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Sector Trend Analysis – Pet food trends in the United Kingdom

October 2018

Executive summary

The United Kingdom (UK) pet food industry was worth US$4.8 billion in 2017 and is expected to have a 2.6% compound annual growth rate, which will make it worth US$5.3 billion in 2022. The United Kingdom has a slightly lower projected growth rate compared with that of the European Union, whose forecast rate from 2018 to 2022 is 3.5%.

Pet foods in the United Kingdom that advertise health benefits, such as improving heart health, bones, muscles or joints, have become increasingly popular in recent years. The humanization of pets has resulted in products with health claims growing faster than standard pet foods.

Ireland had the highest reported exports to the United Kingdom, with Can$297.4 million pet food exports in 2017. Canada was ranked 13th with Can$8.8 million.

Distribution was largely through supermarkets and hypermarkets from 2013 to 2017. However pet-specific stores and internet retailing are predicted to increase their market share from 2018 to 2022.

From January 2015 to December 2017, there were 2,079 pet food products launched in the European Union. Most products launched were in the dog snacks and treats category.

The Comprehensive Economic and Trade Agreement (CETA) will apply to the United Kingdom until it officially leaves the European Union. Canada and the UK hope to use CETA as a foundation for future trade between the two countries.

Pet population

The pet population in the UK declined slightly from 2013 to 2017. During that period, the compound annual growth rate (CAGR) was −0.4% and is expected to continue to decline from 2018 to 2022 (−0.3%). However, populations of birds, cats and small mammals/reptiles are forecast to grow modestly over the next five years, at a rate of 0.1%, 0.3% and 0.9% respectively. Fish had the highest population, at 62.4% of the total population, followed by dogs (14.8%), cats (13.3%), small mammals / other reptiles (7.7%) and birds (1.7%).

The decline in pet ownership is mainly explained by an older generation that is less likely to own pets, as well as the younger generation renting in buildings that may prohibit pets. Younger individuals are also more likely to be employed in less secure jobs than previous generations. Due to this, many are focusing more of their finances on experiences rather than possessions.

Historical and forecast United Kingdom pet population: '000s of animals
Category 2013 2017 CAGR* % 2013-2017 2018 2022 CAGR* % 2018-2022
Total population 59,397.6 58,470.9 −0.4 58,004.8 57,372.1 −0.3
Fish population 38,275.6 36,505.2 −1.2 36,016.0 35,384.0 −0.4
Dog population 8,844.0 8,668.6 −0.5 8,606.6 8,334.1 −0.8
Cat population 7,377.1 7,802.0 1.4 7,868.3 7,964.7 0.3
Small mammal/ reptile population 3,926.3 4,507.4 3.5 4,522.0 4,694.2 0.9
Bird population 974.6 987.7 0.3 991.9 995.1 0.1

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

Retail market size

Despite the decline in the pet population, total pet food sales have increased at a 1.4% CAGR to US$4.8 billion in 2017 from US$4.5 billion in 2013 and are forecast to grow at a 2.6% CAGR to US$5.3 billion in 2022. Cat food is the largest contributor to the continued growth, at a 2.6% CAGR from 2018 to 2022, followed by dog food (2.2%) and the smaller other pet food market growing at 3.9%.

The sustained growth of the sector results from a few key factors. In recent years, pet owners have begun to humanize their pets, with more seeing their animal companions as part of the family. According to a Washington Post article from 2016, 76% of millennial owners are willing to spend more on their pets than themselves. Younger generations are also delaying house purchases, marriage and child-bearing, resulting in higher disposable income that is often spent on premium pet products.

Historical and forecast United Kingdom pet food: total retail sales in US$ millions
Category 2013 2017 CAGR* % 2013-2017 2018 2022 CAGR* % 2018-2022
Total Pet food 4,540.8 4,809.1 1.4 4,776.9 5,290.7 2.6
Dog food 2,200.9 2,205.8 0.1 2,167.4 2,367.5 2.2
Cat food 1,857.7 2,013.4 2.0 2,014.9 2,229.8 2.6
Other pet 482.2 589.9 5.2 594.6 693.4 3.9

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

The United Kingdom pet food market was dominated by Mars Inc. and Nestlé SA from 2013 to 2017. Mars Inc., known for brands such as Whiskas and Pedigree, had over a quarter of the pet food market share. Nestlé SA followed behind with 23.1% market share in 2017, with brands such as Purina Adventuros and Purina Gourmet Gold. Private label products (store-specific brands) had a 17.6% of the market share.

