The report shows spending for the entire US pet industry reached US$48.35 billion in 2010, a 6.2% increase over 2009, with petfood accounting for US$18.76 billion in sales, a 6.8% increase over the previous year. For this year, APPA projects overall pet spending to grow another 5.1%, to US$50.84 billion, with petfood ending the year at US$19.53 billion (4.1% growth).
While it's nice to see such positive sales and growth data for petfood, APPA is a little more bullish than Packaged Facts, a research organization that follows the US pet industry very closely. Its latest report, Pet Food in the US, 9th Edition (released in March), shows 2010 US petfood sales ending up at just a little less, US$18.35 billion, than APPA's figure, but at only 2.8% growth over 2009. Moreover, Packaged Facts projects US petfood sales to grow just 3% this year (to about US$18.9 billion) and to average only about 3.5% annual growth through 2015.
By the way, I asked David Lummis, senior pet market analyst for Packaged Facts, why his figures were lower than APPA's, and he said he hasn't been able to get to the bottom of the discrepancy. (You can hear David's update on the US market and suggestions for marketing the benefits of pet ownership during Petfood Forum 2011.)
One thing APPA and Packaged Facts do agree on is that veterinary and pet healthcare is the fastest growing segment of the US pet industry. It now accounts for a bigger piece of the overall pet spending pie than petfood, 36% vs. 33%. According to Packaged Facts, veterinary services in the US reached US$19.69 billion in sales in 2010, a 7% increase over 2009. APPA breaks down its data between veterinary care and over-the-counter medicines, the latter showing up as part of a supplies segment of the market, but still pegs year-over-year growth for veterinary care spending at 8.1%.
Adding health-related claims to petfood packaging and marketing is already a tricky business under current US regulations, and some industry professionals speculate it could get even more difficult under potential changes stemming from the Food Safety Modernization Act. But the more pet owners treat their pets like human family members and seek the same kind of healthy, functional nutrition for their furry children as they do for themselves and their human children, the more it might pay to include functional ingredients in your petfood and treat products.