Dogs and Cat Industry

Abstract

Pet food market has taken huge sales of 22.62 billion (USD). This industry paper will focus on the general manufacturer producing a variety of dog and cat foods including the best food brands and its growth. Food is a major aspect of pet care; therefore, providing dog’s and cat’s with the healthiest food brands are not only healthful, but very important to cats and dogs lovers. "The pet food market remains operating and requires continuing evaluation of the adaptation and efficiency of new products". The main idea of this paper is to understand how important are pets containing in people’s life, especially when it comes to know about the right food brands for an individual who owns a cat or dog.

Introduction

The pet food segment is one of the fastest growing segments within the food industry. This segment developed a great movement and a growing pet population by increasing and developing the performance of these animals. The pet food market has captured huge sales of 22.62 billion USD. This industry term paper will focus on the general manufacturer producing a variety of dogs and cat’s food. The NAICS code for this industry is (311111) using these 6 digits it allows you to find more information about the paper would be much easier to find. The purpose of this term paper is to know how important are pets to some individuals and what are the types of firm who makes foods to increase the abilities of dogs and cats.

The way I will try to collect data is by using the Monroe database to gather information on the industry as well as asking people who are dog and cat lovers who include the pet as family members.
According to research, the dog’s and cat’s industry mostly caters to local’s households. Over 65% of households in the United States own at least one pet, and the pet industry needs to cater to local pet stores to continue selling and making products that keep these pets alive, healthy and happy, also including toys, daycare, training, beds, cages, medical services and many other services.

With the numbers above this tells me that this industry does market to foreign countries. "According to the Japanese Market News, the Japanese pet population grew rapidly in the 1980s due to increases in leisure time, income, and the incidence of solitary lifestyles in which pets offer companionship. The pet food trend in Japan is for healthy food with such ingredients as green tea, (for the deodorization of pet wastes), avocado, and bio-flavinoids, (for tooth decay), indicating that a market exists for premium, healthy pet food and treats". In Japan this pet food is rapidly growing because of the demand of those individuals who owns pets.

Structure:

The Federal Food, Drug, and Cosmetic Act (FFDCA) requires that the pet food is safe to eat like human foods is safe to consume. "In 1958 the creators of the pet food industry created the Pet Food Institute (PFI), which was for the national trade association. The (PFI) performances as a representative for the industry before the various regulatory agencies and bodies, some of the sponsors researched the idea of this industry and decided to represents the U.S. industry in international meetings, and works on uniform standards for pet food". "(PFI) worked with the American Association of Feed Control Officials (AAFCO) to improve or to keep each other inform of any changes on pet food standards and regulations similar to this topic. Every state-owned apply their own set of laws and regulations that apply to pet food.

This Dog and cat food is sold in some local grocery stores, pet stores, as well as veterinarians. Veterinarian sale this item according to the best brand that are marketed as a health specialty for this pets. "Health consciousness for pets paralleled the general trend toward health consciousness for humans in the late twentieth and early twenty-first centuries". This great act led to the awareness to increased attention to the labeling and the obesity in pet’s development of more specialized pet foods, which can create greater health in the marketing of this products. As still today, Grocery stores, however, remained the largest channel for sales of pet food.

Conduct (how the power of the industry is affected its ability to set price above cost):
The power of this industry is very strong and extremely demanding because pet’s owner is willing to pay above cost to better ensure the health of their pets. But in the other hand, this overhead cost can affect those individuals that are willing to buy the best food brand for their pets, but do not have the money to provide their pets with the right brand, therefore, these owners buy below their price budget.

Performance:

The performance of this industry bring great profits to the manufactures of this products and for those stores that sales food for Cats and Dog. Owning a pet store can be a profitable business regardless of the performance of the larger economy. All Pet stores develop a great growth on revenue even during recessions, as owners have cut back on their own spending before reducing the standard of living for their pets. However, the competition from larger vendors means that a small business owner still has to observe their costs carefully to join the ranks of the profitable market.
The nutritional supplement for pets will always be on the increase and be greater for half of all U.S. animal nutrition sales in 2008, this product is cultivating more than 7 percent to $1.4 billion, according to "Nutrition Business Journal".

The dog’s and cat’s food segment of the pet food industry comprises primarily two types of firms. One is the large, general manufacturer producing a variety of dog and cat foods along with other types of feed and/or food for humans in other divisions or subsidiaries. These manufacturers sell their products primarily through grocery stores. The other type is the specialty firm that exclusively produces pet food, which is usually health-related or other specialized type. Traditionally, the general firms sell their product in grocery stores while the specialty firms sell their products through veterinary offices or specialty stores.

