Gone to the dogs – the humanisation of pet food

A recent study found that almost two-thirds of Irish households have a cat or a dog, while over 90% of Irish pet owners recognise their cat or dog as being a member of the family.

We love our pets in Ireland and it’s no surprise that most pet owners are willing to provide their pets with the very best veterinary care and nutrition. It may operate below the radar but the global pet food industry is big business.

It’s incredible that consumers will pay five times more for a litre of milk for their cat or dog than they would for a product they will consume themselves

In Ireland, we talk a lot about the lucrative infant formula sector. Yet, global sales of infant formula stood at $75bn (€69bn) last year, which is significantly smaller than the $90bn (€82bn) global market for pet food. And it continues to grow. Over the coming years, the global pet food market is forecast to grow by more than 6% a year on average, to reach $125bn (€115bn) by 2025.

This is exceptional growth for a market that has long been commoditised and more than triple the growth we see in global dairy and meat markets. So what exactly is driving this growth?

Pet food trends

While pet food may seem like a straightforward business, some interesting new trends are emerging in the sector and companies are finding new ways to add value.

Humanisation of pet food is by far the biggest growth driver in the sector right now, with many pet owners today viewing themselves as a “pet parent”.

This phenomenon has seen entire new categories emerge in pet food, which was traditionally categorised as either wet or dry pet food. Now, there are as many options for snacks, treats, high protein or low-fat pet food as you might find in the supermarket aisles for people.

Incredibly, pet owners are prepared to pay multiples for these products than they would for their own food. For example, Tesco currently offers a small 200ml carton of milk for kittens, which retails at €1.09 and contains reduced lactose and is low in fat. On a per-litre basis, this means pet owners are paying €5.50/litre for kitten milk, while one litre of Tesco own-label milk for humans sells for just €0.75.

Tesco also offers a 200ml carton of milk for puppies that’s made from goat’s milk and sells for €0.99, or €4.95 on a per-litre basis.

It’s incredible that consumers will pay five times more for a litre of milk for their cat or dog than they would for a product they will consume themselves.

On the meat side, pet food companies are extracting similar premiums.

A 60g packet of Whiskas Temptations with beef retails at €1.89 and is made from about 4% beef and other animal byproducts. This equates to a retail price of €31.50/kg, which is almost triple the cost of sirloin steak that Tesco sells for €12/kg and more than four times the price of lean steak mince priced at €7.58/kg.

An 80g bag of lamb strips for dogs, which is made from lamb (50%), chicken, duck and pea protein, sells for €2.69, or €33.63/kg.

Compare that to a shoulder of lamb which sells for about €7.25/kg – almost five times cheaper.

When it comes to pork options, pet owners can buy a 95g simple sausage for their dog for €2.49, or €26.30/kg. Meanwhile, a packet of Clonakilty sausages for the Sunday morning fry will set you back just €5.50/kg.

Pet obesity

Over the last decade, consumer demand has led to higher-protein food and drinks for people. This trend has now permeated into the pet food sector with many consumers feeding their pets high-protein snacks and pet food in the belief this is what’s best for the animal.

But these new pet diets have created a pet obesity problem, particularly in the US. According to the annual survey carried out by the Association for Pet Obesity Prevention (APOP), a whopping 60% of cats and 56% of dogs in the US are deemed to be overweight today.

Superfoods

The growing pet obesity problem around the world has opened further niches and opportunities in the wider pet food sector.

Take a walk through the pet food aisle in your supermarket this week and you will see entire ranges of “Superfoods” for pets aimed at the pet parents of overweight animals.

An Irish pet food company, Kildare-based Irish Dog Foods, is leading the charge in this regard. Owned by the Queally family, Irish Dog Foods has developed an entire range of superfood options for dogs.

These include chicken burgers with spinach and kale, nature bars made with chicken, quinoa and oatflakes, and treats made from chicken, sweet potato, carrot and pumpkin.

A 100g bag of these treats retails for about €2.50, or €25/kg for a product that is 85% chicken. This is almost four times the price point for chicken for human consumption, which sells at around €7/kg.

This range of superfoods for pets is marketed by Irish Dog Foods as functional treats for dogs that are good for mobility, cognitive, antioxidant and digestive health.

Added value

When you stand back and look at the pet food market, it is remarkable that consumers are willing to pay up to five times more for pet food than they are to feed themselves.

Thanks to the explosion of humanisation in pet food and a growing awareness of pet obesity levels, it is no surprise to see the global pet food market is growing at more than three times the rate that traditional meat and dairy markets are.

When it comes to adding value to the fifth quarter in meat, the pet food industry offers an opportunity for the meat businesses to grow business and add value to low-value cuts.

Irish Dog Foods in Kildare is well-established in export markets, while the Larry Goodman-owned C&D Foods in Longford is now the largest own-label pet food business in Europe.