lenges in their business environment, but they’re still really chasing product attributes that help their brand more so than their bottom line.” Conversely, improving product margins, frequently seen as a key innovation driver, fell relatively low among the priorities, along with managing inflation. “We did this survey in November and December of last year, though, so it’s possible that inflation pressures may have pushed up a little bit more since then,” Moses clarifies.
Sustainability Circling back to the No. 1 product innovation driver, Moses notes that it was a big surprise just how aggressively manufacturers are pursuing sustainability. “Over 90% have net zero/carbon neutrality plans. About 85% of those want to reach that in 10 years, and over half want to reach it in five,” he says. “This was really notable to us that the sustainability targets were so aggressive.” The sustainability targets are reflected even in the formulation of the pet food. When asked if they were planning to change their protein source, there seemed to be a fair bit of flux in the formulas, Moses says. “The ingredient that looks to be most targeted by producers to replace is animal muscle; 71% of the people that are using animal muscle plan to change that,” he points out. “We think that’s partly a reflection of the cost environment that we’re in, but we also think it’s a reflection of the sustainability targets.” Animal muscle is not only the most carbonintensive ingredient in most pet food formulations, but there’s also competition for it in the human food space. “So we see that being swapped out for, potentially, animal visceral, which might be a play on upcycling and a little less carbon-intensive, even moving down towards plant-based protein.”
Convenience and selection The pet food industry also has no plans to sacrifice convenience or selection despite the challenging business environment. “We asked, ‘Do you plan to rationalize any SKUs?’ just thinking that’s a way you can boost your capacity—fewer changeovers and cleaning, and better margins, too. That was something we saw during the pandemic; the variety that was being offered was reduced, at least in the human food space,” Moses comments. “Again, we had a vast majority come back and say no, they don’t plan to do that.” That’s driven in part by the humanization trend, CRB hypothesizes, in which people want to offer their pets a variety of flavors. Of those surveyed, 86% plan to make changes to their packaging, with moves toward resealable
retort pouches and stand-up zipper pouches leading the way. That might be driven in part by food safety, Moses says, but much of it is likely driven by convenience. “We saw a push away from cans and more towards multi-use products that are convenient for the consumer to use,” he says. “The top five options are really about convenience and premiumization rather than margin and throughput.”
Food safety “One of my favorite sections from the report is food safety,” Moses says. “It’s a very positive look on the industry.” In fact, food safety has come a long way over the past 15 years in response to an evolving regulatory climate—namely, the Food Safety Modernization Act (FSMA). What the survey found was that food safety was not only a top driver of packaging changes, the ability to meet a food safety plan was the top driver of capital projects as well. Manufacturers are taking several actions to ensure they meet their food safety plans. Almost half of all respondents indicated that their facilities rely on operational procedures (e.g., protocols to prevent the cross-contamination of raw and cooked food) and facility segregation to ensure safety and quality. Personnel hygiene routines related to Good Manufacturing Practices (GMP) rank high as well. Half of the largest companies have dedicated personnel for different production areas, and about one-third of smaller and midsize companies use this method. “What the industry is doing tends to be pretty expensive things. They’re adopting a lot of bestin-class practices and spending the money to do it,” Moses says. “Again, that shows how serious the industry is about food safety.” Overall, the pet food industry is advancing quickly, Moses notes, pointing to the use of artificial intelligence to improve operational efficiency and also to how integrated facilities are becoming. By strategically investing in automated technologies, pet food manufacturers will be able to improve existing facilities and optimize future expansions, CRB’s report notes. This will help to address some of today’s most pressing business challenges, including labor availability and inflation. CRB www.crbgroup.com
Download the full free Horizons: Pet Food Report.
www.profoodworld.com
0822_IntheNews.indd 13
| August 2022 | PROFOOD WORLD
13
7/27/22 12:11 PM
