Why pet food is a key opportunity for feed innovation

The sheer volume of animal feed produced annually, roughly 1.44 billion metric tons in 2025, has important implications for food systems' sustainability and resilience, underscoring the urgent need for feed innovation. Livestock and aquaculture account for over 90% of global compound feed production and rely heavily on high-volume, low-cost commodity ingredients, placing strong demands on ingredient production scale and price. In contrast, pet food accounts for just under 3% of global compound feed production, nearly 40 million metric tons annually, but operates in an increasingly premium market. More than half of pet owners in the United States, along with a substantial share of consumers in other major pet food markets, report buying premium pet food.  While cost and availability remain important, pet food’s growing premium market creates greater scope for new ingredients that can differentiate products and respond to evolving consumer priorities.

In recent years, changing consumer preferences in pet food have introduced new sustainability and supply challenges. Pet owners increasingly favor meat-rich products in their pet’s food, a trend that can substantially increase the environmental impacts of pet food because meat products are typically among the most environmentally intensive ingredients used in formulations. At the same time, conventional supply chains face growing pressure from climate change, disease, and geopolitical events. Competition for animal byproducts, historically a cornerstone of pet food formulations, is also increasing as demand from other sectors like aquaculture and biofuels grows. 

These characteristics make pet food a key opportunity for feed innovation. Ingredient innovation can give manufacturers new options to reduce environmental impacts and diversify sourcing. At the same time, the sector’s premium market may offer opportunities to incorporate emerging ingredients into higher-value products as they develop and scale.

Pet food demand is growing

There are more than one billion pets worldwide. The United States (US), European Union (EU), and China alone are home to over half a billion dogs and cats, supported by large populations, high household incomes, and the growing role of pets as companion animals. Pet ownership is rising globally, driven by demographic changes and rising incomes, especially in emerging markets with a growing middle class. This growth is increasing demand for pet care resources, including pet food, veterinary services, and enrichment products.

Global pet food production volumes are increasing in response to rising pet ownership. Since 2022, annual pet food production has increased by 13%, reaching 39.28 million MT in 2025 (Figure 1). If recent regional production trends continue, CFI projects global pet food production could exceed 45 million MT by 2030 (Figure 1). As pet food volumes grow, feed innovation will become increasingly important to meet rising ingredient demand, manage environmental impacts, and strengthen supply resilience.

Figure 1: Global pet food production volume by region 2022-2025, with forecasts through 2030. Volumes are reported in million metric tons (MMT). Light bars indicate forecasts made by CFI assuming linear growth in pet food tonnage by region based on 2022-2025 trends from Alltech. Segments below 1 MMT are plotted but not labeled. The number above each bar is the annual global production volume. 

Premiumization is reshaping pet food composition

The pet food market is growing in value, with the global market expected to reach USD 146 billion by 2030. Demand for premium pet food is driven by the humanization trend, with consumers treating their pets as family members and placing greater emphasis on the quality of products fed to their pets. Indeed, product quality and nutritional value are reported as two of the most important priorities when choosing pet food, even above price. For many owners, these priorities tie into a broader focus on supporting their pets’ health and longevity. This creates opportunities for pet food producers to commercialize differentiated products at premium price points, including products that incorporate alternative ingredients offering functional, nutritional, or sustainability benefits.

Consumers are also seeking out ingredients perceived as higher quality. Pet owners in major pet food markets increasingly seek recognizable, minimally processed ingredients that resemble human diets, contributing to demand for fresh and human-grade pet foods, products that avoid animal byproducts, and formulations that emphasize meat. In the US, sales of pet food products claiming to contain human-grade ingredients grew 48% between 2020 and 2022, while sales of pet foods claiming to be free from animal byproducts increased by 24% and those listing meat as the first ingredient increased by 19%. 

These shifts have important sustainability implications. Greater reliance on meat may reduce one of pet food's historical sustainability advantages: its ability to make use of animal byproducts with relatively limited demand for human consumption. At the same time, consumers’ willingness to pay for perceived quality and additional benefits may create commercial opportunities for emerging ingredients that would struggle to compete in more price-sensitive feed markets.

