HACKENSACK, N.J.— Pet-food costs are on the rise, with Hill's anticipating a 7.4 percent increase and Nutro expected to raise its prices again. While consumers will spend about $16.9 billion on pet food in 2009, cost increases and declining economy will drive them to turn to grocery-store brands.
Pet-food makers point to rising costs of energy, ingredients, packaging and transportation. Corn, a main ingredient in many dog foods, climbed to a record $7.99 a bushel on June 27, abetted by the push to use corn-based ethanol in gasoline. Oil prices surged to more than $147 a barrel in July, driving up transportation costs.
Industry experts and analysts have cited the pet-products industry as one of the few to be insulated from economic troubles.
Pet food is the largest segment of the pet-products industry, which was estimated to be $43.4 billion in 2008 by the American Pet Products Association, Inc.
"Even during these tough economic times, pet food is no longer considered a discretionary purchase because pets are considered members of the family," said Kurt Gallagher, communications director for the Pet Food Institute, a Washington D.C.-based association representing companies that manufacture in the United States.
