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It may have started with a bone tossed to a wolf pup outside a cave.
“In Australia, pet food is now a $4.6 billion category – putting it ahead of national household spending on seafood, cheese or lamb.”
Humans have been feeding animals for thousands of years, but commercial pet food is a surprisingly modern invention. Over the past two decades pet food has evolved from a bulk commodity into a sophisticated consumer product – now competing with human food for shelf space, packaging design and brand loyalty.
In Australia, pet food is now a $4.6 billion category – putting it ahead of national household spending on seafood, cheese or lamb. When including veterinary services, insurance, grooming, accessories and supplements, total annual household pet spending exceeds $10 billion. This is higher than total household expenditure on public transport.
Globally, the pet food market alone is estimated by some to be worth around $200–215 billion and continues to grow.
The wider global pet care economy – including vet services and accessories – is estimated to be valued at over $385 billion. Growth is fuelled by rising incomes, smaller households and evolving attitudes to animals. Across many cultures, pets are now seen not just as companions – but as full-blown family members who have birthdays, social media profiles and personalised diets.
New business models are emerging. Subscription services now deliver raw or gently cooked meals, often with human-style names – think ‘Beef Hotpot for Benny’ or ‘Chicken Casserole à la Coco’.
Recyclable packaging, breed-specific formulations and food labelled ‘human-grade’ are now part of everyday offerings. Brands are designing lines for single-person households, retirees and inner-city renters with handbag-sized dogs.
Pet food has gone from commodity to strategic category. Large food companies are developing specialised pet brands. Supermarkets and specialist retailers are dedicating more space to premium formats. Online businesses are building direct-to-consumer loyalty. Investors of all types – from supermarkets to private equity to family offices – are treating pet care as a defensive growth sector with emotional stickiness.
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From pandemic to pet priority
COVID-19 didn’t create the pet economy – but it gave it a serious boost. Lockdowns drove a surge in pet adoptions across Australia and globally. Pet ownership in Australia jumped from 61 percent of households in 2019 to 69 percent by 2022. In the United States, it grew from 56 percent in 2010 to 70 percent by 2022. In China, pet ownership in major cities quadrupled between 2010 and 2020, driven by rising incomes, smaller households and a growing sense that pets are a lifestyle statement.
Spending followed. In the United States, pet owners spent $216.3 billion in 2023 – including $87.4 billion on food. In Australia, spending rose from $12.2 billion in 2019 to $14.5 billion in 2023. In Singapore, Seoul and Hong Kong, smaller pets and premium tastes have converged. In Shanghai or Shenzhen, owning a miniature poodle in a Burberry vest isn’t just cute – it’s a signal of upward mobility.
Some owners in China are known to spend more on imported pet food than on their own meals. While some consumers have shifted to mid-range products or supermarket brands, overall spending remains strong.
Pet food often remains one of the last items people are willing to cut – particularly for older animals or those with dietary needs.
Retailers have responded. Woolworths, Coles and Chemist Warehouse have expanded shelf space and online offerings. Bunnings has also entered the category, rolling out pet food and supplies nationally – aiming to capture cross-over spend from its DIY and outdoor shopper base. Specialist chains like Petbarn, PETstock and PetO offer food, vet care, grooming and insurance – building ‘whole of life’ offerings around the household pet.
More than a dog’s dinner
Dog and cat food account for around 95 percent of Australia’s pet food market – but the ecosystem stretches much further. Across the country, many households care for birds, rabbits, guinea pigs, turtles, reptiles and aquarium fish. That demand supports everything from seed mixes and frozen krill blocks to freeze-dried mealworms and nutrient gels for exotic reptiles.
There are more pet fish in Australia than dogs (one 2022 survey estimated that there were 6.4 million pet dogs vs 11.3 million pet fish - albeit that four times as many households owned dogs). Many apartment dwellers and renters are also choosing birds or rabbits as low-space companions. Some premium stores now offer tailored lines for parrots, axolotls or bearded dragons – a big shift from the days when a generic seed mix was expected to feed everything from a budgie to a rabbit.
Global growth, local behaviour
Pet food trends vary by region.
In the US, the market is booming with formats like freeze-dried raw food and DNA-personalised meal plans. In Germany and Northern Europe, sustainability dominates – including recyclable packaging, carbon-conscious sourcing and interest in insect-based proteins.
Each market offers different lessons – and different export opportunities. Australia’s reputation for clean supply, traceability and novel proteins gives it a strong export foundation.
