The increase in pet ownership has coincided with a tendency to treat pets as members of the family, thereby encouraging the purchase of higher-priced premium goods that claim to possess special benefits, formulations or specialized ingredients. As a result, industry revenue is expected to grow to $23.6 billion. Over the past five years, pet parenthood has become more prevalent among consumers. Indeed, as birth rates declined following the recession, pet ownership has served as an alternative to outright parenthood. Pet parents are typically more willing to splurge on organic and premium pet food products. Profit margins are expected to reach 15.6% of revenue in 2015. The largest pet food companies, including Mars and Nestle, will continue to develop and market formulas that boast advanced benefits for pets, such as age-specific nutrients and all-natural ingredients, which command premium margins.
Pet ownership is projected to continue to grow over the next five years, partly because rising disposable income will allow more consumers to afford owning pets. “In the five years to 2020, the number of pets is projected to grow, thereby bolstering demand for pet food products.”