Buyout Shows Americans' Appetite for Pricey Pet Food

Mars is acquiring the pet food brands of P&G for $2.9 billion.

ByABC News
April 9, 2014, 10:21 AM
Mars is spending $2.9 billion to beef up its line of premium pet foods. Does Fido care?
Mars is spending $2.9 billion to beef up its line of premium pet foods. Does Fido care?
GK Hart/Vikki Hart/Getty Images

April 10, 2014 — -- Candy-maker Mars this week showed it has a sweet tooth for dog food: It will spend $2.9 billion to acquire three upscale pet food brands from Proctor & Gamble -- Iams, Eukanuba and Natura.

The move illustrates two trends: Americans are spending more on pet food, and they are willing to pay a premium for the kind of food they, themselves, would like to eat.

P&G selling pet food brands to Mars for $2.9B

Kobe beef dog food? It's out there, available on Amazon, at $41.54 for 12 cans.

"Kobe Master" is made by small, independent, boutique pet food producer WeRuVa (slogan: "people food for pets").

Its blurb for Kobe Master says, "Spoil your dog with the highest quality beef in the world. Kobe Beef is a legendary Japanese delicacy."

The dog food is rich in Omega 3 and Omega 6 fatty acids, says WeRuVa. It is safe and natural, owing to the fact that Kobe beef is raised on an all-organic diet in a hormone- and antibiotic-free environment.

Food truck for dogs

Nutro, a brand Mars already owns, offers the discerning canine diner a lamb-and-rice kibble made with genuine New Zealand lamb.

"It's one of our top sellers," says Nutro spokesperson Monica Glass. It's also gluten-free. Price: $15.99 for a 5lb bag.

Iams, which Mars is buying, makes dog food imbued with Vitamin E, Glucosamine, L-Carnitine and Prebiotics.

New York City market research company Packaged Facts says total pet food sales are projected to reach $21 billion in 2013, and $24.7 billion by 2017. Sales of premium pet food (anything priced 10 percent above pet food overall) was 42 percent of total sales in 2012. Its share is expanding, says Packaged Facts, because of robust growth in the "super-premium" category.

Dogs in particular are getting pampered the most. Premium dog food including pricey organic offerings and never-frozen meals has grown by nearly 170 percent over the past 15 years, according to Euromonitor, topping the market for medium- and low-priced varieties combined. Back in 1999, the most expensive dog chow accounted for 36 percent of the market, and now it’s 57 percent, or more than $6.5 billion a year.

What are consumers (and their pets) getting for all that money?

When you are standing in the pet food aisle, debating whether to buy Cirque de la Mer dog food with whole, wild-caught tuna (a real brand) or the cheapest brand ("Old Cur," which we just made up), what facts ought you keep in mind?

For starters, say experts, you should know that whatever you are buying is almost certainly better for your dog than what you could cook for him or her at home.

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That's because, says Marion Nestle, Paulette Goddard professor of nutrition, food studies and public health at New York University, commercial pet food (unlike commercial food made for humans) is by industry custom complete and nutritious.

"It all has to meet the same standard," she says.

A dog who eats commercial dog food doesn't need to eat anything else. If the can says "complete and balanced," says Nestle, what's inside is.

Second, if you spend more, your dog will not necessarily be happier or better nourished.

While there is plenty of anecdotal evidence, says Nestle, suggesting that better quality, more costly ingredients provide superior nutrition, there are no scientific studies proving so.

"Ninety percent of pets live on the cheapest pet food and survive," says Nestle, co-author of "Feed Your Pet Right: The Authoritative Guide to Feeding Your Dog and Cat."