What’s in the bowl
Pet food ingredients are a snapshot of Australian agriculture. Rendered beef, lamb and poultry along with cereals such as sorghum and oats, form the base of most kibble – the dry, biscuit-style food that fills supermarket shelves.
Sorghum is a standout. Increasingly used in Chinese pet food, it offers a non-GMO, hypoallergenic and digestible grain base. Its rise in value-added markets reflects how agricultural exports are shifting from bulk feedlots to boutique pet bowls.
Meat processors are also becoming more sophisticated in how they capture value. Chicken companies are using by-products such as feathers – which, when hydrolysed, become a high-protein ingredient for some specialty feeds.
Beef processors are investing in rendering plants that maximise returns from the whole animal, transforming what were once waste streams into high-margin inputs for the pet food sector.
Innovation is expanding rapidly. Australian brands are adding insect protein (BuggyBix), algae, flaxseed, chickpeas and even kangaroo to premium blends. Subscription players like Lyka deliver cooked-to-order meals packed based on the pet’s profile. These services invest in refrigerated warehousing, biodegradable packaging and systems that customise orders meal by meal.
Export edge
Australia exported around A$230 million in pet food in 2023–24. Leading products include kangaroo, goat, lamb and wild-caught fish – often marketed as hypoallergenic or exotic.
What sells isn’t just what’s in the packet – but the story on the label. Australian pet food is associated with safety, sustainability and transparency. Regulators demand it, but consumers expect it.
Importers in Asia, the Gulf and Europe are asking more questions about emissions, animal welfare and additive use – and rewarding those who can deliver certified answers.
Investment appetite
Pet care is now on the radar for capital investors.
Quadrant Private Equity’s acquisition of The Real Pet Food Company – home to Nature’s Gift and Ivory Coat – was driven by its brand strength, premium position and export upside. Quadrant later sold the business to a consortium including Singapore’s Temasek and China’s New Hope Group – underscoring the global appetite for premium pet food platforms.
Retail-vet chains are also in play. Greencross is backed by TPG Capital. PETstock is now majority-owned by Woolworths. These businesses blend multiple revenue streams – food, vet care, insurance and grooming – in a bundled relationship model that creates loyalty and lifetime value.
Globally, brands like Mars, Nestlé and General Mills are doubling down on pet food, with Mars expanding into veterinary diagnostics with its purchase of Heska in 2023. In China, companies like Xiaopei are integrating feeders, wearables and mobile apps to monitor sleep, appetite and exercise.
Growth with complexity
The sector’s momentum comes with growing challenges. Sustainability demands are rising – from packaging and sourcing to emissions data.
Fresh and frozen products require better cold chains and risk management. If temperature control fails, so does the brand.
At the same time, entry costs remain high. Shelf space in supermarkets like Coles and Woolworths is heavily contested. New entrants face steep competition for premium placement and need to invest in marketing, logistics and distribution partnerships to reach consumers at scale.
Channel competition – the battle between different types of retailers and platforms to reach the same customer – is intensifying across pet care.
Supermarkets are moving upmarket with premium private-label pet foods. Online platforms are building direct-to-consumer ecosystems with autodelivery, custom diets and slick user experiences.
Specialist chains such as Petbarn and PETstock are integrating food, vet care, grooming and insurance under one roof to create stickier relationships.
Regulation is evolving too. Australia is reviewing its voluntary standards for pet food safety and labelling.
Export markets such as China and the European Union are increasing compliance requirements around traceability and product integrity.
Consumers are changing quickly. Many younger households expect food to reflect their values – from sustainability and nutrition to ethical sourcing.
Some want vegetarian options for their dogs.
Others are asking for personalised gut-health formulas for their cats.
The tail end
It used to be a side aisle in the supermarket – or a way to get rid of trimmings. Today, pet food is where brand strategies are built, margins grow, and consumers make emotional decisions.
Behind every 1kg bag of dry food is a supply chain linking Australian meat processors to Asian e-commerce sites and eco-labelling platforms.
Pet food is no longer about leftovers – it’s about lifestyles.
It’s where agriculture meets wellness. Where dog snacks come with dietary guidance. Where the supermarket shelf is just one touchpoint in a 15-year customer relationship.
For investors, retailers and agribusinesses, this is a bowl with bite – and it’s not slowing down.
Michael Whitehead is Executive Director, Food, Beverage and Agribusiness at ANZ
This originally appeared as a part of the Spring 2025 edition of ANZ’s Food for Thought report.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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