Can the pet food industry do it? Look at the industry analysis and decide

Pet food is a kind of food specially provided for pets, mainly to provide various pets with nutrients needed for growth and health. It has the advantages of comprehensive nutrition, high digestibility and absorption, scientific formula, quality standard, convenient feeding and use, and can prevent certain diseases. Pet food is used most frequently, continuously and stably in the life of pets, covering the whole process from birth to death. It is a rigid demand for raising pets, and is currently the sub industry with the highest proportion in the pet industry.

Characteristics of pet food industry

Regionality: Due to the different economic development and consumption levels of residents in different regions, pet food consumption has certain regional characteristics. For example, in first tier cities such as Beijing and Shanghai, the per capita income of residents is relatively high, which requires higher brand awareness and quality of pet food, and pet food consumption is also higher.

Seasonality: On the whole, the pet food industry has no obvious seasonal characteristics. However, in recent years, with the increase in the proportion of e-commerce sales in pet food sales channels, to some extent, affected by e-commerce "shopping festivals", pet food sales will fluctuate in a short term.

Barrier to pet food industry

1. Brand barrier

With the improvement of residents' consumption level and the popularization of scientific pet breeding concept, the emotional attribute of pets for modern pet families has become increasingly prominent. Pet owners are increasingly concerned about the quality and nutritional value of pet food. Pet keepers are often willing to pay high prices to pursue the quality and richness of pet products. High consumers tend to buy big brands with more guaranteed quality.

2. Technical barriers

There are many technical fields involved in the research, development and production of pet food. The formulation design of pet food is highly professional, and various process parameters involved in production need to be accumulated for a long time. Enterprises in the industry can only be recognized by the market after years of technical exploration and production experience accumulation. New entrants lack technology precipitation in technology development and technology application, and product development has technical and quality risks. It is difficult to form effective technical competitiveness in a short period of time, and there are high technical barriers to new entrants in the industry.

3. Sales channel barriers

The sales channels of pet food industry are mainly divided into online and offline channels; To establish a perfect offline sales channel, we need to build a marketing network and cultivate consumer brand awareness and other consumption habits. We need to continuously promote investment, an effective management system and long-term accumulation of time, which constitute a certain barrier to new entrants in the industry; In terms of online channels, the growth of product sales achieved by major domestic e-commerce platforms mainly depends on the improvement of visitor traffic. Businesses need to pay marketing promotion fees to e-commerce platforms. Brand awareness and product recognition need to be based on continuous marketing investment. Therefore, the continuous and perfect brand promotion strategy online and offline forms a sales channel barrier for new entrants to the industry.

4. Scale barrier

On the one hand, large-scale production enterprises can purchase raw materials in a centralized way to improve their bargaining power. On the other hand, large-scale production enterprises can carry out modern and standardized production, with more stable product quality, higher production efficiency and lower production costs. Relatively speaking, the production costs of smaller and new production enterprises are usually relatively high, and their anti risk ability is not strong.

Reasons for the current strong demand in pet food industry

Influenced by the triple drive of economic level, population structure and cultural factors, the current market demand is strong.

Under the influence of the accelerated urbanization process, people have flocked to cities. On the one hand, the number of empty nesters has increased rapidly; On the other hand, because of young people's consumption concept, emotional sustenance and other factors, raising pets within the scope of economic affordability has become a popular trend among young people.

The economic level is closely related to the development of the pet food market. The increase of per capita income has promoted the continuous upgrading of residents' consumption. More and more people are able to afford the cost of keeping pets, so that they can choose to pet or better pet.

Challenges Facing the Pet Food Industry

1. China's pet food industry started late, with foreign enterprises occupying a large market share

The pet food industry in China is in the early stage of development. Because the pet food industry in developed regions started earlier, international brand enterprises took the lead and occupied a high market share in the domestic pet food market. Secondly, foreign brands mainly focus on the medium and high-end market, and have obvious advantages in the field of medium and high-end staple food. In contrast, domestic manufacturers have weak brand building foundation, insufficient brand diversity, small consumer coverage, more major products are distributed in the medium and low-end markets, and the brand premium is still not as high as that of international brands.

2. Industry standards need to be improved and supervision efforts need to be strengthened

China's pet food industry started late. At present, the domestic industry standards and norms system is gradually being established, but the industry has not yet formed a professional market with orderly development. More and more enterprises see the prospect of the pet food industry and join the market competition, especially the rapid increase of new enterprises in 2021. However, due to the lack of binding industry standards, the industry has a low threshold for entry, leading to uneven product quality. Some bad enterprises have disrupted the healthy and orderly development of the pet food industry.

3. The permeability of pet keeping is at a low level

In 2020, the penetration rate of pets in developed countries such as the United States, Australia and Canada will be more than 50%, and that in Britain, Germany and Japan will also be more than 25%. However, the penetration rate of pets in China is now about 22%, which is only one third of that in the United States, far from that in developed countries.

Development trend of pet food industry

1. Pet food manufacturing is becoming increasingly intelligent

With the rapid expansion of the pet industry, the demand for pet food continues to grow. Having strong production capacity and maintaining the high quality of products have become an important competitiveness of pet food manufacturers. In order to meet the comprehensive requirements of the pet food industry, such as formula differentiation, production scale and quality standardization, pet food manufacturing is developing towards intelligence and standardization.

2. Quality control of pet food emphasizes standardization and green safety

With the enhancement of national control over pet food safety and hygiene, and green safety becoming the focus of consumers' attention on pet food, the quality control as the last "firewall" before pet food leaves the factory for circulation is becoming increasingly critical. At present, with the gradual establishment and improvement of the industry standard, the quality control of pet food will be more standardized, the testing items will cover more comprehensive fields, and the testing functions will be more perfect.

3. The rise of local brands in the domestic market and the increase of industry concentration are beneficial to leading enterprises

Consumption upgrading and demand diversification enable consumers to pay more attention to product quality and pay for cost-effective products. Local brands welcome development opportunities in the context of the rise of e-commerce sales channels. With the popularization of scientific pet care, pet owners will improve their requirements for nutrition, quality and safety of pet food, and head enterprises will gain a larger market by virtue of their scale advantages, brand advantages and technological advantages. At the same time, the entry of industrial capital will accelerate the industry integration. In the future, customers, funds and all kinds of resources will be concentrated in the leading enterprises. The advantages of leading enterprises will be further amplified, and the industry concentration will be further improved.