Market for Natural Pet Products Expected to Skyrocket

U.S. sales of natural pet products are forecast to jump by 32 percent in 2013 as mass retailers devote more shelf space to such items and manufacturers expand their offerings, according to a report released Monday by Packaged Facts.

The Rockville, Md.-based market analyst firm predicted combined sales of natural pet foods and natural pet care products to grow by 10 to 15 percent annually from 2014 to 2017. Receipts are expected to total $9.4 billion by 2017, up from an estimated $4.1 billion in 2012.

Pet specialty retailers can expect competitors in the mass market to introduce more lower-priced natural foods, said the report’s author, David Lummis. He cited as examples the 2011 launch of Purina One Beyond, from Nestlé Purina PetCare Co. of St. Louis, and the August 2012 release of Pure Balance from Wal-Mart Stores Inc. of Bentonville, Ark.

Independent retailers are responsible for 72 percent of the natural market, according to a report released by Packaged Facts. Courtesy of Cutter’s Mill

Lummis noted that receipts in the natural pet products market should grow by several hundred million dollars alone because of a single action by Hill’s Pet Nutrition Inc. of Topeka, Kan. The company announced in September that it would reformulate Hill’s Science Diet into natural recipes.

Independent retailers shouldn’t be surprised if another brand they commonly sell gravitates to the big-box arena, according to the report, “Natural, Organic and Eco-friendly Pet Products in the U.S.”

“As Science Diet converts to natural and the natural pet food competition heats up even more, it’s also increasingly likely that one of the leading natural brands in the pet specialty channel will make the leap into mass, further blurring the already somewhat tenuous distinction between the natural products sold in the two channels,” Lummis wrote.

Packaged Facts noted that the natural segment began to “go mass” about five years ago with products from companies such as Purina, Cincinnati-based Procter & Gamble Pet Care, with its Iams brand, and Princeton, N.J.-based Church & Dwight Co. Inc., the maker of Arm & Hammer cat litter.

Despite the growing influence of mass marketers, independent retailers are expected to capture 72 percent of the natural segment in 2012, the report found. About 75 percent of natural pet food will be sold in the specialty channel, compared to 45 percent of natural pet care items.

“Due to the propensity of pet owners to buy cat litter in mass channels, where natural options now abound, pet care tilts more to mass,” the report explained.

Two companies combine for up to 40 percent of natural food sales in the specialty market, Lummis stated. The Nutro Co. of Franklin, Tenn., a subsidiary of Mars Inc., manufactures lines such as Natural Choice and Nutro Max for dogs and cats, while Blue Buffalo of Wilton, Conn., has a “highly effective distribution program” for its flagship Blue label, according to the report.

Market shares of 5 to 10 percent each go to four companies: WellPet of Tewksbury, Mass.; Natural Balance Pet Foods Inc. of Pacoima, Calif.; Merrick Pet Care Inc. of Amarillo, Texas; and Natura Pet Products of Fremont, Neb., part of Procter & Gamble.

Many smaller companies, such as Halo, Purely for Pets of Tampa, Fla., and Champion Petfoods of Edmonton, Alberta, Canada, divvy up the remaining shares, the report noted.

Lummis also identified “dedicated natural marketers” that stand out on nonfood items, including Bio-Groom of Longview, Texas (wet grooming), PoochPlanet, a brand of Worldwise Inc. of San Rafael, Calif. (toys), West Paw Design of Bozeman, Mont. (bedding) and Ark Naturals of Naples, Fla. (supplements).
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