The Australia pet food market is projected to register a CAGR of 2.7% during the forecast period (2022-2027). COVID-19 restrictions have led to a delay in the delivery of pet food through the e-commerce channel. Consumers also have been more dependent on finished pet food product imports, so they faced a shortage of pet foods. The Australian pet food market has suffered due to uncertainty in demand and supply chain disruptions.
Pets have historically played an essential part in Australian households, and the emerging time-constrained lifestyles are playing a crucial role in developing the shift toward retail and commercial products. The importance of the Australian market can be understood in terms of emerging western trends and lifestyle choices. A typical Australian consumer is characterized as well aware and quality conscious. According to government consumer behavior surveys, the Australian consumer is well aware of the consumer protection laws and product makeup. This fact could boost the pet food market, given the product is of high quality. The growing trend of pet humanization, coupled with the rising annual expenditure on pets, is encouraging new players to enter the market. Their entry is backed by the high player concentration in the current Australian pet food market space, creating an encouraging environment for short-term and long-term opportunities in the pet food sector. The growing importance of health and wellness considerations in human food has flowed through to dog food product offerings. Product features include weight management, antioxidants, protein supplementation, added vitamins and minerals, omega-3 fortification, and prebiotics. According to the Royal Society for Prevention of Cruelty to Animals (RSPCA), dry dog foods tend to have more kilojoules (KJ) and higher protein per unit than wet food, which insists that pets can be fed less due to higher calorific content. According to the Pet Food Industry Association of Australia (PFIAA), dry food is chosen for reasons like less fiber content, which helps in weight management and the crunchy sensation that helps in the dental care of the pets. As of 2020, the ease of doing business in the country improved by four places and reached the 14th position in the world. Further, attributes, like gaining credit, contract enforcement, starting a business, and dealing with construction permits to establish a business unit, were ranked at 4th, 6th, 7th, and 11th positions, respectively, at the global level. Therefore, the increases in pet humanization and demand for healthy pet food is driving the demand for the market during the forecast period.
Key Market Trends
Rising Trend of Pet Humanization
Pet humanization is the driving force of the pet food industry over the past decade as consumers are proactively demanding higher quality pet foods and nutrition advice. In fact, Australians spend the most on their pet food globally on a per capita basis. This is because Australia has one of the highest pet ownership rates in the world with Animal Medicines Australia estimating that roughly 67% of Australian households have a pet with the estimated number of pets to be close to 29 million in 2019 and increased to approximately 33 million in 2021, which is more than the Australian population. The growth in the Australian market can be attributed to the increasing prices than the overall increase in the population of pets, the rise of dual-income families with no children, and high disposable incomes. The quality of pet life continues to play an essential role in product innovation and retail value sales growth within the pet food market. The shift in pet ‘ownership’ to ‘parenting’ has been a very crucial and defining trend in the market. Traditionally, pet owners feed their pets the leftovers and scraps from family meals. However, consumers are now becoming aware of pet food that consists of essential nutritional elements for the well-being of their pets. This is further boosting the demand for pet food in the country.
Dry Dog Food dominates the dry pet food segment
Australia and we have one of the highest pet ownership rates in the world. Approximately 61% of households in Australia own pets, with dogs being the most common (40%), followed by cats (27%). The growing importance of health and wellness considerations in human food has flowed through to dog food product offerings. Though the dry dog foods are less susceptible to mold and bacterial infestation, improper storage and exposure to air and moisture might lead to degradation and spoilage of the food. Dogs possess the special enzyme and the metabolism to digest foods that are less in moisture content like the dry pet foods that contain only 8-10% of water. The large incumbent pet food manufacturers dominate the dry dog food market. The dog food landscape is dominated by Mars Australia (Mars), offering the leading dry dog food brand, Pedigree. Mars has products across a range of price points and has secured its leading position by offering offerings through grocery and non-grocery retail channels. According to the Pet Food Industry Association of Australia (PFIAA), dry food is chosen for reasons like less fiber content, which helps in weight management and the crunchy sensation that helps in the dental care of the pets. The preservatives added in wet dog foods, such as Sulphur dioxide and sulfites, cause thiamine (vitamin B1) deficiency in pets to result in severe neurological symptoms and be fatal. Henceforth, consumers prefer dry pet foods that are less in preservatives. Therefore, the dry dog food is anticipated to grow during the forecast period.
The Australia pet food market is consolidated with prominent players, like Mars Inc., Hills Pet Nutrition, Nestle Purina Petcare, The Complete Pet Company, The Great Australian Pet Food Co., V.I.P. Petfoods, Australian Pet Treat Company, and Connex United Processors. The market consists heavily of large multinational players and also houses many private label players. These major players are investing in new products and improvisation of products, expansions, and acquisitions for business expansions. Another major area of investment is the focus on R&D to launch new products at lower prices.
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1.2 Scope of the Study
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Buyers/Consumers
4.4.2 Bargaining Power of Suppliers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5.1.1 Dry Pet Food
5.1.2 Wet Pet Food
5.1.3 Veterinary Diets
5.1.5 Other Products
5.2 Animal Type
5.2.4 Other Animal Types
5.3 Ingredient Type
5.3.3 Cereals and Cereal Derivatives
5.3.4 Other Ingredient Types
5.4 Distribution Channels
5.4.1 Specialized Pet Shops
5.4.2 Online Retail Channel
5.4.3 Hypermarkets/ Supermarkets
5.4.4 Other Distribution Channels
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 Mars Inc.
6.3.2 Nestle SA (Purina)
6.3.3 Colgate Palmolive (Hill's Pet Nutrition)
6.3.4 Uni-Charm Corp.
6.3.5 Nutriara Alimentos Ltda
6.3.6 Australian Pet Treat Company
6.3.7 The Complete Pet Company
6.3.8 The Great Australian Petfood Co. Pty Ltd
6.3.9 V.I.P. Petfoods
6.3.10 Connex United Processors
6.3.11 Agrolimen SA
6.3.14 J.M.Smucker (Big Heart)
6.3.15 Diamond Pet Foods
6.3.16 Blue Buffalo
6.3.17 Lyka Pet Food
A selection of companies mentioned in this report includes:
- Mars Inc.
- Nestle SA (Purina)
- Colgate Palmolive (Hill's Pet Nutrition)
- Uni-Charm Corp.
- Nutriara Alimentos Ltda
- Australian Pet Treat Company
- The Complete Pet Company
- The Great Australian Petfood Co. Pty Ltd
- V.I.P. Petfoods
- Connex United Processors
- Agrolimen SA
- J.M.Smucker (Big Heart)
- Diamond Pet Foods
- Blue Buffalo
- Lyka Pet Food