Pawsitively Delicious: The State of Pet Food - NIQ

Pawsitively Delicious: The State of Pet Food


Pawsitively Delicious: The State of Pet Food

Though the pet food industry has been going through major changes and facing pressure from inflation and consumer behavior shifts in 2023, many brands are seeing strong growth.

But not all pet food performs the same. Differences between pet species, product formulations, marketing, and delivery channel all have a major impact.

Keep reading to learn more about the state of the pet food industry, some key trends in pet food, and pet food innovations shaping the future.

The State of the Pet Food Industry

2023 has been rife with both growth and challenges in the pet industry. One of the biggest factors in the state of the pet industry is price increases. Prices through 2022 climbed, lapping the price increases of 2021. Average unit prices in the Pet Care department saw a 17.6% increase in the past year, with pet food seeing a 21.8% increase, pet supplies seeing a 9.8% increase, and pet treatments seeing a 3.9% increase. This rise in prices has seen total Pet Food sales across Omnichannels topped $49 billion, up 17% over last year.1

But the growth in Pet Food isn’t caused solely by inflation and price increases. This growth is being driven by a number of factors that affect demand, including the increasing popularity of pets, the growing awareness of the importance of pet nutrition, and the rising demand for premium and specialized pet foods. Pet food continues trending at a 4-year high and is following similar year-over-year trends. Still, as consumer preferences change, manufacturers will need to adapt their offerings in order to stay ahead of the competition. Those who are able to do so will be well-positioned to capitalize on the continued growth of this industry.

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With Pet Food sales continuing to grow both online and in-store, there are some emerging trends that many of the fastest-growing brands embrace. While these trends are common among the brands, they aren’t a silver bullet for overcoming shifting consumer behaviors or inflationary pressures. Looking at your brand’s data, the competition, and your niche is key.

With that in mind, here are 5 key trends in pet food to keep an eye on:

1. The Dominance of Online Shopping

The growth of eCommerce has played a major role in CPG growth over the past few years. In fact, eCommerce spending is expected to reach $36 billion in 2023 — a 20% projected increase from 2022.2 This impact is no different for the pet food industry, with more pet owners choosing to buy pet food online. In fact, online sales for the past year reached $15 billion, a 21.3% increase over the previous year.3

While online Pet food sales are driving growth trends, In-Store is still the majority of dollars. Online sales are still lower than the $34.7 billion spent in-store, the growth year-over-year is much higher.3 Online growth continues to outpace in-store, despite brick-and-mortar having much higher $ Volume sales. Understanding why consumers are shifting to online purchasing and aligning your offerings and marketing to match may be key to maintaining market share with a shifting demographic. Knowing how to adapt to online retail trends is important for pet food brands.

2. The Slow Rise of Natural and Grain-free Pet Food Options

For the past few years, more consumers have been adopting a grain-free diet for their pets out of health concerns. In 2023, Natural and Grain-Free Pet food is still growing but is a smaller piece of the Pet Food pie. In the last 52 weeks, grain-free pet food saw 4.8% growth in dollar sales, compared to 18.7% growth in non-grain-free offerings.3

Though many pet owners are still choosing grain-free options, there are a few factors impacting the return to non-grain-free. First, inflationary pressures are driving more consumers to seek out cheaper alternatives or buy in bulk. Often, grain-free options fall outside of these buckets. Second, in September 2020, the FDA released a report on their findings which indicated that they do not officially know the connection between a “grain-free” diet and canine dilated cardiomyopathy (DCM) in dogs. Until there is a clear answer to these lingering questions, pet parents are making health decisions for their pets that they would make for themselves.

3. Freeze-Dried Choices Seeing Major Traction

Freeze Dried foods outpacing all other forms of Dry pet food in Neighborhood Pet Retail, growing 19.8% over last year, reaching $241.4 million in market size.3 They are also the fastest growing across total US Pet Retail seeing 23.4% growth over last year. However, the market size is only $291 million so the niche still has plenty of room to grow.3

The biggest driver of growth for free-dried pet food is the consumer desire for raw pet food. Most freeze-dried offerings are simply dehydrated raw foods. This is a convenient way for consumers to stick with a raw food diet without the need to source, handle, or prepare fresh raw meat themselves. If you already have the tools to add freeze-dried offerings to your product assortment, you may be able to get in on a growing trend early.

4. Pet Food Innovation Succeeds

Another key trend in the future of pet food is pet food innovations taking hold on the market. That is new formulations, sizes, offerings, etc. In fact, new item launches accounted for 4% of dollar sales in the past year and products launched last year jumped from 2% to 7% of dollar share.3 Even better, the success of an innovative product can help brands grow as a whole. In an NIQ BASES study, the data shows that when innovation sales grow, a company is 1.8x more likely to grow overall sales versus companies whose innovation sales are stagnant or declining.4

One of the biggest growing innovations comes in the form of alternative protein sources in pet food. Another important innovation that consumers are adopting is personalized nutrition for their pets. Often, these are plant-based proteins and are generally used by pet owners looking for a limited-ingredient or specialty diet. Overall, consumer’s love for their pets and needs for diverse dietary options are major drivers of innovation in the industry.

5. Dry Pet Food vs. Wet Pet Food

One of the biggest areas where we’ve seen shifts in the Pet Food market is the growth of dry pet food over wet pet food. Dry pet food sales are up 18.7% in the past year compared to a 16% growth in wet food.3 This gap is even more pronounced in-store were dry pet food is up 12.5% in the past year vs. only 8.4% for wet food.3

But that doesn’t mean wet food isn’t a good bet. If anything, the data shows that both dry and wet pet food options are seeing strong growth year over year. Leaning into your existing offerings while focusing on your target consumer needs is key. If your wet food offerings perfom better than your dry, investing in the wet offerings may drive stronger growth. it all comes down to acting intelligently based on accurate and reliable data.

Image by StockSnap from Pixabay

Feed Your Pet Food Brand Growth with Data and Insights

Growing a Pet Food brand requires understanding your customers, sales trends, growth opportunities, and future demand. Which is a lot to ask if you don’t have access to accurate data and valuable insights.

Byzzer™ powered by NielsenIQ provides emerging Pet brands access to the essential data they need to successfully react to these shifting tides and build growth strategies. Current retail measurement data shows how comparable products perform in various retail channels, helping you target the right retailers and distributors. We also track online and omnichannel sales.

Talk to our experts about new options custom-built for emerging and growing brands alike.

Don’t miss out on crafting a powerful omnichannel growth strategy!


1 NIQ Total U.S. xAOC + Pet Latest 52 Weeks Period Ending April 29, 2023

2 NIQ Brandbank Report – The Digital Depth Analysis

3 NIQ Omni sales, Total Dog & Cat Food & Treats, Latest 52 Wks 04/01/23

4 NIQ Bases Innovation Measurement