• by Tanya Gazdik , September 27, 2015

So-called “premium” products are tops on consumers lists in the pet market, even when it comes to the $5.4 million market for treats and chews, according to a report from Packaged Facts.

For over a decade, premiumization has been driving much of the pet market growth, according to “Pet Treats and Chews in the U.S.”

The pet overall market has been seeing little expansion in terms of dollar and volume sales, but what gains there have been are primarily a result of higher-priced, higher-quality products entering the market, according to David Sprinkle, research director, Packaged Facts.

“Absent any other galvanizing factors toward increased pet ownership, ongoing premiumization is crucial if pet market dollar sales are to continue to rise," Sprinkle says in a release.

“Premium” and “super premium” products are those that contain special nutraceutical ingredients and those offering "human-quality" ingredients adopted from human food market trends, such as superfruits, ancestral grains, and exotic proteins.

In the pet food arena, margins on super premium foods can reach 40%, compared with 30% for premium brands and 20% or less for standard brands, according to the report.

Nutraceutical treats in particular are of increasing significance to the premium pet products segment, especially because the "graying" of America's pet population is an important driver of increased pet market spending in many areas. The treats contain supplements such as glucosamine and claim to improve pets’ health while minimizing aches and pains, such as those from arthritis.  

For pet food and treat marketers interested in offering pet owners nutraceutical benefits in a format pets will enjoy, nutraceutical treats and chews are the perfect middle ground between treats and supplements, according to the report.

Consumers are better able to rationalize any extra expense associated with premium nutraceutical products because they are perceived to offer "2 in 1" in the form of treats that provide treatment for health conditions.

According to Packaged Facts' January 2015 pet owner survey, 65% of dog owners and 55% of cat owners agree that pet treats offering special nutrition can be beneficial to pets with specific health conditions.  Among pet owners polled, one-third strongly agreed and one-quarter somewhat agreed that pet treats played an important role in their pets' health.

The report also looks at future trends, including the importance of product safety, the encroachment of natural products in mass-market outlets, the impact of humanization on the treat market, and growth of functional and grain-free treat options.