Pet Food Ingredients Market Drivers, Opportunities & Challenges

The global pet food ingredients market size is estimated to account for USD 38.6 billion in 2020 and is projected to reach USD 53.2 billion by 2025, recording a CAGR of 6.6% during the forecast period. The market is driven primarily by the growing concern regarding animal health, increasing trend of owing pet animals, and the demand for an increase in the nutrient uptake of pet feed.

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Driver: Increase in pet expenditure with a substantial rise in pet food expenditure

Along with the rise in the pet population, the global pet food industry has also been expanding, owing to the increasing expenditure of pet owners on a variety of pet food products. For instance, according to the APPA, the total US pet industry expenditure increased from USD 48.35 billion in 2010 and stood at USD 72.56 billion in 2018. Furthermore, it is estimated that that pet industry expenditure would reach USD 75.38 billion in 2019. In 2017, about USD 29.07 billion was spent on pet food, which is 44.6% of the total expenditure. This increased by 4.3% in 2018, making the total expenditure on pet food reach USD 30.32 billion. Thus, the rise in pet ownership, along with the increase in pet food expenditure, is projected to drive the demand for pet food across the globe.

Opportunity: Use of cannabis in pet food

The Agricultural Improvement Act of 2018, passed in December 2018, took a significant step forward by separating hemp and hemp-derived CBD from marijuana-based products, thereby placing hemp-derived products under the control of the Department of Agriculture as a crop, rather than under the Justice Department as a controlled substance. The Farm Bill defines marijuana as cannabis with THC of 0.3% or greater (under the DEA), and hemp as cannabis with THC of less than 0.3%.

The use of cannabis in pet food treats has gained popularity, as the regulations have become less stringent. Cannabis-based pet food is available in concentrates, isolates, and synthetic forms. In cannabis-based food products, anxiety curing products are most useful to lower down anxiety. Additionally, pet owners are looking at CBD as an alternative to mitigate pain and allergies. Cannabis-based products were highly visible in the recent Global Pet Expo in Orlando (March 2019). Cannabis-based pet food is majorly sold through the Internet (via Amazon). Pet businesses have identified cannabis-based pet products as one of the growth areas of 2019.

Challenge: Capital investments for equipment

Pet food manufacturers require high capital investments to install different types of machinery and equipment. This equipment has not only high installation costs but also require timely maintenance, which is an additional cost. Pet food manufacturers look for more economical options, such as equipment rentals, contract processing, and other related facilities.

Renting equipment or contract manufacturing requires less capital investment and avoids annual maintenance costs, which are incurred by rental companies. However, capital investments are one-time investments that are usually offset in the long run.

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Key Market Players
Many domestic and global players provide pet food ingredients to improve pet health and performance. Major manufacturers have their presence in the European and Asian countries. The key companies in the global market are Cargill, Incorporated (US), BASF SE (Germany), DuPont (US), Ingredion Incorporated (US) and Archer Daniels Midland Company (US). Various strategies, such as expansions, mergers & acquisitions, and new product launches, were adopted by the key companies to remain competitive in this market.

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This release was published on openPR.