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Following on from a busy 2015, with plenty of mergers and acquisitions activity taking place, the pet food market now seems to be vibrant and innovative. In this opinion piece, Euromonitor International looks at recent innovation and how 2015 trends are likely to carry over into 2016.
Pet humanisation has been driving the industry for many years as pets are playing the role of ersatz children in a growing number of households around the world, particularly as women are increasingly delaying having children. This phenomenon is not only apparent in developed markets, but also in emerging ones. With pets being treated as “children”, the amount spent on pampering them has also increased.
The rise of the “foodie” when it comes to manufacturing food for human consumption has meant that greater interest has been paid to cooking and ingredients, as well as actual recipes. The same has been happening in pet food, whereby recipes have become increasingly scrumptious. 2015 saw the launch of more stew-based recipes under brand names such as Cesar, once again replicating tendencies visible in human food.
The foodie phenomenon has also meant that more consumers are turning to cooking for their pets. This is not jeopardising sales, but, rather, it is driving demand for more innovative products that can help owners to bake treats more easily or prepare different meals for their furry friends. Artisanal products, with a particular emphasis on treats, are gaining momentum as many consumers are willing to indulge their pets in more traditional processes. Also, products that are similar to human food, such as ones based on baked/grilled methods, have become more popular.
Increasingly, more owners are becoming connected via forums and social media, reading about different diets and becoming savvier when looking for the best diets for their pets. This includes not only scrutinising pet food processing, but also its ingredients, an issue high on manufacturers’ agendas. Indeed, offerings such as freeze dried/air dried are expected to see more advertising and become more popular as they claim to retain nutritional elements. Raw products will also continue to gain the upper hand despite the controversy in the industry about the benefits and several (many of which voluntary and preventative) recalls by companies like Nature Variety or Vital Essentials. “Free-from”, with a focus on grain (-free), becoming more mainstream may not be news, but it is also expected to be on the rise, especially outside North America.
The quest for exotic ingredients is set to remain strong as “more for less” is a motto that appeals to many consumers, particularly when such ingredients add more functionality. While rare or exotic ingredients, such as local fruit and berries, have become more sought after, their provenance is also becoming key. Ingredients’ provenance has proved important in many human and pet consumption categories, with, for example, retailers in the US advertising the fact that they do not sell treats from China. Country provenance as a symbol of quality has also been used and is expected to remain a key driver: Angus beef, Scottish Salmon and New Zealand beef are but a few examples.
The issues around ingredients are also related to protein. This will also assume particular relevance as more products are being launched claiming meat as the main ingredient. Venison, mutton, boar and others will be promoted as a differentiator. Limited Ingredient Diets seem to be waning and their popularity has not moved beyond North America.
This issue is also related to the relevance of labelling and savvy consumers. Labelling needs to be more transparent and easier to understand, with caloric content becoming a requirement in the US later in 2016.
Aspects such as transparency will be at the forefront of running a business as we settle into the era of the ever-connected consumer. There is no getting away from information, and CSR policies need to be more than just a job titles. Pet owners are typically more engaged and more eco-minded, and when price isn’t a differentiator, sustainability, local engagement/contribution to the community can be make or break deals. Supply chain traceability needs to be commonplace, cementing consumers’ expectations. After all, legal actions like Barber-Nestlé may become more common if the industry does not move towards more sustainable sources and greater traceability.