IBISWorld Market Research
The indispensable nature of pet food has kept industry revenue from declining drastically
Los Angeles, CA (PRWEB) July 05, 2012
City: Los Angeles, CA
The Dry Pet Food Production industry has weathered the economic storm of the past five years better than most manufacturing industries. Owing to its indispensable products, revenue has declined at an annualized rate of only 1.9% to $9.8 billion over the five years to 2012. While consumers refrain from purchasing pets during times of economic hardship, those with pets typically do not sacrifice purchases of pet food during these times. As a result, the industry exhibits a delayed cyclical trend, with revenue declining a couple of years after consumers stop purchasing pets, according to IBISWorld industry analyst Justin Waterman. Revenue fell heavily in 2010 and 2011, stemming from fewer animals to feed. In fact, the number of American dogs and cats declined in 2010 and is expected to have grown slowly since then. Although pet ownership is expected to grow at a slow rate in 2012, it is enough to bring the total number of dogs and cats to an all-time high at 173 million in 2012. This will spur industry revenue growth, which is forecast to fall 2.2% in 2012, then rise in 2013.
The Dry Pet Food Production industry is moving toward an interconnected trade system, with both imports and exports rising over the past five years and forecast to rise over the next five. Exports are expected to grow at a stronger annualized rate over the five years to 2012 than they will in the next five years owing to the decline (and eventual forecast rise) in the value of the US dollar, says Waterman. When the value of the dollar declines, foreigners can purchase a greater quantity of US industry products. Imports also grew strongly over this period.
The industry has experienced an increasing level of concentration over the past five years, resulting from expansion through acquisitions. The major companies include Nestle SA, Mars Inc. and the Colgate-Palmolive Company. Industry consolidation is expected to continue in the future through sustained merger and acquisition activity, primarily driven by major players. However, there will remain room for niche players like organic dry pet food producers. Greener pastures lie ahead for the industry: revenue is forecast to rise in the five years to 2017. The process of selling dry dog and cat food directly to retailers allows industry participants to generate more revenue and increase their margins because they can sell to retailers at a higher rate than they would sell to wholesalers. Accordingly, IBISWorld forecasts industry margins to rise in 2017. The lure of higher profit is expected to draw in new firms to the industry. For more information, visit IBISWorld’s Dry Pet Food Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures dry dog and cat foods, which are generally grain and oilseed based.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
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