The large brands are predicted to maintain their high market share; however, there have been noticeable gains for smaller brands. Mars, for example, has its own share of premium and healthy offerings, especially after the acquisition of the Eukanuba, Nutro and Iams brands; however, they have been declining in popularity as consumers increasingly distrust the bigger brands and the smaller brands gain consumer loyalty. Collectively, small companies' market share grew at a faster rate (3.3%) than the top brands. Niche products offered by small companies that focus on specific traits, such as hairball control or hypo-allergenic properties; have helped these companies in a packed market.

United Kingdom pet food: company retail market share in US$ millions
Market player 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Mars Inc. 1,369.9 1,378.3 1,356.2 1,342.9 1,320.8 −0.9
Nestlé SA 1,055.3 1,078.6 1,149.2 1,137.4 1,112.5 1.3
Private Label 770.4 820.3 864.4 858.2 844.0 2.3
Inspired Pet Nutrition Ltd N/A N/A N/A 139.2 140.4 N/A
Spectrum Brands Holdings Inc. 27.0 126.3 126.6 129.3 133.9 49.2

Source: Euromonitor International, 2018

N/A: Not applicable

*CAGR: Compound annual growth rate

Market segmentation

Humanization of pets has been a driving force behind the market segmentation among pet foods. Owners have increased their purchases of premium products, with claims such as preservative-free and organic, to keep their pets healthy. These types of products drove growth from 2013 to 2017 and are forecast to continue growing at similar rates from 2018 to 2022.

Dog food

Total dog food sales increased at a 0.1% CAGR from 2013 to 2017 and are forecast to grow significantly from 2018 to 2022 at a rate of 2.2%. All of the main categories are expected to grow at a similar or higher rate from 2018 to 2022. The distribution in 2017 between the different dog foods was split relatively evenly, with wet dog food at 36.0%, dry dog food at 34.4%, and dog treats and mixes at 29.6% of sales. Premium products were the subcategories driving growth from 2013 to 2017, with premium therapeutic and non-therapeutic dog foods having the highest CAGRs for the period (7.5% and 4.6% respectively). These subcategories are forecast to grow at 6.5% and 4.8% respectively from 2018 to 2022.

Humanization of pets has had many effects on dog food. Wet dog food and freeze-dried food have benefitted in particular, as they are seen as fresher and healthier for pets. Consumers are turning away from the industry giants and towards smaller brands that have used emotional connections and health claims to gain popularity. Increased online retailing has also benefitted these smaller brands, as the barrier to entry is relatively low.

Historical and forecast United Kingdom market segmentation: dog food in US$ millions
Category 2013 2017 CAGR* % 2013-2017 2018 2022 CAGR* % 2018-2022
Total dog food 2,200.9 2,205.8 0.1 2,167.4 2,367.5 2.2
Dry dog food 861.7 759.7 −3.1 722.7 747.4 0.8
Wet dog food 773.3 793.4 0.6 780.4 858.3 2.4
Dog treats and mixers 565.9 652.7 3.6 664.3 761.8 3.5

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

Cat food

Cat food sales grew at a 2.0% CAGR from 2013 to 2017 and are expected to grow 2.6% from 2018 to 2022. Wet cat food was the most popular category, accounting for 69.2% of cat food sales in 2017. However, both cat treats and mixers and dry cat food are expected to grow faster than wet cat food from 2018 to 2022. The top three categories driving growth from 2013 to 2017 were cat treats (12.8% CAGR), premium non-therapeutic wet cat food (7.7%) and premium therapeutic wet cat food (7.7%). Each is expected to grow at slower rates from 2018 to 2022 at 3.7%, 5.3% and 5.4% respectively.

Despite the cat food market and cat population growth, owners have been buying less cat food than companies anticipated. The humanization of pets has resulted in more expensive and healthy options that owners are choosing instead. These foods require less volume fed, resulting in the increased longevity of each purchase. Consumers are shifting their demand towards these options with health claims such as all-natural or human-grade. There will be increased focus on foods targeted to animals, such as adult cats, certain breeds, etc.

Many of the wet cat foods and treats have had reduced additives. New dry cat food launches have focused on functional heart benefits. As 47% of UK pet owners are concerned about their pets being overweight, products that focus on weight management are forecast to become more popular.

