ROCKVILLE, Md., Nov. 13, 2014 /PRNewswire/ -- Although the recession and its aftermath of economic anemia softened consumer spending, premium products remain a fact of life in the U.S. pet market. For the past decade, premiumization has been driving much of the pet market growth, and this trend remains in strong play and has emerged as an essential aspect of the natural pet products segment, according to Natural, Organic, and Eco-Friendly Pet Products in the U.S., 5th Edition, a recent report by market research publisher Packaged Facts.
The report estimates U.S. retail sales of natural pet products are on track to exceed $7 billion in 2014, reflecting a 2010-2014 compound annual growth rate (CAGR) of 15%. Natural pet food will account for the vast majority of sales and is expected to reach $6.6 billion by the end of the year, with natural pet care products comprising the remainder. More insights from the report can be found at: http://www.packagedfacts.com/redirect.asp?progid=86857&productid=8468812.
With pet household growth rates modest at best, the overall pet market has been seeing little expansion in terms of volume sales, so marketers have been driving dollar gains by converting pet owners to higher priced products. Thus absent any other galvanizing factors toward increased pet ownership, ongoing premiumization is crucial if pet market dollar sales are to continue to rise in the short term. As a result it's no wonder pet product makers and retailers are drawn to the superpremium edge of the business, comments Packaged Facts research director David Sprinkle. In the pet food arena, margins on superpremium foods can reach 40%, compared with 30% for premium brands and 20% or less for standard brands.
This "premiumization pressure" is a potent driver toward increased sales of natural and organic products, since in the pet market, "premium"—and especially "superpremium"—increasingly mean "natural." Although not all superpremium products are natural, more and more of them are, with natural products at the core of the premiumization trend, especially in regards to pet food. The flip side of this trend is that offering a "natural" product is no longer enough to attract consumer attention. Marketers must find additional product features to entice purchasers and justify the heightened price tag.
To meet consumer demand and justify the higher prices of premium products, virtually all pet product marketers are focusing more intensively on pet health. This is good news for natural and organic products since many consumers increasingly view natural and organic products as being healthier. Pet owners are willing to spend more if they believe that the products offer health and wellness benefits. According to Packaged Facts' April/May 2014 survey results, 64% of pet owners believe that high quality pet foods are effective for preventive health care, and 68% are willing to spend extra money to ensure the wellness of their pets. Pet owners want to make sure that the products they are purchasing are fulfilling their pets' needs, both overall and in specific ways. The Packaged Facts survey also revealed that 62% of pet owners check product labels on the pet foods they buy, and 42% are concerned about their pet having food intolerance or allergies.
For an in-depth look at Natural, Organic, and Eco-Friendly Pet Products in the U.S., 5th Edition and other reports in Packaged Facts' industry-leading catalog of research on pet products and services please visit: http://www.packagedfacts.com/pet-products-services-c124/
About Packaged Facts – Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services. Packaged Facts also offers a full range of custom research services.
SOURCE Packaged Facts