- Climate-wise, about 20% of the meat and fish consumed annually goes to the food we feed our pets.
- In 2020, pet food sales worldwide reached over 102 billion USD, where the dog food market represented roughly 50% of this.
- Emerging new dog food segments include: plant-based, fermented and cultivated animal protein and insect-based options.
- Arising evidence indicates potential downsides from traditionally manufactured dog food being increased risk for food allergies and cancer.
- Lack of updated research in the dog food field and an old-school industry viewpoint have kept the industry closer from where it once started.
- Dogs are omnivores, which makes them compatible to also eat plant-based food.
- There is a positive change seen among consumers’ perception and demand for new health and climate favoring dog food options.
Huge Impact Potential and Booming Global Market
Approximately 885 million furry family members (cats and dogs), roughly half of those being dogs, are strolling around worldwide and longing for their next breakfast to be served. Therefore, it doesn’t come as a surprise that their paws also create a footprint. Climate-wise many find it bizarre to realize that as much as about 20% of the meat and fish (including: beef, chicken, lamb, salmon etc.) consumed annually goes to the food we feed our pets with. Translated into GHG emissions this is equivalent to 64 million tons of carbon dioxide emitted every year.
In 2020, total pet food sales worldwide reached over 102 billion USD, where the dog food market represented roughly 50% of this. Recent market drivers include the pandemic which accelerated pet ownership. Only in the UK pet-owning households increased by 23%, increasing the numbers of dogs to 12 million in total. The new pet owners were mainly represented by Generation Z and Millennials. Additionally, new significant markets are on the rise. One of those is China, a country where pet ownership up until recently has been low due to a history including a rabies outbreak in the 90s and a general different cultural relatedness to companion animals. Lately, the Chinese pet food market has experienced rapid growth as a consequence of its younger generations being more exposed to the cosmopolitan worldview, where four-legged friends is one of the apparent trends.
In terms of innovation activity, up until just recently, new pet food alternatives aiming to reduce the climate pawprint have been lagging behind the shifts seen in other heavily animal-protein related sectors. This window of opportunity, seen in the pet food industry, has managed to attract new founders in the space and explains the increased heat seen in the market lately. New startups are dedicated to shift consumer behavior towards re-evaluating WHAT pet owners feed their beloved friends with and the reason behind WHY they actually do so. To help people interested in the space, we thought it makes sense to share what we’ve found so far.
Based on the constitutional differences between cats and dogs, they have separate nutritional needs. Cats being obligate carnivores make them dependent on micronutrients found in meat. For clarity, we will continue to solely focus on the DOG food segment below.
WHAT the majority of dogs eat and commonly observed health implications
It is rather safe to say that most dogs you see in the streets are fed a meat based diet. The requirements on food safety are less emphasized in traditionally manufactured dog food compared to requirements for human consumption. Ingredients, including meat, are oftentimes sourced from cheaper by-products.
Research shows that of dogs diagnosed with any type of food allergy, the most frequently reported ones are proteins mainly from beef (34%)* and dairy (17%). Second to those proteins follows: chicken, wheat and lamb.
()*Percentage of reported reaction from dogs diagnosed with a food allergy.
Another concern is that as much as 25% of dogs are likely to develop cancer. Compared to humans, this means there is an almost 10x higher risk for dogs to develop cancer. Adding the fact that it’s scientifically concluded that especially processed meat increases the risk of cancer for humans, one could speculate that dogs consuming meat prepared in a similar manner might face long term negative outcomes as well. Yet, there is no pure evidence that cancer and traditionally manufactured dog food are related.
WHY the market looks like it does
So why are dog owners feeding their puppy-eyed friends food that in most of the cases is far from ideal? The short answer is that there has been a lack of updated research in the field along with what many are now considering as an old-school industry viewpoint, emphasizing that dogs are closely related to wolves and thus are dependent on meat. It all started with James Spratt — the first man to launch a complete dry dog food meal in 1860. Ever since the dog food industry has enabled butchers to sell unwanted by-products at a higher price point than what otherwise would have been possible.
What about dogs’ actual nutritional needs being OMNIVOROUS?
Key nutritional factors for dogs to stay healthy and have a happy gut:
(1) What shouldn’t come as a surprise is that dogs have clearly defined nutritional needs based on their age, breed, size and sex which always should be considered.
(2) As in contrast with many people’s belief, dogs are not by definition carnivores as their wolf ancestors are. In fact they have more copies of the gene that codes for the starch-digesting enzyme amylase which many times make them satisfied with having omnivorous diets.
The evolution in digestion of starch started to take form as wolves came closer to human campfires to snatch some of the dumps of food scraps. The main reason behind the general reluctance towards feeding dogs with vegetarian diets revolves around that even though it is possible, it is claimed by vet officials to be much easier to get the balance of nutrients wrong than to get it right. Therefore, there is a wide difference in feeding your dog a vegetarian diet from food developed by a company in correspondence with vet nutritionists than to prepare the food yourself at home.
(3) In terms of suitable dog food, it is important to not stare blind at the protein level in different foods but to make sure that the amino acids that are important for your dog’s health are included.
