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During the pet owner's pet raising process, pet food is the part with the highest consumption frequency and amount. On the industry side, the pet food industry is also the largest and most fiercely competitive segment of the pet industry.
In recent years, the development speed of the global pet industry has been astonishing, especially in emerging markets such as Southeast Asia. People's attention to pets is continuously increasing, and their market growth rate is no less than, and even some regions have surpassed other mature markets.
According to a survey, the current national contract purchase price for fresh milk has dropped from over 4 yuan per kilogram last year to around 3.75 yuan. After the contract expires, the purchase price of fresh milk is only about 3 yuan per kilogram, falling below the average cost line of 4 yuan per kilogram of fresh milk. The significant decline in fresh milk prices has led to losses for the entire dairy farming industry, and some have even fallen into survival difficulties.
What is the market situation in the dairy farming industry? Recently, the prices of fresh milk in 10 major producing provinces have decreased year-on-year. What is the overall situation of raw milk production? Why have prices weakened recently? How to promote high-quality development of the dairy industry?
The pressure from feed costs has once again brought attention to the raw milk industry. Since 2021, domestic feed prices have been continuously rising, and this year, the rise in prices of soybean meal, corn, and other products has further increased the breeding costs of upstream pastures. Even the occurrence of harvesting green wheat for feed, although on a small scale, reflects to some extent the problems in the breeding sector.
Despite the significant impact of the epidemic on fast-moving consumer goods last year, the pet race track still achieved high single digit growth. According to the 2022 China Pet Consumption Report, the size of the urban pet (dog and cat) consumption market in China in 2022 was 2706 billion yuan, an increase of 8.7% compared to 2021. Among them, staple foods, snacks, nutritional supplements and other food products are still the main consumer market for pets, with a market share of 50.7%.
The TOPS Pet Expo, held from May 5th to 7th, was the first national pet industry exhibition held in Shanghai after the epidemic. 800 exhibitors and over 4000 participating brands made their appearance on site, bringing together 47628 professional visitors from all over the country and 132436 public consumers. It also brought the pet industry's long-awaited human fireworks to the city of Shanghai.
With the development of modern society, pets have become increasingly important as new family members in people's hearts, and the "pet economy" has also developed from "heating up" to "booming". The Chinese pet industry has ushered in a wave of rapid development, and the core growth driving force of the industry has shifted from raising to upgrading consumption.
According to the American Pet Products Association (APPA), the total sales of the US pet market industry in 2022 exceeded $136.8 billion, a year-on-year increase of 10.8%. Among them, pet food and snack sales: the category with the highest expenditure in 2022, with a total amount of 58.1 billion US dollars, accounting for 42.5% of the industry's total sales, a year-on-year increase of 16.2%. Showing strong consumption capacity and development resilience. Looking back at the past decade, the size of the US pet industry has increased from $53.33 billion in 2012 to $123.6 billion in 2021, with a GAGR of 8.8%. Even during the 2008 financial crisis, the size increased by 4.9% year-on-year, showing a clear anti cyclical characteristic.
Pet food is a rigid demand for pet ownership, which runs through the life cycle of pets. It has the characteristics of high repurchase, low price sensitivity, and strong stickiness, and is also the largest expenditure category for pet consumption in China. According to data from Debang Securities Research Report and the "2021 China Pet Industry White Paper", in recent years, with the upgrading of consumption, the food market share of pet consumption has decreased, but it still accounted for over 51% in 2021. From the perspective of consumption amount, the size of China's urban pet (dog and cat) food market has expanded from 15.7 billion yuan in 2012 to 128.2 billion yuan in 2021, with a compound growth rate of 26%.
The pet economy has risen by over 8% since the beginning of the year. As an important branch of the big consumer market, the market performance of the pet related industry is closely related to the rebound in consumption.
With the joint efforts of the demand and supply sides of the pet industry, the scale of the pet industry has grown rapidly, and it is expected that the market size will reach 800 billion yuan by 2025. At present, there is a significant gap in the standards for pet feed in China, which seriously lags behind the development needs of the industry, especially the standards for pet food additives. Out of over 400 additives, only over 100 standards have been formulated
The first China Pet Food Conference, hosted by the China Feed Industry Association, was held in Beijing from February 21st to 22nd.
In China, food consumption is mainly divided into four categories: rations, feed, industry, and seeds. Among them, feed, as an important breeding material for producing meat, eggs, and milk, will consume approximately 380 million tons of feed in China in 2022, accounting for approximately 48% of the total grain consumption, and will reach more than half in the future. Feed safety has become an important issue facing current food security.
Industry insiders point out that in the coming years, the number of pets in China is expected to resume growth, while offline stores and pet hospitals will also experience rapid development. According to data, the growth rate of China's pet healthcare industry decreased from 17.8% in 2019 to 5.7% in 2020, but there was a strong rebound in 2021, with a growth rate of 27.6%.
As the Chinese New Year approaches, the market growth rate of pet rabbits and related products is also increasing. According to public data, the prices of living pet rabbits in multiple regions have gradually increased since New Year's Day. Currently, the prices of different breeds and colors of pet rabbits have increased by an average of 50%, while the prices of imported varieties have doubled. At the same time, the market for pet rabbit related products such as rabbit food and rabbit pens has also experienced a peak sales period.
The Spring Festival is approaching, and many "poop shovelers" are preparing to go home to celebrate the New Year, but they are faced with a problem: who will feed their pets if they are gone? On the WeChat mini program, bookings for door-to-door feeding services during the Spring Festival are very popular. As pets penetrate into people's lives, the public is paying more and more attention to the emotional appeal of pets. Many brand merchants use pets as a gimmick to attract consumers.
Recently, Boqi Pet, "China's No. 1 pet e-commerce company", released its performance report for the first half of fiscal year 2023 as of September 30, 2022. The financial report showed that revenue dropped to 589.6 million yuan, compared with 6.04 in the same period last year. 100 million yuan decreased by 2.38% year-on-year; the loss continued, at 29.5 million yuan, a 64.0% decrease from the net loss of 81.9 million yuan in the same period of fiscal year 2022. After the financial report was released, Boqi Pet’s share price fell 10% on the New York Stock Exchange.
In China, more and more families are keeping pets. The "White Paper on China's Pet Industry Trend Insights in 2022" released by JD.com shows that the number of pet-raising households in China will reach 91.47 million in 2021, and it is expected that the number of pet-raising households will exceed 100 million in 2022.
In recent years, the pet consumer market has shown great vitality, the scale of the industry has continued to expand, and various industrial chains covering the entire life cycle of pets have been formed. The pet economy has become a popular track. In the past, Yuanfei Biotech, the "first dog rope stock", was successfully listed, and later, Tianyuan Pet, the "first cat climbing frame stock", passed the review of the Shenzhen Stock Exchange Listing Committee.
Although the 11.11 carnival has cooled down, it has not affected the pet economy from becoming a hot track. Judging from the activity data of various e-commerce companies during this year’s Double Eleven, pet consumption is experiencing an all-round explosive growth.
The pet economy is booming, and the total pet market in the United States exceeds 100 billion US dollars. According to data from the American Pet Products Association (APPA), global pet market sales reached US$307.21 billion in 2021, of which the US market accounted for 40.2% of the world, reaching US$123.6 billion, ranking first in the world, far surpassing the second-ranked Brazilian market ( 5.2%). The U.S. market has grown steadily in the ten years from 2012 to 2021, with a CAGR of 9.79%, of which the growth rate in 2021 will reach 19.31%.
