wet Dog Treats
$ Share % for Full Year 2015
29 © GfK January 20, 2016 | Pet food trends shaping the world
Grain-free Petfood
30 © GfK January 20, 2016 | Pet food trends shaping the world
Grain-free Petfood Trend in the US (excl. Vet)
$0.9
$1.4
$1.8
$2.2
$2.7
2011 2012 2013 2014 2015
Grain-free – $ Sales in Billion
15%
20%
25%
30%
35%
37% of all sales in the US are
attributed to Grain-free pet foods
1 in 2 new items launched in
2015 were grain-free
+24% sales growth in 2015
Grain-free is the key growth driver of the Natural category in the US.
31 © GfK January 20, 2016 | Pet food trends shaping the world
$ Share % and YOY Growth of Grain-free category - 2015
* Greece, Czech Republic and Great Britain panels were launched in 2015. YOY Growth Rates not yet available.
Grain-free Pet Food
29%
1% 11%
3%
1%
15%
2%
+274% YOY
+36% YOY
+123% YOY +158% YOY +24% YOY
12%
32 © GfK January 20, 2016 | Pet food trends shaping the world
Share of Shelf vs. Share of Grain-free $ Sales - 2015
Grain-free
1 US market excludes Vet channel pet food sales.
Country
Grain-free %
of shelf
Grain-free
% of sales
United States1 35% 35%
Great Britain 10% 15%
France 3% 1%
Spain 5% 3%
Czech Republic 9% 12%
Greece 16% 11%
South Africa 3% 1%
China 9% 2%
Great opportunity for
shops in Great Britain,
Czech Republic and
Greece to dedicate more
shelf space to GRAIN-
FREE pet food products
33 © GfK January 20, 2016 | Pet food trends shaping the world
Global importance of Grain-free by segment
22%
13%
1%
2%
4%
11%
1%
1%
27%
6%
0%
3%
11%
12%
2%
0%
10%
12%
3%
3%
22%
3%
1%
11%
Cat Dry Cat Wet Cat Treats
32%
18%
1%
4%
13%
13%
1%
3%
32%
22%
0%
4%
11%
31%
1%
0%
19%
11%
0%
1%
22%
1%
7%
0%
Dog Dry Dog Wet Dog Treats
$ Share % for Full Year 2015
34 © GfK January 20, 2016 | Pet food trends shaping the world
Raw/Frozen Petfood
35 © GfK January 20, 2016 | Pet food trends shaping the world
Category remains small despite strong distribution and velocity growth since 2011
Raw frozen/refrigerated pet food trend in the US (excl. vet)
$44 $56
$70
$92
$120
2011 2012 2013 2014 2015
0.8% 1.0% 1.2%
1.6%
0.7%
+33% sales growth year over year
$1,400 per store/month;
86% more than 2011
63% distribution (up from 40% in 2011)
23 SKUs per shop vs.14 in 2011
RAW FROZEN/REFRIG. – $ sales in million
36 © GfK January 20, 2016 | Pet food trends shaping the world
The fear of recalls seems to be limiting the growth of raw/frozen food in the US
Raw/frozen pet foods
The majority of pet food recalls
in the US was linked to raw/frozen
pet food products in 2015.
The new item share of frozen items
declined from 5.3% in 2014 to 2.8%
in 2015.
Future growth of Raw pet food
in the US may continue to slow
unless manufacturers can regain
consumer confidence.
37 © GfK January 20, 2016 | Pet food trends shaping the world
Australia Pet Specialty
38 © GfK January 20, 2016 | Pet food trends shaping the world
Australia Supermarket
39 © GfK January 20, 2016 | Pet food trends shaping the world
Other premium trends
40 © GfK January 20, 2016 | Pet food trends shaping the world
Freeze-Dried, Dehydrated/Air-Dried and “Kibble Plus” Options
http://www.petfoodindustry.com/ext/resources/Images-by-month-year/15_07/freeze-dried-turkey-dog-food-1507PETfreeze.jpg
http://www.dogperday.com/wp-content/uploads/2015/09/easyraw-three-steps.jpg
http://www.merrickpetcare.com/dogs/backcountry
Raw Alternatives
41 © GfK January 20, 2016 | Pet food trends shaping the world
US pet retail/2012 – 2015 ($ in million)
Freeze-dried/air-dried – pet food full meal
Part dehydrated Dehydrated + freeze-dried 100% dehydrated Part freeze-dried 100% freeze-dried
2012 2013 2014 2015
14.3
48.5
9.2
18.8
58.4
9.4
31.8
63.6
11.5
51.0
106.2
17.5
75.4
89.7
110.1
181.8
5.1
+21%
+69%
+60%
+9%
+67%
+52%
+1%
+22% +19%
+23%
+65% Rapid
growth
+65%
42 © GfK January 20, 2016 | Pet food trends shaping the world
PetSmart® Brings Paleo-Inspired Feeding
to Pets as the Exclusive National Retailer
of Only Natural Pet® – a Leading Natural,
Sustainable Pet Brand.
PALEO
“PetSmart is dedicated to providing our
customers with innovative products to
meet their desires for their personal pet
lifestyles. We are thrilled to bring this
pioneering Paleo-inspired natural pet
lifestyle brand, Only Natural Pet, to our
PetSmart customers.”
43 © GfK January 20, 2016 | Pet food trends shaping the world
https://community.petco.com/t5/Blog/The-History-of-Pet-Food/ba-p/55488
Which pet food trends will take hold globally?
19th Century 1950s 2007 Today 2020
Pets eat what they
can find in nature,
table scraps at
home
Major pet food
Melamine Recall
Which trends will
take hold?
Raw?
Freeze-Dried?
Paleo?
Large choice of
pet food products
around the world
James Pratt
pioneers prepared
pet food
Improved technology
“The extrusion process”
creates a new era
44 © GfK January 20, 2016 | Pet food trends shaping the world
Room Service for Pets
45 © GfK January 20, 2016 | Pet food trends shaping the world
Contact
+1-212-884-9333
Business Group Director
Pet Care – North America
Maria Lange
@malangpet