Historical and forecast United Kingdom market segmentation: cat food in US$ millions
Category 2013 2017 CAGR* % 2013-2017 2018 2022 CAGR* % 2018-2022
Total cat food 1,857.7 2,013.4 2.0 2,014.9 2,229.8 2.6
Wet cat food 1,324.7 1,394.8 1.3 1,388.9 1,509.4 2.1
Dry cat food 395.7 396.1 0.0 396.6 454.7 3.5
Cat treats and mixers 137.3 222.5 12.8 229.4 265.7 3.7

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

Other pet food

The majority of the other pet food market was dominated by small mammal/reptile food in 2017, accounting for almost 81.0% of the other pet food sales in 2017. Mammals such as hamsters and rabbits have been popular for many years and reptiles have also become more popular as pet stores increase their reptile product variety.

Premiumization has not affected other pet food as much as cat and dog food; however, similar premium products that the larger pets enjoy are expected to be introduced in the next few years. Private label products have also not been widely available, so the big brands such as Mars Inc. dominated in this segment. In the coming years, however, private label brands will target this market as the smaller pet population grows.

Historical and forecast United Kingdom market segmentation: other pet food in US$ millions
Category 2013 2017 CAGR* % 2013-2017 2018 2022 CAGR* % 2018-2022
Total other pet food 482.2 589.9 5.2 594.6 693.4 3.9
Small mammal/ reptile food 366.5 477.7 6.8 481.8 567.9 4.2
Fish food 87.2 84.7 −0.7 86.2 97.8 3.2
Bird food 28.5 27.5 −0.9 26.6 27.7 1.0

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

Distribution channels

In 2017, grocery retailers accounted for 60.7% of total pet food distribution. More specifically, supermarkets and hypermarkets captured 88.3% of grocery retail sales. Non-grocery specialists such as pet superstores and pet shops accounted for 25.1% of pet food sales in 2017. The remaining sales were through the internet (9.0%), veterinary clinics (3.1%) and mixed retailers (department and variety stores) at 2.1%.

Purchases from grocery retailers declined slight between 2013 and 2017, with a 2.7% market loss by 2017 and −4.9% and −0.1% trends for modern and traditional grocery retailers respectively. Non-grocery specialists became more popular, gaining 1.4% over the five-year period, and internet retailing gaining 2.9%. Internet retailing in particular is set to have major gains in the coming years, due to the wider selection and convenience.

One of the key factors in high supermarket and hypermarket distribution rates is store availability. The top brands, such as Tesco, Sainsbury and Asda, have hundreds to thousands of stores. As of 2016, Tesco had 3,493 stores throughout the United Kingdom and Sainsbury had 1,312. However, as consumers stray from doing weekly purchases at one-stop-shop stores, there will continue to be a decline in purchases at these retailers, while discount and internet retailing becomes more popular.

United Kingdom pet food distribution by channels
Channels Breakdown % 2013 Breakdown % 2014 Breakdown % 2015 Breakdown % 2016 Breakdown % 2017 CAGR* % 2013-2017
Modern grocery retailers 59.3 58.6 57.7 57.0 56.4 −1.2
Convenience stores 2.4 2.3 2.3 2.2 2.2 −2.2
Discounters 0.8 0.9 1.0 1.2 1.3 12.9
Hypermarkets 27.9 27.3 26.7 26.1 25.6 −2.1
Supermarkets 28.2 28.0 27.7 27.5 27.4 −0.7
Traditional grocery retailers 4.1 4.2 4.3 4.3 4.2 0.6
Independent small grocers 4.1 4.2 4.3 4.3 4.2 0.6
Other grocery retailers 0.0 0.0 0.0 0.0 0.0 N/A
Mixed retailers 2.3 2.3 2.2 2.1 2.1 −2.2
Department stores 1.6 1.5 1.4 1.4 1.3 −5.1
Variety stores 0.7 0.8 0.7 0.8 0.8 3.4
Non-grocery specialists 23.7 24.0 24.5 24.9 25.1 1.4
Pet superstores 10.9 11.7 12.4 12.5 12.6 3.7
Pet shops 12.2 11.9 11.6 11.9 12.0 −0.4
Home and garden specialist retailers 0.2 0.2 0.2 0.2 0.2 0.0
Other non-grocery specialists 0.3 0.3 0.3 0.3 0.3 0.0
Internet retailing 7.1 7.4 8.0 8.5 9.0 6.1
Veterinary clinics 3.5 3.5 3.3 3.2 3.1 −3.0

