Pet Supplies
U.S. PET MARKET Market forecast to grow at a CAGR of 3.5%
A proposed EPA rule has the pet industry howling. The rule would establish required Renewable Fuel Standard (RFS) volumes and percentage standards for 2023, 2024, and 2025 (see chart) . The EPA also recommended a series of modifications to strengthen and expand the RFS program. The pet food industry’s response was swift but mixed due to concerns that the proposal could impact feed stocks. For example, some analysts predict that the United States would need an additional 55 million to 60 million acres to plant soybeans to meet renewable diesel demand. However, U.S. farmland is already accounted for, so these additional acres would displace any current crops. “It is important to pause further increases in biodiesel blending quotas until it is demonstrated that the production of necessary feedstocks can catch up to demand, allowing for fuel and food producers to avoid competing for edible oils,” says Dana Brooks, president and CEO of Pet Food Institute, a pet food makers association. “Such competition will further exacerbate supply issues and increase prices.” BIOFUELS: A PET PEEVE
Source: Research and Markets
SHORTAGES HOUND PET SUPPLY GROWTH A rising millennial population, growing adoption of e-commerce to buy pet care products, and an increasing number of single-person households are driving growth in the U.S. pet market. The U.S. pet market will reach $135.2 billion by 2026, predicts a Research and Markets report, with a compounded annual growth rate of 3.5%. But with that growth comes supply chain challenges, including pet food shortages. A primary contributor to these shortages: surging pet ownership during the pandemic. Pet ownership rose to an all-time high of 70% of U.S. households in 2020, according to the American Pet Products Association. Other factors include inflation, shortages of feed stocks and aluminum used to make cans, and dwindling farmland devoted to producing feedstock. Surging pet ownership led to increased pet food sales, and in 2021, consumers continued to buy pet supplies through e-commerce. This trend will continue. Nearly one- third of pet supplies sales will be through e-commerce channels by 2025, predicts a Statista study. The most popular e-commerce sites for pet supplies? Based on revenue, they are Amazon, Walmart, and Chewy, according to the Statista study.
PROPOSED VOLUME TARGETS BILLION RENEWABLE IDENTIFICATION NUMBERS
2023 2024 2025 0.72 1.42 2.13 2.82 2.89 2.95 5.82 6.62 7.43 20.82 21.87 22.68 0.25 N/A N/A
CELLULOSIC BIOFUEL BIOMASSBASED DIESEL*
ADVANCED BIOFUEL RENEWABLE FUEL
SUPPLEMENTAL STANDARD
*Biomass-based diesel is in gallons Renewable Identification Numbers are serial numbers assigned to a batch of biofuel for the purpose of tracking its production, use, and trading Source: U.S. Environmental Protection Agency
22 Inbound Logistics • January 2023
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