The 2024 Pet Fair Asia was bustling, reflecting the immense growth potential of the pet industry. In recent years, the rapid increase in the number of pets in China has also driven a surge in demand for pet food. In 2023, the size of China’s pet market reached 279.3 billion yuan, with pet food accounting for 52.3%, making China the second-largest pet consumer market globally[1].

However, we must also recognize that the production of meat-based pet food has a significant impact on global warming. A study by the University of Edinburgh assessed the carbon footprint of pet food and found that dry food made from meat accounts for 2.9% of agricultural greenhouse gas emissions. Cat food contributes more, as cats require animal protein, while dogs are omnivores[2].

The dual carbon goals are within sight. How will the green and low-carbon transformation of China's pet food sector begin? A freeze-dried pet food company from Shanghai has set a good example for the industry.

01. From "the first freeze-dried quail egg yolk" to "leading industry product carbon footprint certification"

Shan Yanfeng, the founder of Shanghai Yuanxian Pet Food Co., Ltd. (referred to as "Yuanxian Pet Food"), has over 18 years of experience in freeze-dried pet food. He is credited with the creation of the world’s first freeze-dried quail egg yolk, thanks to his expertise in refrigeration technology and frozen food. Shan invented an innovative process to maintain the yolk's intact shape. In 2018, this product was exclusively sold under the Patner brand and quickly became a sensation in the pet industry[3].

In 2020, Shan Yanfeng founded Yuanxian Pet Food, focusing on the production and R&D of complete pet food. The company has formed close OEM partnerships with several mid-to-high-end domestic and international brands, including Fubei Pet Food.

Some high-end brands of Yuanxian Pet Food Service

In 2023, Yuanxian Pet Food achieved several significant milestones, one of which was becoming the first pet food factory in China to apply HPP (High Pressure Processing) technology to freeze-dried raw bone and meat production. While HPP technology has been used in the U.S. for nearly five years in freeze-dried raw bone and meat production, many in China were still hesitant about whether this technology could succeed in the domestic market. Shan, however, took the lead, boldly adopting this process and filling a gap in the domestic market[4].

Shan’s pioneering spirit has laid the foundation for Yuanxian Pet Food to lead the industry in innovation. Recently, the company initiated carbon footprint calculation and certification for its pet food products. With the assistance of Carbon Newture, Yuanxian Pet Food successfully completed the carbon footprint calculation for its "freeze-dried chicken raw bone and meat" product, strictly following the ISO 14067 standard to ensure data compliance. The carbon footprint was also certified by the authoritative third-party organization, SGS.

This product’s carbon footprint information is now available on the China Carbon Disclosure Platform for Light Industry Products and Arts-Crafts, allowing consumers to easily access detailed carbon footprint data and certification.

By actively supporting China's carbon peaking and carbon neutrality goals, Yuanxian Pet Food has started calculating and certifying product carbon footprints in pet food. This not only provides accurate upstream supply chain carbon footprint data for downstream brand owners but also offers pet food brand managers rigorous reference information for developing green, low-carbon products, promoting a green transition across the pet food supply chain.

From inventing the first freeze-dried quail egg yolk to leading the industry in completing pet food product carbon footprint calculations, Yuanxian Pet Food’s achievement of product carbon footprint certification marks an important step in China’s pet food industry’s progress toward carbon neutrality. This milestone drives the industry toward green transformation and development.

02. The high-end path of pet food brands under the trend of green consumption

In recent years, the pet food industry in China has been moving towards brand premiumization.

Recent statistics show that the proportion of high-spending pet owners—defined as those who spend more than 500 yuan per month on staple pet food—has consistently been over 20%. The “family member” status of pets drives owners' willingness to spend more on pet products. Research by Founder Securities indicates that premiumization will be the future trend in China’s pet food industry [5].

On the other hand, as Millennials and Gen Z become the main force in the pet market, their expectations for pet food are rising. According to market research firm Euromonitor International, younger pet owners are more likely to view their pets as family members and are therefore willing to spend more on pet food. High-end brands often excel in production processes and brand stories, showcasing their meticulous care for pets. The demand for premium pet food has seen significant growth, especially among Millennials and Gen Z pet owners [6].

The growth of the premium pet food market not only reflects the young consumers’ pursuit of quality but also their love and sense of responsibility towards their pets. This demographic often has a strong sense of environmental responsibility and prefers green consumer products and brands.

In response to the global climate crisis, international premium pet food brands like Royal Canin have recognized the importance of their role in keeping global temperature rise within 1.5 degrees Celsius and have begun actively working to reduce the carbon footprint across their value chains. In 2021, Royal Canin committed to achieving carbon neutrality by 2025 and achieved carbon neutrality certification for its first product line (kitten and puppy series) in 2022. Previously, its parent company, Mars, announced its goal to achieve net-zero greenhouse gas (GHG) emissions across its entire value chain by 2050.

03.Green consumption helps domestic pet food brands create differentiated advantages

After a period of rapid development, the domestic pet market has now entered a relatively stable growth phase. From a product perspective, both pet food and pet supplies face issues of product homogeneity. The future strategy lies in creating differentiated flagship products and effective brand management [7].

This year, there has been a trend of intensifying competition within the pet industry amidst growing homogeneity. Finding a breakthrough has become an ongoing challenge for pet food manufacturers.

On the other hand, domestic pet food brands have been catching up with foreign brands and gaining increasing market share. According to Euromonitor data, in 2022, domestic brands accounted for 17.2% of the top 20 pet food brands by sales in China, while foreign brands held 13.4%.

Building brand differentiation through "green consumption" could become a powerful weapon for domestic pet food brands to overcome product homogeneity and capture more market share.

By conveying clear carbon footprint information to consumers, Yuanxian Pet Food's carbon footprint calculation and certification achievements can help downstream brands promote the concept of "green consumption". Leveraging the "green consumption" brand concept, domestic pet food brands might further highlight their differentiation in branding, products, and marketing, leading to sustained market share growth.

Additionally, it is worth noting that China is one of the major exporters of pet food globally. According to data from the General Administration of Customs, the export value of pet food in China for the first to fourth quarters of 2023 was 1.78 billion yuan, 2.22 billion yuan, 2.34 billion yuan, and 2.29 billion yuan respectively, showing a 4.5% year-on-year growth. In 2024, at the world’s most influential pet products exhibition in Nuremberg, Germany, Chinese companies were the largest overseas delegation, with 472 exhibitors, accounting for 22% of the total, setting a new record and even surpassing the number of German exhibitors.

In the context of increasingly strict green and low-carbon requirements in international trade, Yuanxian Pet Food’s carbon footprint calculation and certification results will also be a valuable asset for pet food brands’ export operations.

With the goal of being a "leading global player in freeze-dried pet food", Yuanxian Pet Food will work with upstream and downstream supply chain partners to promote the green transformation of the pet food industry.

References：

1.《2023-2024年中国宠物行业白皮书（消费报告）》

2.派食记：宠物吃湿粮产生的碳排放量是干粮的8倍

3.宠业家：那个喊出冻干一切的老单，在上海搞了个做生骨肉新工厂

4.宠业家：源鲜成国内首家将HPP灭菌技术应用到冻干生骨肉生产的宠食工厂

5.红刊财经：养儿式养宠、节假日一“窝”难求 ，宠物食品迈向高端化、品牌化

6.派食记：为何高端宠物食品成为年轻宠物主的新宠？

7.证券时报：亚洲宠物展规模再创新高，行业呈现消费升级趋势

8.部分宠物图片来自pexels