Unlimited Potential in Limited Ingredients

Pet owners’ demand for transparency is taking limited ingredient diets to a new level.



According to the American Animal Hospital Association (AAHA), allergies are among the top reasons for canine and feline veterinarian visits. Just like humans, dogs and cats can develop allergies to certain foods. An elimination diet is one of the common ways pet owners can identify and treat food sensitivities in their pets—and, with luck, spare themselves a costly visit to the vet. Limited ingredient diets fulfill this need well by including only one protein and one starch, and they have become quite popular in the pet specialty marketplace over the past three years.

According to GfK’s nationwide point-of-sale (POS) panel, limited ingredient diets (LIDs) account for a remarkable 8.5 percent of pet food sales at U.S. pet retail, totaling $674 million in sales annually, and the category is growing consistently at about 13 percent year over year. Over the past three years, the number of brands offering LID products has more than doubled—from 15 in 2013 to 37 in 2015. Additionally, LID SKUs nearly tripled in the same timeframe, jumping from 283 to 647 items in the marketplace. 

Dogs clearly dominate the LID market, with a 93.8 percent share. Of the 15 best-selling dry dog foods (based on annual sales through March 2016), four are limited ingredient diets. And, while LID products are relatively scarce within the feline world, limited ingredient diets for cats have experienced a correspondingly high growth over the past years. Wet LIDs for cats, especially, have seen an uptick in sales—23.3 percent over the past 12 months.

Yet, our analysis shows that retailers may not be giving LID items their due. Although LID products account for 8.5 percent of pet food sales, they are getting only about six percent of the shelf space in pet specialty retail shops. And while LID sales are rising at close to 14 percent every year, their shelf allotment growth lags behind at only 10 percent YOY. This looks like a clear opportunity for pet retailers.

True Transparency
There is also a new limited-ingredient trend unfolding—one that has less to do with identifying and treating food sensitivities in pets and more with the pervasive move towards natural pet foods. In this context, consumers are offered a natural product that proudly displays a simple recipe that limits the ingredient panel to only three or four ingredients. At a time of recalls and concerns about worrisome ingredients in bargain-priced pet products, owners are drawn to the simplicity and comfort of knowing exactly what is in their pets’ meals. A similar trend is seen for human foods, where products (like energy bars) list their limited ingredients prominently on the front of the packaging—they are right there in front of the shopper, with no hidden surprises. 

While both trends truly serve two different market needs (allergy diagnostics versus ingredient transparency), they can coexist and help each other grow. Retailers that have not already tapped into the burgeoning appeal of LID items should be sure to make them an option customers can embrace. They should be treated not just as diagnostic products, but also as a complement to the natural category. And they should be given the right amount of shelf space to match their contribution to the store’s bottom line.

In other words, do not limit your thinking and planning when it comes to LID products; they are ready to show their strength and exceed all expectations. 

Maria Lange is Business Group Director for GfK’s POS Tracking (Pet) team. 

All of the data in this story comes from GfK’s point-of-sale (POS) panel representing over 11,000 US pet retailers. Participating stores get free reports on the marketplace, and clients can use the data to learn about their brands and competitors. Find out more by writing to Maria at maria.lange@gfk.com.


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