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The pet food industry has grown significantly in the last two decades. Pet food industry sales were about 53 billion dollars in 2012 in the United States alone (Pet Industry Market Size & Ownership Statistics, 2013). The industry has grown significantly in other countries as well. Producers and suppliers have been competing for consumers intensely. The producers and suppliers have created microeconomic conditions to maintain a competitive edge in the industry. This paper will focus on the pet food industry, microeconomics and government in the pet food industry.
The United States pet food industry is by far the largest in the world, accounting for 57 billion dollars out of the 95 billion dollars of global sales in 2012 (Dog Care Market, 2013). United States pet food industry is unique in that consumers are willing to pay more because they treat their pets as family members. In addition, Americans are becoming increasingly concerned about the health of their pets and prefer natural pet foods with a low percentage of additives and artificial foodstuffs (Pet Food and Pet Care Products in the U.S., 2009). In that regard, pet food prices in the United States are more expensive.
The pet food industry is very resilient. According to Chris Cattini (2011), this industry has been growing remarkably even in times of economic hardships. Although the 2008 recession affected the pet food industry, it picked up very well immediately after the recession (Cattini, 2011). This is probably the reason why the pet food industry sales have been increasing every year in the last two decades. The pet food sales in 1994 were just 7 billion dollars compared to 53 billion dollars in 2012 (Pet Food Market Outlook 2009-2010, 2010).
Producers and Suppliers
A number of American companies dominate the pet food industry, including Mars Inc, Colgate-Palmolive, Procter & Gamble, Del Monte Foods. The major global producers and suppliers are Nestlé SA, Agrolimen SA, Uni-Charm Corp, Nutriara Alimentos Ltda, Total Alimentos SA and Nisshin Seifun Group. These pet food producers are introducing new balanced and complete products every year to curb the increasing competition in the industry (Bond, 2008).
Demand, Consumers and Government Regulations
The demand for pet food has been increasing dramatically with the global population increase. The global population is increasing and therefore the number of people keeping pets is increasing as well. The Food and Drug Administration regulates the pet food industry at the national level in United States while the Association of American Feed Control Officials evaluates the rules, policies and regulations for the individual states regarding pet food industry. The Federal Trade commission also plays a role in regulation of the pet industry. Pet food for United States consumers must meet the standards of these institutions for the regulatory agencies to authorize their sale in this jurisdiction (U.S. Pet Market Outlook 2009-2010, 2009).
Pet food industry has grown to be a large business empire in the United States and in the world. Emergence of new companies in the same sector creates stiff competition for the large market players. It is evident that the companies in this sector have to establish good products and market them well to remain competitive. In addition, the government has to protect these stakeholders by putting place strict rules and policies. With that, the pet food industry in the United States will continue to thrive, better than before.
Bond, J.T. (2008) Top 10 global petfood leaders. Web.
Cattini, C. (2011). Dogs Dinners and Cat Cuisine. IFIS. Web.
Dog Care Market – Regional level to 2013. (2013). Web.
Pet Food and Pet Care Products in the U.S. (2009). Web.
Pet Food Market Outlook 2009-2010: The New Value Equation. (2010). Web.
Pet Industry Market Size & Ownership Statistics. (2013). Web.
U.S. Pet Market Outlook 2009-2010: Surviving and Thriving in Challenging Economic Times. (2009). Web.