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

United Kingdom imports

The United Kingdom, with its Can$1.1 billion in pet food imports, accounted for over half of the European Union's Can$1.9 billion imports in 2017. However with the United Kingdom leaving the European Union (EU), trade between the UK and its partners could be drastically affected depending on whether new trade deals can be reached. Canada has been a low-ranking exporter to the United Kingdom; however, it has increased the amount over the last five years with a 30.16% CAGR and could see higher exports as a result of the Canadian-European Union Comprehensive Economic and Trade Agreement (CETA) until the UK officially leaves.

United Kingdom pet food: import statistic in Can$ millions (Harmonized System: 230910, 100830)
Country 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Total 875.1 886.0 1,006.6 982.2 1,095.4 5.8
Ireland 170.5 212.7 209.6 202.5 297.4 14.9
Netherlands 104.3 148.3 172.0 200.4 192.4 16.5
France 226.7 188.60 200.5 152.5 163.6 −7.8
Germany 100.9 102.5 125.9 132.3 150.7 10.5
China 23.5 33.4 45.5 57.0 67.5 30.3
Canada (Rank 13) 3.1 1.9 5.2 7.7 8.8 30.2

Source: Euromonitor International, 2018

*CAGR: Compound annual growth rate

CETA and Brexit

Prior to the implementation of the Canadian-European Union Comprehensive Economic and Trade Agreement (CETA), Canadian pet foods were often subject to tariffs of 948 euros/tonne. Now, products that are primarily manufactured in Canada or the EU receive preferential, duty-free treatment as products manufactured in Canada that meet the rules of origin conditions can be imported duty-free into the EU without volume limitations.

Brexit has caused complications for the UK economy and its imports and exports. Historically, the UK has had some of the highest growth in the EU. However, in 2017, the UK ranked 8th in gross domestic product (GDP) growth in the EU, with a rate of 1.7% compared with the 2.6% EU average. Canadian pet food exports to the UK have fluctuated both pre and post CETA implementation.

CETA will apply to the United Kingdom until it officially leaves the European Union. Canada and the UK hope to use CETA as a foundation for future trade between the two countries.

Canadian pet food exports to United Kingdom pre and post CETA, in Can$ thousands (Harmonized System: 230910, 100830)
Description of this image follows.
Description of above image
Month October 2016 to April 2017 (Pre-CETA) October 2017 to April 2018 (After CETA)
October 661.818 514.779
November 580.446 740.413
December 502.898 964.036
January 515.82 571.905
February 846.705 372.95
March 767.695 927.18
April 842.582 496.769

Source: CATSNET, 2018

Product launch analysis

From January 2013 to December 2017, 2,079 pet products were launched in the United Kingdom. Dog snacks and; treats was the most popular category, with 668 products released over the period. This was followed by wet cat food (448), wet dog food (348), cat snacks and treats (284) and dry dog food (157).

Of these products, 1,108 of these products had ingredients claiming an animal origin, while 995 had a vegetable base, 871 were nutritional and 655 were sugar-based. Each of these ingredients was in products that were new varieties/range extensions, or new product packaging.

New pet food launches in the United Kingdom by year, 2013-2017
Description of this image follows.
Description of above image
Category 2013 2014 2015 2016 2017
Dog snacks and treats 61 153 138 127 189
Wet cat food 45 83 108 120 132
Wet dog food 41 86 65 80 76
Cat snacks and treats 28 85 48 55 68
Dry dog food 6 65 30 19 37
Dry cat food 3 36 18 39 38

Source: Mintel, 2018

Number of pet food product launches by claim in the United Kingdom, 2013-2017
Category Claim Number of products
Pet Pet – adult 1,073
No additives/preservatives 788
Skin and coat (functional pet) 423
Digestion and urinary tract (functional pet) 392
Vitamin/mineral fortified 375
Natural No additives/preservatives 1,018
Pet – adult 602
Low/no/reduced allergen 342
Skin and coat (functional pet) 310
Vitamin/mineral fortified 303
Positioning No additives/preservatives 279
Pet – adult 277
Social media 270
Premium 181
Low/no/reduced allergen 181
Plus Vitamin/mineral fortified 459
No additives/preservatives 326
Pet – adult 271
Skin and coat (functional pet) 176
Digestion and urinary tract (functional pet) 155
Ethical and environmental Ethical – environmentally friendly package 353
Pet – adult 302
No additives/preservatives 285
Low/no/reduced allergen 168
Skin and coat (functional pet) 142
Total Sample 2,079
Source: Mintel, 2018
United Kingdom top pet product launch types, 2013–2017
Launch type Number of products
New variety/range extension 894
New product 618
New packaging 408
Relaunch 134
New formulation 25
Source: Mintel, 2018
United Kingdom top pet products sub categories, 2013–2017
Sub categories Number of products
Dog snacks and treats 668
Cat food wet 488
Dog food wet 348
Cat snacks and treats 284
Dog food dry 157
Source: Mintel, 2018

