The pet food industry has largely grown on the back of premiumization: Pet owners want the best for their pets and have historically been willing to pay more to get it. But the last five years have started to wear on everyone’s bank accounts, and 2025’s increase in living expenses overall and various economic instabilities have even the most resilient consumers wondering if it’s time to trade down.
“Today’s pet parents are at a crossroads of quality and price,” said Jorge Martínez, global president, pet nutrition at ADM, a global agricultural supply chain manager and provider of animal nutrition. “Their compassion for their pets has them hunting for the highest-quality products, yet the unpredictable economic environment leaves them searching for the best value. This trend is best represented in the premiumization and market share growth of private label products. Store brands are branching out, expanding their pet product portfolios and launching premium food products that rival national brands. According to a 2025 Pet Trends report from Numerator, Walmart and Dollar General are seeing private label pet sales growth while Amazon pet product purchases increase as consumers hunt for the best deal. In 2026, pet brands should focus on meeting consumer needs through affordable products that offer premium nutrition, ingredients and packaging.”
The “more for less” pet consumer mindset
Overall economic trends indicate that pet parents are becoming more financially discerning, something that the generally turmoil-resistant industry has only had glimpses of compared to some other segments.
“Pet owners are still looking for premium nutrition, but they’re becoming more price conscious,” said Melissa Weber, Ph.D., director of technical services for ingredient a formulations expert Rangen Pet Nutrition. “They want clean labels, functional benefits, sustainability and transparency — yet they’re also feeling the squeeze of broader economic pressures. This is pushing the industry toward a more thoughtful version of premiumization, where delivering real value and science-backed benefits matters just as much as keeping products affordable.”
There may be a deeper trend at play here, one that might explain why pet owners are still paying premium prices when they’re watching their wallets everywhere else: a downgrade in veterinary care, leading to nutrition as a surrogate in the hopes that top feeding will reduce illness and chronic conditions.
According to a poll conducted by PetSmart Charities and Gallup in November and December 2024 and January 2025, among pet owners who said they’d not brought their pet to the veterinarian within the past year, or have ever declined care recommended by a veterinarian:
- 64% of respondents making less than US$36,000 per year said they couldn’t afford the cost of veterinary care in the previous 12 months (see Figure 1).
- A shocking 72% in the US$36,000–$59,999 income bracket said the same.
- In the US$90,000 or more income bracket, 44% said the “care was not worth the cost,” something 42% of the US$60,000–$89,999 bracket agreed with.
Still, “premium ingredients, novel proteins and ‘human-grade’ formulations often come at higher cost,” said Dr. Steve Lerner, senior scientific and business advisor at global biotechnology company Novonesis. “Combined with economic uncertainty (inflation, recessions), some pet owners may trade down, limiting the addressable market for high-end offers.”
What this means for the pet food industry
Innovation is key to maintaining a healthy market, but when uncertainty creeps in it’s often the first thing to go.
“Pet food brands will continue to contend with economic pressures,” said Nicole Hill, vice president of strategy and innovation for Nextin Research by MarketPlace. “While pet parents are more likely to reduce their own expenses before cutting costs on pet-related purchases, tighter budgets often suppress new product trials.”
So, what’s the best way to balance innovation with caution? In April 2025 Qmarkets, an innovation software builder, published a piece titled, “Why innovation is key to business resilience in a recession.” According to the article, there are five strategies for innovation to build business resilience in a recession:
1) Continuous improvement: Optimize what you already have. “When resources are tight, small operational gains matter,” said Emma Sendra, director of innovation management solutions are Qmarkets. Using a continuous improvement methodology to identify inefficiencies, eliminate waste and improve workflows can be incredibly useful during leaner times.
2) Balance austerity with creativity. “During downturns, most companies cut back,” said Sendra. “That creates a rare opportunity for those willing to invest in innovation. Customers will still spend — but they’ll spend more selectively. Innovation that delivers lasting value, durability or cost-savings will resonate more than ever.”
3) Unlock employee ideas and boost morale. “Employees need to feel part of the solution,” said Sendra. Moves like appointing innovation ambassadors, sharing success stories, making participation easy and recognizing high-value ideas can keep employees feeling invested and lessen anxiety during uncertain economic times.
4) Intensify your impact: Keep innovation customer centric. “When a recession hits, consumers become more selective with their spending,” said Sendra. “That makes it critical to ensure that any new product, service or offering perfectly aligns with customer needs.”
5) Scout the right opportunities — internally and externally. “An innovation strategy that builds business resilience doesn’t rely solely on internal resources,” said Sendra. “Recessions often bring unique opportunities to acquire technology, partner with startups or license IP at reduced cost.”
Meeting consumers where they’re at remains key
There will continue to be pet owners at all levels of willingness to spend on their animals, no matter what the economic situation is.
“I anticipate a growing spread in consumer spending behaviors,” said Jessica Jarett, advisor and principal scientist – pet and lifestyle for ingredient supplier and animal nutrition expert Cargill. “Premium offerings will remain strong among higher-income households, while value-conscious consumers seek affordable options without compromising quality. Delivering innovation and functional benefits across these tiers will be critical to meeting market needs.”
Part of that, as always, will include maintaining and strengthening relationships with customers, from brand identities to points of sale.
“2026 will mark a shift in traditional online shopping for pet owners,” said Taylor Harnois, general manager of point-of-sale software company eTailPet. “Pet owners want to buy from people who know their pets’ names and what kinds of treats and toys they like. Expect independent pet retailers to reposition themselves as ‘community hubs’ rather than stores, building traffic through in-store adoption events, rescue partnerships, and local experiences that e-commerce giants can’t replicate. The retailers that humanize their operations, rather than digitize them, will win loyalty.”
At the end of the day, balance will be vital, according to Yannick Verry, brand director for the Fi events portfolio at Informa Markets.
“The path forward requires balancing scientific innovation with commercial pragmatism, ensuring that functional benefits translate into clear consumer value propositions that justify premium positioning in an increasingly price-conscious market,” he said.