Pet food sustainability depends heavily on ingredient composition

Globally, dry dog and cat food alone accounts for an estimated 1.1-2.9% of agricultural greenhouse gas (GHG) emissions, 0.8-1.2% of agricultural land use, and 0.2-0.4% of agricultural freshwater use. While these shares represent a relatively modest fraction of agriculture’s total environmental impacts, they also reflect a non-trivial and growing demand for natural resources. 

Ingredients are a key driver of pet food’s environmental footprint, accounting for an estimated 42-80% of the overall environmental impacts of wet and dry pet food. Meats contribute disproportionately to impacts like greenhouse gas emissions, land, and freshwater use despite accounting for a smaller or similar share of formulations compared to plant-derived ingredients and animal byproducts. For example, for dry dog food in the UK, meat makes up 2% of dry mass, but 16% of emissions, and similar trends exist for wet dog food (Figure 2). This matters because pets can derive a relatively high proportion of their dietary energy from animal-derived ingredients. 

Figure 2: Average ingredient composition and associated emissions composition for wet and dry dog food in the United Kingdom. Average ingredient composition is reported as a % dry mass, while emissions composition is reported as % kg CO₂eq per 1,000 kcal. Emissions were calculated using an economic allocation. Percentages are rounded to the nearest whole number. Source: Harvey et al., 2026. 

Ingredient choices therefore represent an important sustainability lever. Scope 3 emissions can account for more than 90% of pet food manufacturers’ value chain greenhouse gas emissions, and sustainability can also influence consumer purchasing decisions alongside quality, composition, and price. Expanding the range of ingredients available for use in pet food formulations can give manufacturers more options to reduce environmental impacts while meeting nutritional and commercial requirements.

Conventional pet food ingredients face increasing supply challenges

Several conventional pet food ingredients also face supply risks from trade disruptions, disease, geopolitical instability, and climate change. For example, recent fishmeal and fish oil shortages due to El Niño have limited the global availability of omega-3-rich ingredients, including those used for pet food. In the US, drought conditions have contributed to declining cattle numbers, limiting the availability of beef-derived ingredients. 

These shortages of conventional pet food ingredients, alongside transportation bottlenecks, geopolitical events, and labor constraints, have increased supply volatility and contributed to higher pet food production costs. In the US, producer prices for dog and cat food increased by over 27% between 2021 and 2023. While some of these constraints have relaxed since the COVID-19 pandemic, producer prices have remained elevated (Figure 3). 

Figure 3: United States producer price index for dog and cat food manufacturing, 1985-2026. The producer price index tracks changes over time in the prices US dog and cat food manufacturers receive for their products (1985 = 100), reflecting trends in producer-level prices before retail markups.

Competition for conventional ingredients is also increasing. Historically, animal byproducts have been a staple in pet food formulations for nearly a century due to their nutritional value, abundant supply, and competitive pricing. Now, pet food manufacturers face increasing competition for these ingredients from other sectors, such as aquaculture and biofuels. In the US, use of rendered animal protein meals and fats in pet food declined by 12% between 2019 and 2024, while their market value increased by 60%. Tightening supply and rising competition for conventional ingredients are incentivizing pet food manufacturers to identify economically viable alternative ingredients.

CFI’s upcoming work on alternative ingredients in pet food

The intersection of sustainability challenges, a high-value market, and growing supply pressures on conventional ingredients creates a strong case for feed innovation in pet food. Against this backdrop, CFI is releasing Alternative Ingredients in Pet Food: A Guide to Emerging Proteins and Oils in Dog and Cat Food this October. Written by CFI in collaboration with the Pet Sustainability Coalition, the report offers one of the industry’s first comprehensive assessments of the alternative ingredient landscape for pet food. We assess nine ingredients that could play a larger role as protein or oil sources in dog and cat food.

Topics covered in the report include: 

• Supply and production maturity of alternative ingredients

• Current adoption of alternative ingredients in the US pet food market

• Environmental impacts of alternative ingredients compared with conventional ingredients

• Nutrition and health outcomes for dogs and cats fed alternative ingredients

• Consumer acceptance of alternative ingredients in pet food

• Recommendations for pet food manufacturers interested in alternative ingredients

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