Pet Food Production in the US Industry Market Research Report Now Available from IBISWorld
This industry proved to be resilient during recent bouts of economic turmoil; going forward, the industry will benefit from rising disposable income. For these reasons, industry research firm IBISWorld has added a report on the Pet Food Production industry to its growing industry report collection.
New York, NY (PRWEB) March 29, 2014
Even with the recession, the Pet Food Production industry has fared well over the past five years. US consumers continued to spend on their pets despite losses in disposable income. According to IBISWorld Industry Analyst David Yang, “Pet food manufacturers have recognized this resilience and have attempted to cash in through the release of higher-margin and value-added products.” At the same time, 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 at an annualized rate of 1.6% to $23.4 billion in the five years to 2014, including growth of 0.5% in 2014.
Over the past five years, pet parenthood, where pets are treated as members of the family, 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, which helped stimulate revenue growth over the past five years. However, while revenue experienced steady growth in recent years, industry profitability has slightly declined due to rising input costs. For example, the price of corn and poultry meat, two primary inputs for pet food products, increased at an average annual rate of 10.7% and 4.7%, respectively, over the past five years. Heightened corn and poultry prices pushed down profit margins for industry operators.
Pet ownership is projected to continue to grow over the next five years, because rising disposable income will allow more consumers to afford owning pets. “In the five years to 2019, the number of pets is projected to grow, thereby bolstering demand for pet food products,” says Yang. As a result, IBISWorld forecasts that industry revenue will increase in the five years to 2019. The largest pet food companies, such as 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. Input costs will also fall as corn and poultry prices stabilize. Therefore, industry profitability is projected to recover over the next five years.
The Pet Food Production industry is moderately concentrated. In 2014, the top-four companies are Mars Inc., Nestle SA, Big Hearts Pet Brands and Colgate-Palmolive Company. Mars Inc. accounts for about one-quarter of industry revenue. Market share concentration has increased over the past five years, even though new entrants facing only moderate barriers to entry. Increasing pet ownership and the emergence of "pet parents" has also created lucrative opportunities in the pet food marketplace. With consumers increasingly willing to pay a premium for specially formulated and targeted pet foods, new companies are expected to join the industry in search of profit potential. In the five years to 2014, the number of enterprises is anticipated to rise at an average annual rate of 5.6%. Nevertheless, major players have been able to diversify product offerings through acquisitions, which contributed to rising market share concentration.
For more information, visit IBISWorld’s Pet Food Production in the US industry report page.
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IBISWorld industry Report Key Topics
The Pet Food Production industry primarily manufactures dog and cat food. Common ingredients include grains, oilseed mill products and meat products. This industry concentrates on dry and semi-moist dog and cat foods in cans or packaged otherwise. Feed for livestock is excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/2014/03/prweb11714417.htm