Product examples

Cocoa & Gluten Free Easter Treats for Dogs
Company Pets at Home
Brand Pets at Home Waggy Easter
Category Pet food
Sub-category Dog snacks and treats
Country United Kingdom
Launch type New packaging
Price in US dollars 3.06
Claims Ethical – Environmentally Friendly Package, Gluten-Free, Low/No/Reduced Allergen, Seasonal

Pets at Home Waggy Easter Cocoa & Gluten Free Easter Treats for Dogs have been repackaged for Easter 2017. The product is made from carob, which is a dog-friendly alternative to chocolate, and retails in a partly recyclable 40 gram (g) pack. Contains 12 units.

Source: Mintel, 2018

Delicious Cheese Cat Treats
Company Mars Petcare
Brand Dreamies
Category Pet food
Sub-category Cat snacks and treats
Country United Kingdom
Launch type New packaging
Price in US dollars 4.46
Claims Low/No/Reduced Calorie, No Additives/Preservatives

Dreamies Delicious Cheese Cat Treats have been repackaged in a newly designed 180 g mega pack. These treats contain vitamins and minerals, and feature only 2 calories per treat without any artificial flavours. The product is said to be crunchy on the outside, soft on the inside, and is suitable for adult cats and kittens.

Source: Mintel, 2018

Peanut Butter for Dogs
Company F. Duerr & Sons
Brand Peamutt Butter
Category Pet food
Sub-category Dog snacks and treats
Country United Kingdom
Launch type New product
Price in US dollars 2.46
Claims Ethical – Environmentally Friendly Product, High/Added Protein, Low/No/Reduced Sodium, Low/No/Reduced Sugar

Peamutt Butter Peanut Butter for Dogs is a good source of protein, and contains heart-healthy fats, vitamin B, niacin and vitamin E. This product contains Roundtable on Sustainable Palm Oil (RSPO) certified sustainable palm oil, is free from salt and added sugar, and retails in a 340 g pack.

Source: Mintel, 2018

Boar Wild Flavour Nuggets
Company Nestlé Purina PetCare (UK)
Brand Purina Adventuros
Category Pet food
Sub-category Dog snacks and treats
Country United Kingdom
Launch type New packaging
Price in US dollars 1.79
Claims Low/No/Reduced Fat, No Additives/Preservatives, Pet – Adult

Purina Adventuros Boar Wild Flavour Nuggets have been repackaged in a newly designed 90 g pack. The low-fat complementary food for adult dogs is free from added artificial colourants.

Source: Mintel, 2018

Opportunities

Consumers are increasing their demand for high-quality pet products that would fit their own preferences. Recent patents and products aim to improve edibility through better textures and taste, as well as increase nutritional benefits, such as oral hygiene, weight management and digestive health. According to a Pet food study in the UK in 2016, 48% of pet owners check the ingredients in their pet foods. Products that emphasize health benefits, such as improved digestion and joints, and are transparent with respect to the ingredient sources will become increasingly popular in the next few years.

According to a Mintel study in the United States, 42% of pet owners are interested in pet food that has superfoods (foods that have abundant vitamins and antioxidants), while only 1% of pet food launches mention this in the description. Another survey found that 55% of pet owners find biologically approved raw food diets, consisting of 60% raw meat and bone, are the best for their pets. Specifically in the UK, 47% of pet owners believe that diets similar to what their pets would be eating in the wild are best. In addition, 42% of UK pet owners place more trust in products with a shorter ingredient list.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For additional Information on SIAL 2018, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

Sector Trend Analysis – Pet food trends in the United Kingdom
Global Analysis Report

Prepared by: Jonathan Inada, Market Analyst Intern

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2018).

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