As todays date the pet market is witnessing a rapid growth because of the rising number of pet owners. This rapid growth is due to the demand and concerns of owners regarding nutrition and balance for the healthy diets of their pets; creating a significant prompted increase in dog and cat food market. Soon researchers say that some ingredients like Omega 3 fatty acids will soon be commonly incorporated in pet food such as Cats and Dogs. This product would become beneficial for the health of some of Cats and Dogs, as well as their owners. For example, with the implementations of the Omega 3 fatty acids, much of this food will have low protein, low ash and easily digestible for the cats and dog’s species, ensuring that owners should make sure that their pets stay 100 percent healthy. According to Pet Food Institute (PFI), sales of cat and dog food rose to $19 billion in 2012. People who have pets such as cats and dogs are willing to spend more on products that promote the health and happiness of their pets. This cats and dog’s food trends will make an attractive opportunity for local pet businesses and as well the makers of this industry. "The rising demand for premium and organic foods prompts manufacturers to produce high-quality products. Increasing awareness about health and health-related issues concerning pets, such as obesity, creates opportunities in the pet food industry".

The food for cats and dogs remained strong and continuing growing in the market, which means that the concentration is still high in this present year. Concentration remained high in 2015, with the top international players Nestle Romania and Mars Romania together accounting for a 50% share. Domestic players were more numerous but their share could not exceed that of international companies and private label products. The main domestic player, Nordic pet food distribution SRL, ranked third, but was far behind the top player. Although, they are focusing to rise tougher and with a much better plan in 2016 according to researchers. The only change it can occur is coming from the modification of shares for international player, but without noticeable changes in its overall positions. "Whiskas healthy option" (2014).

"The Food and Drug Administration (FDA) regulates cat’s food, bag of dog’s food, or box of dog treats and snacks in all the company’s storerooms that sells this type of food. The Federal Food, Drug, and Cosmetic Act (FFDCA) requires that all animal foods, like for human foods, be safe to eat, produced under sanitary conditions, contain no harmful substances, and be truthfully labeled".
Customers are becoming more demanding due to the health of their pets, there is a high sensitive to the cost of this type of food. also, keeping in mind that there are many available stores to choose from but there is not as many options to choose from when it come to the labeling of this types of food. Smaller amount of competition, but that is changing quickly with the growing market in today’s date, and it will still continue growing because owners are observing the health of their cats and dog’s; especially when buying their pets, the best brand label in the market.

In the above chart it shows how much money pets owner spent in the U.S. market in 2015. $23.05 billion is what pet owners spent in annual years giving this industry an incredible increase in profit. This chart gives me the total overview total of how expensive this services actually are. The pet services such as the grooming and boarding of these cats and dogs is $5.41 billion this is almost as high as human service industries. In this year, about 20 percent of U.S. pet products were sold through pet specialty chains. Many discount stores accounted for over 23 percent of just pet product sale.

This graph tells me that the food of dogs is higher than the cats, although both are very high and demanding in local areas. The treats and snacks are both demanding due to the fact that some owners are looking for good quality brands and healthy choices for their pets.

Structure and Conduct :

The Federal Food, Drug, and Cosmetic Act (FFDCA) requires that the pet food is safe to eat like human foods is safe to consume. "In 1958 the creators of the pet food industry created the Pet Food Institute (PFI), which was for the national trade association. The (PFI) performances as a representative for the industry before the various regulatory agencies and bodies, some of the sponsors researched the idea of this industry and decided to represents the U.S. industry in international meetings, and work on uniform standards for pet food". "(PFI) worked with the American Association of Feed Control Officials (AAFCO) to improve or to keep each other inform of any changes on pet food standards and regulations similar to this topic. Every state-owned apply their own set of laws and regulations that apply to pet food.

This Dog and cat food is sold in some local grocery stores, pet stores, as well as veterinarians. Veterinarian sale this item according to the best brand that are marketed as a health specialty for this pets. "Health consciousness for pets paralleled the general trend toward health consciousness for humans in the late twentieth and early twenty-first centuries". This great act led to the awareness to increased attention to the labeling and the obesity in pet’s development of more specialized pet foods, which can create greater health in the marketing of this products. As still today, Grocery stores, however, remained the largest channel for sales of pet food.

To ensure better my term paper I will research my information for this industry on the Monroe Data Bases, and as well using other resources such as Google scholar and local pet stores around the area. One major source to collect information’s about this industry in asking Dog’s and Cat’s lovers and they might know as more information’s than local pet shops or other resources.

The pet food market is still increasing at a very fast paste, a recent data revealed a tremendous increase in the pet food population reaching 3.5 billion in dogs and cats worldwide in 2014. The pet food industries are always maintaining a great care innovating and developing new products formulas. In previous years such as January 2013 and October 2014 more than 4,000 cats and dog’s snacks and 6,000 in wet pet foods, 3,000 in non-dry foods were launched on the market worldwide. When making this new products, the manufacture of the pet foods industries must find a compromise between nutritional quality because of its demanding including tastiness, especially for diets claiming health benefits and the obesity care for these pets.

Conclusion:

This market will continue its growth in a fast paste with positive performance for cats and dogs because the manufactures are focusing on continuing making the best foods for dogs and cats, furthermore, the demands of this pet lovers will increase all companies that provide this services. Customers are becoming more demanding due to the health of their pets, therefore is a high sensitive to the cost of this type of food. People who have pets such as cats and dogs are willing to spend more on products that promote the health and happiness of their pets. This cats and dog’s food trends will make an attractive opportunity for local pet businesses also the makers of this industry.

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