Pet Food Category Competitive Analysis
Category Competitive Analysis
Submitted by
Yichen Chen
Dave Stoffel
Faisal Alshalwi
Strategic Marketing
(MKTG 6012)
Instructor
E.Ann Huser
Pledge:
“We have neither given nor received help on this report”
2-25-2015
Category & Competitive Analysis
A: Industry Description and Trends:
This report will focus on dog food, which is a segment within the pet food industry. The pet food industry revenue (including biscuits, treats, snacks and beverages) in the U.S. for 2014 was estimated to be $21 B, with a +12% growth over the last five years (2014 vs 2009). The industry analysts also expect +12% growth for the next five years (2014-2019). Thus the pet food industry is relatively mature and showing strong, steady growth. However, despite the increase in revenue, pet ownership has been declining due to the poor economy and the recession. (Mintel, Introduction, CMB, p. 107)
The economic trend has had a negative impact on lower and middle class households, causing the median household income in the U.S. to decline. As a result, pet ownership has declined. Although the primary users of pet food, which are households with children, are declining, the single households (millennials) have grown to 55%. Another major group of pet owners are baby boomers that are using pets to replace their grown up kids. Even if this group is not growing, 66% of them are pet owners. The recovering economy will provide consumers with more discretionary income mainly for the 42% pet owners who love to spoil their pets. (Mintel, Market Driver, CMB, p. 110)
On the other hand, the ongoing trend of pet humanization will boost demand for premium foods, upscale products, and more specialty services. With 62% of pet owners considering their pets as a family member, they will seek out pet food with profiles similar to their food. Humanization has become a major trend in the pet food industry and therefore those manufacturers who leverage higher quality, people-type ingredients and flavors
Submitted by
Yichen Chen
Dave Stoffel
Faisal Alshalwi
Strategic Marketing
(MKTG 6012)
Instructor
E.Ann Huser
Pledge:
“We have neither given nor received help on this report”
2-25-2015
Category & Competitive Analysis
A: Industry Description and Trends:
This report will focus on dog food, which is a segment within the pet food industry. The pet food industry revenue (including biscuits, treats, snacks and beverages) in the U.S. for 2014 was estimated to be $21 B, with a +12% growth over the last five years (2014 vs 2009). The industry analysts also expect +12% growth for the next five years (2014-2019). Thus the pet food industry is relatively mature and showing strong, steady growth. However, despite the increase in revenue, pet ownership has been declining due to the poor economy and the recession. (Mintel, Introduction, CMB, p. 107)
The economic trend has had a negative impact on lower and middle class households, causing the median household income in the U.S. to decline. As a result, pet ownership has declined. Although the primary users of pet food, which are households with children, are declining, the single households (millennials) have grown to 55%. Another major group of pet owners are baby boomers that are using pets to replace their grown up kids. Even if this group is not growing, 66% of them are pet owners. The recovering economy will provide consumers with more discretionary income mainly for the 42% pet owners who love to spoil their pets. (Mintel, Market Driver, CMB, p. 110)
On the other hand, the ongoing trend of pet humanization will boost demand for premium foods, upscale products, and more specialty services. With 62% of pet owners considering their pets as a family member, they will seek out pet food with profiles similar to their food. Humanization has become a major trend in the pet food industry and therefore those manufacturers who leverage higher quality, people-type ingredients and flavors
Cited: Huser, E. A. (2015, January 1). Strategic Marketing Course Materials Book. Course Materials Book . Madison, NJ: E. Ann Huser. Mintel Market Research, Pet-Food-U.S-July 2014 Reports: Brand Share, CMB, p. 107-126 Information Resources, Inc., 2013, CMB, p. 105-106 PetMD. (2015). Dog Nutrition Center. Retrieved 2015, from PetMD: http://www.petmd.com/dog/mybowl (Found by Dave) Horick, R. (2008). Category Captains: Who’s in Charge? Retrieved from http://www.owen.vanderbilt.edu/faculty-and-research/vanderbilt-business-inbrief/category-captains-whos-in-charge.cfm (Found by Yichen) Tuggle, Kathryn. (2012). In Down Economy, Pet Ownership Drops. Published August 21, 2012. FOXBusiness. http://www.foxbusiness.com/personal-finance/2012/08/21/in-down-economy-pet-ownership-drops/ (Found by Faisal)