BRACKNELL, UNITED KINGDOM — Private label pet food products are taking the European pet food industry by storm, according to latest data from Circana. Retailers throughout the European Union launched more private label products, convincing many pet parents throughout the region to ditch their favorite brands for private label formulas.
According to the data, EU retailers increased their share in the €10.8 billion ($11.4 billion USD) pet nutrition segment by 18% (about €3.6 billion or $3.8 billion USD) during 2022 across Europe’s six largest pet markets — France, Italy, Germany, Spain, the United Kingdom and the Netherlands. In the last quarter of 2022, EU retailers ramped up their market share by 25%.
Private label products now boast a 34% value share in the pet food sector throughout Europe, according to Circana, with the largest shares in Germany and Spain. In the overall fast-moving consumer goods (FMCG) market, private label products account for 38% (about €229 billion or $241 billion USD) of value sales in Europe.
Additionally, value sales of pet food have risen throughout the region during the past four years, reaching €10.8 billion ($11.3 billion USD) and representing 5.9% annual growth in 2021. During 2022, this growth doubled to 12%, mainly driven by skyrocketing pet ownership rates and inflation, according to Circana. The United Kingdom and Germany led most of this growth with value sales of pet food increasing 12.7% and 11.3%, respectively.
Though inflation and pet ownership are strong influencers of the European pet food market’s growth, innovation in the space also rose to 39%, as shared by Circana.
“Led by manufacturers and retailers in the UK and Italy, there has been a lot of innovation around breed and age-based nutrition,” said Ananda Roy, global senior vice president of strategic growth insights at Circana. “This health and wellness focus taps into the boom in new pet ownership that started during the pandemic and allows manufacturers to follow the life of these pets as they grow. Other innovations include the use of human food ingredients, such as vegetables and pulses as a source of high protein, low fat and balanced nutrients, especially where traditional ingredients may cause allergies or sensitivities.”
New product launches in pet food, including both private label and national brands, accounted for 9% of total pet food sales in 2022, according to Circana’s data. This increase in innovation was most apparent in Germany and the Netherlands, with new product launches contributing 28% and 11% of total pet food sales, respectively.
Significant inflationary price increases of around 12% proliferated all consumer goods categories throughout Europe, including the pet food segment. This led many consumers to cut back on their purchases, declining volume sales for several categories including overall FMCG. However, the pet food market remained resistant to inflationary pressures, experiencing a small 0.4% increase in unit sales, according to Circana. In comparison, unit sales of frozen human food products declined 4.1%.
Though unit sales remained strong in pet food, rising prices on their favorite pet foods convinced many pet parents to switch brands to private label, according to Circana.
“Pet food has traditionally been dominated by trusted national brands, so the strides retailers have made developing as good as quality alternatives that appeal to consumers’ very real need to lower the cost of their shopping basket are remarkable,” Roy said. “It highlights, once again, the growing regard for private labels; more consumers perceive them as being innovative and as good or better than many of the national brands that they compete with. The quality of private label pet food in particular, with specialized nutrition or the inclusion of high-quality human food ingredients, differentiates private label significantly.”
In addition to a rapidly growing pet food market, Circana shared that the pet treat and toys sectors are also witnessing strong growth. Both categories grew 13.1% in 2022 throughout Europe, adding an additional €50 million ($52.5 million USD) in value sales to the overall pet sector.
Keep up with the latest pet food trends on our Trends page.