By Hsu Yuan-Chang, General Manager

The "Pet Economy" has become a global consumption trend that spans all age groups. Although the pet ownership boom that emerged during the pandemic has subsided, spending on pet food, supplies, and services continues to grow. With the increasing number of single households and an aging population, the pet industry is thriving, with a projected compound annual growth rate (CAGR) of 6.1%. In the U.S. alone, consumer spending on pets and pet-related products was estimated at $123.6 billion in 2021, with projections suggesting this figure could rise to $275 billion by 2037.

I. The Growing Business Opportunity in Pet Food

As living standards improve, the rise of social media short videos, and the spread of pet care knowledge, pet owners are becoming increasingly concerned about pet health, leading to a heightened sense of responsibility. Spending on pet healthcare and related services has diversified, driving the growth of the pet economy.

According to Pet Biz Marketer data, pet food accounts for three-quarters of total sales in the pet industry. Among these, raw pet food is a continually growing segment. A survey conducted by the Ontario Veterinary College at the University of Guelph revealed that 66% of dog owners and 53% of cat owners feed their pets raw food. This trend is also reflected in online search data, with Google searches for "raw dog food" increasing by 169% over the past decade.

II. A Promising Future: The Pet Healthcare Market as a Battleground

Pet healthcare products are a segment within the pet food sector, encompassing pet staples, snacks, and health supplements. These supplements are designed to meet the nutritional needs of pets at different life stages, aiding in their healthy growth and development. The main products include vitamins, proteins, and probiotics. As the pet food market rapidly expands, more and more startups are entering the field, leading to an influx of new pet food brands.

1. Precision in Pet Healthcare and Nutrition

Taiwan's pet food market is expected to reach $1.05 billion by 2028, growing at a CAGR of 6.40%. With such remarkable growth, the pet economy is set to become Taiwan's next trillion-dollar industry. As pet owners place increasing importance on pet health, food, and health supplements focusing on precision nutrition are becoming more popular. The demand is shifting from "eating enough" to "eating well" and "eating healthy."

Changes in the promotional points of major brand products indicate that the era of refined pet care has arrived. Product promotions are gradually shifting from high cost-effectiveness to functional nutrition. For example, some brands on the market focus on staple foods designed for different age groups of cats, adding nutritional pet health powders. Many ingredients can also be used for pets, especially patented ingredients for pet-specific probiotics. Our team also creates differentiated generic products, providing brand owners with development ideas.

As pet owners' needs become increasingly segmented, pet healthcare products are advancing toward refinement. On one hand, healthcare products are beginning to offer customized solutions for different breeds, life stages, and sizes of pets. On the other hand, products targeting specific functions, such as heart protection, joint health, and prevention of major diseases, are growing rapidly. For brand owners, offering pet healthcare products that provide detailed care for different life stages—such as beauty care, calcium supplementation, skin protection, and gastrointestinal conditioning—is a market opportunity worth paying attention to.

In recent years, many Taiwanese startups have gradually cultivated loyal customer bases through social media management and differentiated product claims, making them formidable competitors.

2. Rapid Development of Gastrointestinal Products, High Discussion on Fish Oil and Probiotics

Digestive system diseases have become the leading cause of pet dogs and cats visiting veterinary hospitals, with gastroenteritis being the most common. Among them, digestive system diseases account for nearly 16% in cats and 20% in dogs. Pets such as Corgis, Pomeranians, Ragdoll cats, British Shorthairs, and Norwegian Forest cats often have weak stomachs, requiring regular intake of pet food or health supplements containing probiotics.

Among health supplement types, fish oil is also a highly discussed product. Growing dogs and cats need sufficient nutrition, and the EPA + DHA in fish oil can help meet their essential nutritional needs. For mature dogs and cats, the most recommended supplement is Omega-3-rich fish oil, which conveniently provides comprehensive care for joints, eyes, skin, and fur, making it a very convenient choice for holistic maintenance.

 3. Clean Labels and Natural Flavors

As pet owners become increasingly health-conscious, they seek better, more nutritious, and transparent options for their pets. A survey of 2,181 pet owners found that 43.6% place more importance on the health of pet food than their own. This broader shift towards health and wellness reflects the deep bond between pets and their owners, suggesting that claims like "all-natural," "plant-based," "organic," "non-GMO," and "clean labels" will be key considerations for consumers when purchasing pet healthcare products.

To satisfy picky pets, consumers are beginning to seek more natural flavors, such as natural chicken, pumpkin, and blueberry, which are currently popular flavor choices.

4. Subscription-Based Healthcare to Meet Diverse Needs

Consumers are increasingly inclined to choose products with health benefits, believing that they can actively make their pets happier and keep them away from illness. The simplest step is to provide pets with a diet that won't cause health problems in the future and offer a holistic diet tailored to their unique needs, health issues, and life stages, similar to what brands are doing now—providing not just food, but also nutritional solutions.

In the field of nutritional supplements, more customized services are beginning to emerge through big data operations, such as subscription-based health products and customized pet health products, which are areas that brand owners can focus on. 

In terms of sales channels, the in-store retail experience for pet owners is evolving, with traditional pet stores transforming into immersive spaces that offer more than just products. They are creating environments where pets and owners can explore, play, learn, and bond, such as the rise of pet cafés combined with restaurants. This transformation in pet retail spaces reflects a deeper understanding of pet owners' psychology: they want more than just pet products; they also seek services that offer emotional value.

III. Development Ideas for Pet Healthcare Brand Owners

The pet economy is an expression of emotional economics. People gain warmth and companionship from pets, and in return, they hope to provide more thoughtful and meticulous care. Therefore, in the face of an economic downturn, the pet economy is thriving against the odds, with rapid growth in products that symbolize consumer upgrades, such as functional health supplements and AI applications.

As a manufacturer with over 20 years of experience in health food development, we have observed that trends in the pet healthcare market closely mirror those in human health over the past five to seven years. This indicates that people's concern and investment in health are not limited to themselves but extend to their pets as well.

According to our internal statistics, the top three types of OEMs in the Taiwanese market are pet probiotics, pet skin and fur health, and pet joints. In addition to these three types continuing to be popular in 2024, our team predicts that pet brand innovations will focus on addressing obesity and delaying aging.

Currently, the competition among pet brands is intensifying. Although a few leading brands have emerged domestically, there is still room to stand out in the market. It's important to remember that the target audience of the brand is still people, not pets. Providing more convenient service models and addressing modern pet ownership pain points will be key topics that resonate with consumers. With the rise of pet e-commerce, brands should not only strengthen and optimize online channel management but also upgrade from multi-channel operations to omni-channel, gaining a comprehensive understanding of consumers and addressing their pain points.

If you're also considering tapping into the pet healthcare market and developing exclusive products, we invite you to contact our product consultants to plan your champion product!