Pet Supplements Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in Pet Supplements Industry

ESG (environmental, social, and governance) issues are increasingly playing a role in companies' merger, acquisition, and divestiture decisions. Known also as climate risk, environmental, social, and governance is a concept that goes beyond financial reporting but provides valuable insight into a company's internal control over financial reporting.

The sustainability of pet supplements plays an integral role in the market, even as consumers, including pet owners, are increasingly concerned about sustainability, and interested in it. About 30% of U.S. pet owners are concerned about sustainable, recyclable packaging, according to Packaged Facts. Pet owners also care about pet food sustainability, which is often related to protein sources.

Companies are responding to this small but growing interest in pet food. In September 2018, grass-fed pet food products (as in the animals that supplied the protein in the foods were only fed grass) accounted for just 0.04 percent of pet food sales in the United States. According to Nielsen, a data and market measurement company, pet food sales have increased 156% in 2019.

A major concern of sustainability in pet food is labor practices, including forced labor and mistreatment of workers, especially in Asia. USDA has received documentation that over 57 common pet food ingredients were sourced through supply chains that used child labor, while over 16 were sourced through modern forms of slavery.

ESG Trends

As the pet food industry continues to impact the environment in ESG, producers need to use sustainable ingredients to limit negative impacts on the environment. Pet food can become more environmentally friendly both in the short-term and in the long-term when it uses sustainable ingredients.

A pet food manufacturer can reduce the impact on ESG by sourcing ingredients from supply chains without exploitative labor practices like child labor, poor working conditions, and unfair wages. Furthermore, there are several alternative ingredients that food manufacturers can use to provide nutrients including protein. These options include fish, insects, and cuts from animals that humans do not typically consume, such as organ meats. It is recommended that manufacturers use more plant protein in their products since the environmental impact of producing plant protein is much lower than that of producing animal protein. Pets should be offered vegetables that are safe for them to eat.

It was announced in April 2021 that a leading pet food company targets to make 50 percent of its product line sustainable by 2025. The company is committed to responsible manufacturing, sustainably sourced materials, sustainably sourced ingredients, sustainable packaging, as well as an increased focus on animal welfare.

Although the pet food industry relies heavily on by-products and is tightly intertwined with livestock production and human food production, it has a distinctive sustainability profile. Most commercial pet foods are formulated to contain nutrients that exceed current minimum recommendations, contain ingredients that compete directly with the human food supply, or are overconsumed by pets, resulting in overconsumption and food waste. To address these challenges and influence pet ownership sustainability, pet food professionals need to design products, manufacture processes, educate the public, and change policies. It may be possible to achieve a more sustainable pet food system by coordinating efforts across the industry including ingredient buyers, formulators, and nutritionists.

Growth of The Pet Supplements Market

In 2021, the global pet supplements market was worth USD 1.9 billion and is expected to grow at a compound annual growth rate (CAGR) of 5.9% between 2022 and 2030. Consumers spend a significant amount of money on pet food, supplements, toys, accessories, and other related products to keep their pets active, healthy, and happy thanks to the rise in pet humanization. A recent report from the American Pet Products Association (APPA) estimated that American pet owners will spend USD 109.6 billion on dogs, cats, and birds in 2021. These market trends are driving the demand for pet products in the future. The growing population will likely lead to an increase in demand for pet food in the coming decades. Manufacturers are adapting sustainable practices to make sure that this increase does not negatively impact the environment.

Key Companies in this theme

    • Nestlé Purina Petcare

    • Virbac

    • Bayer AG

    • NOW Foods

    • Food Science Corporation

Scope of the Pet Supplement Industry ESG thematic report: 

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Pet Supplement Industry ESG thematic Report: 

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the market globally

    • Key insights into Infrastructure developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the industry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment