Functional pet foods are specialty feed formulations enriched with natural ingredients that are aimed to provide health benefits. Prebiotics & probiotics, omega-3 fatty acids, nucleotides, and enzymes are the major functional ingredients finding a role in pet animals' well-being. These formulations are proven to offer a wide range of health benefits in pets. Weight management, dental health, digestive health, and immune system boosting are key functional areas of interest among pet owners. Also, functional pet foods aid in disease prevention and treatment among dogs and cats.
The growth of the market can be majorly attributable to the growing emphasis on preventative healthcare among pet owners. The U.S. and Europe are at the forefront of adopting nutritional diets focusing on the health and longevity of their pets.
Pet owners change their pet food preference, leading to demand functional pet food with health-promoting, energy-boosting, and disease-preventing benefits.
Prebiotics & probiotics held the highest market revenue. Prebiotics & probiotics are widely used for the improvement of digestion in dogs and cats. share of 36% in the year 2019
Dry food contributed to the major share of 58% in the year 2019. Dry food is the most popular type as it is less expensive and reduces the cumulation of dental tartar.
By geography, North America contributed for the largest market share in the global functional pet food market, owing to increasing attention to health issues, which ties into aging and often the overweight population of pets. North America held a market revenue share of 46% in the year 2019.
Market Dynamics
Drivers
- Rising interest towards preventative healthcare among pet owners
- Rising animal healthcare spending
Restraints
- Reduction in free trade
Rising interest towards preventative healthcare among pet owners
As pet food becomes increasingly specialized, with manufacturers catering to consumers’ desires to meet their pets' individual needs, the functional pet food market is expected to grow during the forecast period.
An increasing number of pet owners shifting towards the benefits of a protein-rich diet to increase muscle mass & strength, promote satiety, and assist pets in maintaining the ideal body condition contribute to the market growth.
The increasing importance of a balanced diet for pets has encouraged several manufacturers to incorporate functional pet food ingredients in their pet food, thus contributing towards the market growth of functional pet food shortly.
For example, omega-3 is one of the most common functional pet food ingredients incorporated in dog food. Calcium is another class of functional pet food ingredients important for bone and teeth health.
A high protein diet is important for many manufacturers and pet owners because of proteins’ ability to repair tissues and muscles, which is essential for the body to function. Hence, many manufacturers, brands, and retailers are projected to incorporate formulas that highlight the protein sources in pet food and quality and quantity.
Moreover, in a 2018 Packaged Facts pet owners survey, 72% of dog owners and 67% of cat owners agreed that “high-quality dog foods/cat foods are effective for preventive healthcare,” and 89% of dog and cat owners agreed that “targeted pet foods with special nutrition formulations are beneficial to pets with specific health concerns.”
Hence, pet owners shift towards functional pet food due to growing advantages towards healthcare like improved digestive system, dental skincare, joint health, and boosting immunity among pets.
Market Segmentation
Cat is the second most popular pet across the globe, holds the second-largest share in the total functional pet food market, accounting for above 28.1% market share. They are considered obligate carnivores and require high-quality proteins and meat-predominant amino acids. Cats have an elevated requirement for sulfuric amino acids, like methionine, and a dietary requirement for the amino sulfone, taurine.
The disparity between the sales of wet and dry cat functional food is less noticeable than dog food. As cats consume very less water, veterinarians and other cat experts recommend that wet food should be served at least once a day to provide hydration and prevent urinary infections.
On the other hand, dry cat functional food is purchased, as it is comparatively cheaper and provides greater convenience. It is also good for cats' dental health. Hence, cat owners are recommended to purchase both dry and wet cat functional food and provide them with an optimum balance.
One of the key trends driving the cat functional food market is increased concern over the cats' health and hygiene. The young generation, especially the millennials, have become very cautious when selecting food for cats.
As millennials tend to prefer online purchases, it becomes easier to compare amongst different products. Similarly, this trend of making hygiene a central factor for selecting a particular product has encouraged pet owners to prefer limited ingredient diets, which have proven to be vital to keep allergies at bay.
It has been observed that the market for cat functional food has tremendously grown in the Asia Pacific region, especially in countries like China and India. The number of products related to the grooming, vaccination, and health of cats has also been developed majorly in recent years, leading to the cat functional food market's growth.
Geographical Analysis
North America is the largest regional market in the global functional pet food market, estimated to account for a share of 46.39% in total dollar sales in 2019.
Increasing pet humanization, increase in pet ownership, the emergence of private label store brands, and growing urbanization are some of the major driving forces that propel the growth of the North American functional pet food market.
North America's functional pet food market valued at USD 4,572.72 million in 2019 and is estimated to grow at a CAGR of 8.58% during the forecast period. The U.S dominated the North American functional pet food market with a market revenue share of 91% in 2019.
In the country, the functional pet food market is majorly being driven by the dog food segment. This segment covers nearly 74% of the US's total market and is also expected to grow the fastest in the functional pet food industry.
Most of these trends have been fueled by the growth of premium natural and healthier pet food products. The demands for better-quality formulas and healthier functional ingredients have permeated preferences across price platforms through increased consumer awareness of healthy diets and intensified pet humanization.
Almost 70% of U.S. households have one or more pets, while the remaining 30% do not own any pets due to personal and financial issues. Dogs and Cats are the most common pests in the country, amounting to nearly 100 million together. As per the American Pet Products Association, U.S. pet owners spent nearly USD 30 billion on pet care products in 2018, increasing over 4% from the previous year.
Currently, demand for functional pet food products is booming due to the covid-19 pandemic, resulting in a sudden spike in pet ownership.
Functional ingredients are of the utmost importance for American pet owners. With the increase in pet health concerns, the demand for functional pet food products is expected to have high growth potential.
Dry pet food held the highest market revenue of 58% in the year 2019. The demand for high protein and low carbohydrate diets drives the market, which, in turn, boosts the dry pet food segment overall in the region.
With the growing demands for functional pet food due to the rising trends of pet humanization, the pet food industry's major players are also increasing investments to occupy major shares and stand as the market leaders.
For instance, in 2020, Nestle Purina announced USD 140 million in its US pet food factory to expand its operations in the country. The main aim of the expansion is to add new processing and packaging lines to produce 'dry' or kibble-based pet foods in the market.
The United States functional pet food market is likely to reach ** million in 2027.
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