Dynamics of the Australian petfood industry

Summary

In 2002, the Australian grocery trade sold in excess of $AUS1.1 billion of pet products through supermarkets – some 400,000 tonnes of wet and dry pet food products. Petfood products exported from Australia add about another 50% to this total. This project was designed to investigate the current situation and trends in the usage of meat and meat by-products by the Petfood industry, and explore opportunities for joint development projects between the Australian Meat Industry and the Petfood industry. 

The Australian petfood industry is dominated – in terms of volume and value – by two multinational companies, Masterfoods Australia and Nestle Purina. However, the rapid growth of Australian based Greens Foods (Supercoat Petcare Pty) and house brand products in dry petfoods is beginning to shift the balance toward local ownership. Ten other companies manufacture the remaining volumes.
The highest volume sectors of the market are the wet and dry dog foods, and wet cat foods. However the pet snacks sectors, while smaller in terms of volume, have been growing strongly, and this trend is expected to continue. The fresh petfood sector has shown by far the highest level of growth over the last few years.

The survey carried out in preparing this report provides a snapshot of the priority concerns and opportunities with regard to red meat by-products used in the petfood industry. While the number of respondents was limited, the companies represented by these respondents produce around 85% of the petfood manufactured in Australia. 

The survey revealed that the petfood industry is constantly looking for raw materials that will give its products an edge in the international arena, though the industry is still dependant upon sales within Australia for their mainstream livelihood. A focus on long term strategic research between the meat processing industry and petfood companies would enable meat companies to produce raw materials of greater value to the petfood industry, resulting in higher sales of meat products and greater competitiveness of the petfood industry. 

The red meat industry needs to position itself to supply high quality by-products to the growing petfood market. Increased usage of meat based materials will be driven by the same factors that drive the petfood industry as a whole – increased palatability (over an extended storage life), absence of contamination (physical and disease based), and good functional properties during manufacture. Recommended specific areas of cooperative development include the following.