The global pet food market was worth $75.29 billion as of 2020 but expanded to $75.29 billion in 2021. Steadily growing over the years due to the increased popularity of pets, the industry saw its growth slowed by the COVID-19 pandemic. Like other food and beverage manufacturers, the global pet food market’s dependence on raw materials from domestic and international manufacturers caused difficulties due to pandemic restrictions.
The pet food market is dominated by North America, which accounted for 38% of the industry’s revenue in 2020, and Western Europe, which contributed 22%. Among the biggest players in the market include US-based companies Mars, the JM Smucker Company, the Colgate-Palmolive Company, and Diamond Pet Foods; as well as Swiss company Nestlé.
These companies were all impacted to some extent by the COVID-19 pandemic and saw their business hampered. Nestlé, for example, reported “slightly negative” growth in 2020. The company generated $84.34 million in sales versus $92.57 the year prior. However, the business still reported positive organic growth (3.6%), supported by “strong momentum” in the Americas, its Purina PetCare business, and Nestlé Health Science. Colgate-Palmolive, on the other hand, saw both its top and bottom lines improve year-over-year in 2020 as demand remained strong for the majority of its products.
Market analysis predicts that the global pet food industry will expand by a compound annual growth rate (CAGR) of 5% over the next four years to reach the value of $90.32 billion by the end of the period. This growth will be driven by recovery from the pandemic, the report predicts, as businesses will see the restrictions on their operations fall away. “It is expected that the pet food manufacturing market will recover from the shock across the forecast period as it is a ‘black swan’ event and not related to ongoing or fundamental weakness in the market or the global economy,” the report says.
More specifically, developed economies are expected to account for much of the projected growth. However, emerging markets are expected to grow even faster than developed markets during the forecast period, opening the door for new opportunities for emerging entrepreneurs and established companies.
The market is also expected to be driven by an increase in investments in end-user markets. Investors have already been showing a keen interest in innovative startups broaching the market, like Wild Earth, a California-based biotechnology company that produces plant-based pet food and treats. Earlier this month, KetoNatural, a health-focused pet food startup, raised $2 million in a seed financing round.
This is an industry that while impacted by COVID-19 (like many industries) is expected to see swift and steady recovery. The big companies dominating the industry are projected to continue performing as they made it through the year-long pandemic. However, it’s also notable that there is ample space for new, innovative startups disrupting the industry by seizing upon new trends in the pet industry.
About the Author
Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.