1. Industry Chain Overview
Pet food is a high-end animal food specifically designed for pets and small animals, falling between human food and traditional livestock feed. Its primary function is to provide various pets with the basic nutrients necessary for life, growth, development, and health. It boasts advantages such as comprehensive nutrition, high digestibility and absorption, scientifically formulated, high-quality standards, ease of feeding, and the ability to prevent certain diseases. Pet food uses vitamins, grains, and meat as its main raw materials. The downstream industry mainly consists of various distribution channels, currently including three main types: professional channels, supermarket channels, and online sales channels. The end consumers are various types of pets.
From a market perspective, my country's pet food consumption is dominated by foreign brands, and domestic pet food brands have not yet established a competitive advantage. Consumers lack confidence in domestic pet food brands, resulting in insufficient market competitiveness. However, in recent years, the development of domestic pet food brands has gradually improved, especially in online channels where they have fully leveraged their advantages.
2. Upstream Market Analysis
The upstream raw materials for the pet food industry generally include meat and grains. The prices of these products fluctuate significantly with the market, resulting in low bargaining power for the pet food industry.
According to the National Bureau of Statistics: In 2020, China's meat production was 77.4838 million tons, including 4.9231 million tons of mutton and 6.7245 million tons of beef.
Data from the "2022-2028 China Pet Food Industry Development Strategy Planning and Investment Direction Research Report" released by Zhiyan Consulting shows that in 2020, China's grain production was 616.74 million tons, including 134.25 million tons of wheat, 260.67 million tons of corn, and 22.87 million tons of beans.
3. Midstream Market Analysis
The earliest pet food, dog food, originated in the UK around 1860. In the 1930s, canned cat food and dry meat-based dog food were introduced to the market. In the 1950s, dry, extruded pet food developed rapidly. From the 1960s onwards, the variety of pet food products increased continuously, and the pet food market became characterized by significant diversification.
The global pet market has gradually matured. Pet food, as an important branch of the pet industry, represents the largest segment of the market, with its share of the global pet food market increasing year by year. In 2020, global pet food production reached 29.3 million tons, a 5.8% increase from 27.7 million tons in 2019.
China's pet food industry emerged in the 1990s. In 1993, Mars, Incorporated's renowned dog food brand "Pedigree" and cat food brand "Whiskas" entered China, opening up the professional pet food market in the country. With the rise of China's pet economy, the pet food industry has received increasing attention. Pet food is fundamental to ensuring pet health, and people's pursuit of pet food is gradually converging with that of human food. Preventative and proactive health measures have become the most important issues for consumers. In recent years, the output and demand of China's pet food industry have continued to increase. According to data from the China Feed Industry Association, from January to August 2021, China's pet food output was 620,000 tons, a year-on-year increase of 13.5%.