Market disruption is just around the corner
As more and more pet owners start to open up and even ask for new climate and health-promoting food alternatives, it appears clear that there is a positive change in perception and demand for new options. Apart from increased climate consciousness, what is partly driving this is raising consumer concerns around adverse outcomes from traditionally manufactured meat-based options. In addition, today’s e-commerce infrastructure has given a rise in sales direct to consumers’ doorsteps. Through smooth subscription offerings, many new retail consumer brands, including dog food startups, are saving their customers time by offering this service.
Startups are launching alternative dog foods
In terms of whether a plant-based diet really can be a healthy option for dogs, what’s broadly agreed upon is the climate benefits. Other than that, there have been concerns that the moral viewpoint of the owner should be separated with what food that’s actually best for the dog’s nutritional needs. So what are the outcomes from vegetarian dogs? Research claims that based on the prerequisite that the food is nutritionally complete and balanced, dogs are entirely compatible with having a plant-based diet. Even health benefits are observed and while some health problems are noticed these are also prevalent among dogs maintained on meat-based diets. Dogs suffering from animal protein allergies, going vegetarian can be a fruitful decision. In addition, the positive attitudes around plant-based diets in general are seen to increase among consumers.
Fermented and Cultivated Animal Protein
Whereas fermentation uses bacterial, yeast, and fungi systems as “cell factories” to produce the desired protein molecules, cultivated meat is produced directly from animal cells that grow whole cells in a bioreactor. In line with the alternatives above, fermented and cultivated animal protein can play an additional important part in reducing the climate pawprint as new studies show these technologies to have the potential of massive environmental benefits. Additionally, the animal welfare is indirectly improved since the animal itself is absent in the process. The commercial viability shows strengths in terms of an expected shorter time to market time, compared with production for human consumption, due to less rigid regulatory requirements as well as dogs being less picky in terms of the meat texture. The only evident barrier might be consumer perceptions sometimes leaning towards lab-grown meat being an “unnatural” source of protein.
Just the idea of insects turning low value food waste into high value protein combined with less land and water requirements indicates clear climate advantages, and a great source of protein. Even though the, so far, biggest market for insect protein is industrial animal feed, many consumers still find insects disgusting. However, there is an increased rate pointing at consumer acceptance of insect protein in pet food. While the mass market might need some more time to get familiar with the idea, judging by the richness in nutritional value, insect-based products are a great protein source for dogs.
The alternative dog food startup landscape
In the graphic below we have summarized startups that we have come across in different sub sectors (very broadly defined as plant-based, insect-based, fermented and cultivated animal-protein based dog food) to provide a snapshot of the state of the space with regards to different regions. Also, to limit the scope a bit we exclude:
- corporates, even though they’re working on products competing with some of these startups (e.g. Purina, Nestlé’s insect- and plant-based dog food),
- companies solely focused on dog treats and snacks,
- startups that use the industry’s traditional meat-based ingredients in their meals but differentiate themselves by offering subscription based DTC models, higher quality foods with ingredients sourced locally or in other ways increased palatability etc. To mention a few examples; Alvar, Hector Kitchen, Butternut Box, Scratch and Lyka.
Looking at the companies in the graphic above, it is evident that the plant and insect-based protein sources are far more crowded segments than fermented and cultivated animal proteins. A logical explanation for this is the technological complexity related to the development of the later mentioned one.
In the graphic below, we’ve looked at three alternative dog food segments in relation to each of the companies’ founding years. Even though the plant-based category was launched first to the market, significant traction hasn’t taken place until recently. An explanation is the lack of proven research in the field and consumer consciousness based on vet recommendations.
Dog food based on fermented and cultivated animal protein has been under development for some time. However, since the technology takes a certain time to get market-ready, we are just about to see more of those products launch.
Regarding the insect-based companies, they have existed on the market for a while. However, the general consumer reluctance against bugs has stayed strong in the western regions up until now. As the climate crisis has become more evident, this segment has seen a boost in activity and acceptance lately. The fact that Europe now has big scale insect producers is an additional driver.
Trellis Road’s take on the alternative dog food space
From an investment perspective we are convinced that the alternative dog food space has massive climate impact potential as well as a huge commercial upside. Based on the current momentum taking place in the industry with; new startups hitting the market, rising climate and nutritional awareness among consumers, increased scientific research activity and a booming new generation of dogs — the market timing is evident.
Price point wise, we also believe that in order to create the most possible impact, it is important to not stare blind on the high-end product segment but rather to find a price level that competes with many of the traditional dog food bestsellers without dropping in quality.
At the end of the day, the main deal-breaker for most dog owners, in the choice of dog food, will likely be centered around what is best for their dogs’ health and nutritional balance. Even though the plant-based segment is experiencing rapid growth, we still believe that some consumer groups will prefer an animal-based protein source as feed for their dogs where our earlier investment in Bond Pet Foods will be one of the more climate friendly options.
In conclusion, the market players who manage to increase the nutritional value and health benefits as well as producing food that harmonizes with the planetary boundaries while also staying competitive will be best equipped for a fantastic journey ahead.
We’re continuing our work in the space, expect more updates in the dog food segment soon …and don’t hesitate to let us know if you know of more startups or initiatives in alternative dog food.
- Amí (Italy, 2002)
- Benevo (UK, 2005)
- Bramble (US, 2017)
- freshwoof (India, 2019)
- hownd (UK, 2013)
- Omni (UK, 2020)
- Petaluma (US, 2019)
- The Pack (UK, 2020)
- v-dog (US, 2018)
- VegDog (Germany, 2015)
- Wild Earth (US, 2017)