Since the beginning of the pandemic, there have been distribution and supply problems. Economies, businesses, and customers have all been suffering for almost two years.
The problems are expected to be present in 2022 too and may lead to big changes in the pet food industry.
Most manufacturers have had problems with distribution, and couldn’t provide their customers with enough pet food. Generally, the fill rates went down by 10–20%.
The top players started to recover in the Q3 of 2021, but the smaller producers are still suffering.
Many costs have also risen, and are impacting the pet industry.
- Labor shortages led to higher labor costs. The US labor costs are now 3.4% more per hour.
- Shipping went up from 375% to 434% and is still growing.
- Chicken prices increased by 87% from August 2020 to August 2021. Since chicken is the main ingredient in a lot of quality canned food, dry food, and treats, it’s sure to affect the market.
The higher costs of distribution and production mean higher prices for the end customers. During the Q3 of 2021, some producers already increased their prices, while some are planning to do so by the end of 2021.
Products are expected to cost between 5–10% more. But, around 22% of companies are going to increase the prices by more than 10%.
Since yearly costs for pet food are between $228 and $259, with these increases, they can easily grow up to $300.
The pet food industry has been on the rise for almost two years, but these problems might stop the high growth rate.