More Than Half of Pet Care Expenses Are Food Costs
Food Industry Actively Enters Growing Market
Daesang and Pulmuone Compete with Functional Products
As the recognition of pets as family members, known as ‘Pet Humanization,’ becomes established as a culture, the pet food market is evolving with a focus on functionality. With the market’s growth potential gaining attention, domestic food companies with food development technology and know-how are actively entering the market.
According to the ‘2023 Korea Pet Report’ by KB Financial Group’s Management Research Institute on the 7th, the number of households raising pets such as dogs and cats reached 5.52 million by the end of 2022, accounting for 25.7% of all households. This is an increase of 2.8 percentage points compared to 5.36 million households in 2020. As the number of pet-owning households grows, the related market size is also expanding. According to the Ministry of Agriculture, Food and Rural Affairs, the domestic pet industry market is expected to grow from about 8 trillion KRW in 2022 at an average annual growth rate of 14.5%, reaching 15 trillion KRW by 2027.
Among the steadily increasing pet-owning households, the item with the highest expenditure is pet food. According to a recent survey conducted by the Korea Rural Economic Institute targeting 600 pet owners nationwide, the average monthly expenditure of pet-owning households was 168,850 KRW. Among these, the largest portion was ‘food and snacks,’ accounting for 53.4% of total expenditure, with an average monthly spending of 80,331 KRW.
The domestic pet food market is dominated by the global pet food brand ‘Royal Canin,’ headquartered in France. Royal Canin Korea’s performance soared during the COVID-19 pandemic period along with the increase in pet-owning households. Sales, which were 115.4 billion KRW in 2019, nearly tripled to 307.3 billion KRW in 2022, and operating profit also increased by more than 240% over three years, from 11.7 billion KRW to 40 billion KRW during the same period.
Among domestic food companies, Harim’s Harit Pet Food, established in 2017 with the human-grade pet food brand ‘The Real,’ has shown remarkable growth. Harim Pet Food started with sales of 200 million KRW in its first year, grew to 2.2 billion KRW the following year, and surpassed 10 billion KRW in 2019. The growth momentum continued, with sales increasing to 36.6 billion KRW in 2022. In 2021, the company turned profitable for the first time in five years since its launch.
As the pet food market matures, pet food is evolving beyond simple feed into functional foods. While pet food in the past focused on convenience for pet owners, the recent establishment of the pet humanization culture, which treats pets like family members, has led to a shift in consumer behavior prioritizing pet nutrition and safety, increasing demand for premium products.
A representative company actively embracing this trend is Daesang. In February last year, Daesang Group established Daesang Pet Life and incorporated it as a subsidiary of Daesang Holdings. In July, it launched a new brand, ‘Dr. Nuto,’ entering the pet food market. Daesang Pet Life explained that they entered the market considering the future increase in demand for functional pet foods due to longer life expectancy of pets through vaccinations and early treatment.
A Daesang Pet Life official said, “Daesang Group aims to lead the pet food market by utilizing its existing food development technology and know-how accumulated through health and functional food businesses.” They added, “This year, we plan to expand expertise by strengthening nutritional supplements and staple product lines for elderly pets and sequentially introduce various product lines including supplements, wet food, wet cans, dental chews, and natural raw food.” In fact, Daesang Pet Life recently began full-scale distribution by expanding its co-developed pet dog liquid food ‘Nutricare’ with Daesang Well Life to stores such as E-Mart.
Pulmuone is also strengthening its competitiveness by continuously launching functional new products under its pet food specialized brand ‘Pulmuone Amio.’ The new products, developed with the participation of an internal veterinary specialist, focus on pet health with specialized products for gut health, weight control, urinary tract health management, and stress relief. Each product contains ingredients such as psyllium husk and probiotics for gut health, and conjugated linoleic acid effective for reducing body fat.
Having entered the market in 2013 with ‘Amio,’ Pulmuone incorporated Pulmuone Amio into Pulmuone Foods last year to reorganize its pet food business and establish brand structure and direction. Pulmuone Amio has adopted the new slogan ‘Proper Food for Pets’ and plans to expand related businesses based on Pulmuone Foods’ expertise and know-how in product planning and management. A Pulmuone Foods official said, “Pulmuone Amio will actively utilize Pulmuone’s representative healthy ingredients to offer various pet foods that satisfy both pets and their owners.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
