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The direct-to-consumer pet food market is expected to grow at a compound annual growth rate (CAGR) of 25.2% from 2021–2028 to reach $8.16 billion by 2028.
The direct-to-consumer (D2C) pet food market has been growing rapidly due to a number of key factors.
- Increase in smartphone usage
- People’s hectic lifestyles
- Growing adoption of digital channels
- Availability of online products
- User-friendly websites/apps
- Rising pet population with increased sales of pet food
- Humanization of pets
- Concerns about health and nutrition applied to pets
- Growing consumer preference towards online shopping
- Rising number of pet D2C brands and start-ups
- Willingness of consumers to pay a premium for pet products
Impact of COVID-19 on the D2C Pet Food Market
The outbreak of the COVID-19 pandemic created a severe public health emergency globally due to its rapid spread across several countries. In order to combat and control the spread of this disease, numerous countries worldwide declared emergencies and announced complete nationwide, statewide, and citywide lockdowns, halting all travel, transport, manufacturing, educational institutions, and non-essential trade. These restrictions significantly reduced manufacturing and distribution, impacting numerous industries globally.
The prolonged lockdowns and social distancing restrictions presented significant opportunities for brands to develop an individual relationship with their existing consumers and attract anentirely new customer base via a more cost-effective and innovative, direct-to-consumer business model.
As a result of the COVID-19 pandemic e-commerce for pet products saw a significant increase. Social distancing norms and concerns about infection drove pet owners toward online pet retail. According to a study by American Pet Products Association in 2021, pet owners shopping online increased to 86% from 72% in the prior year. Before the pandemic, 60% of pet owners purchased pet products in person at stores. During the pandemic, offline shopping dropped to 41%, aligning more closely with the 46% of pet owners who prefer to purchase online with purchases shipped to their homes.
- Pet owners worldwide are becoming more conscious about choosing appropriate food for their pets, increasing the demand for premium and natural brands. These brands are in demand due to the growing awareness about the health & wellness of pets, humanization trends, and rising disposable income.
- For instance, according to APPA’s pet ownership report 2020, 43% of dog owners and 41% of cat owners buy premium pet foods. Additionally, according to a survey from Packa
ged Facts, pet owners, who have purchased higher-priced pet foods/premium pet foods, especially dog food, tend to purchase online.
To capitalize on this industry trend, many pet food manufacturers have started providing a variety of premium products, including gluten-free, GMO-free, organic, and multi-vitamins & minerals-rich products offerings enhanced health benefits, such as dog food with Omega 3 and 6 fatty acids for healthy skin, probiotics in dry formulas to help maintain digestive health, glucosamine for healthy joints and strong bones, which further supports the trend of premiumization.
Thus, the rising demand for premium pet food products is expected to support the growth of the direct-to-consumer pet food market. Based on type, the direct-to-consumer pet food market is segmented into meal, treats, and supplements. The meal segment is expected to register the highest growth rate during the forecast period of 2021-2028. The high growth rate of this segment is attributed to the rising awareness about pet health, increased spending on premium meals, and the growing demand for customized meals.
The large market share of this segment is mainly attributed to the rising number of dog adoptions, growing demand for high-quality dog food products, and the humanization of dogs. According to the American Veterinary Medical Association survey, 80% of owners consider their pets as family members and believe that having a dog at home helps them lead an active and stress-free lifestyle. Data shows that over 70% of all households in the U.S. owned a pet, out of which 82% of millennials had dogs.
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