pet care market place update

PET CARE MARKET PLACE UPDATE
PIJAC, TORONTO, SEPTEMBER 2013
GLOBAL MARKETPLACE FOR PET CARE IN 2013
US AND CANADA: MARKET UPDATE
WHERE DO WE GO FROM HERE
3
Global marketplace update
© Euromonitor International
World moving at different speeds in 2013
4
EE +14%
WE +6%
NA +3.2%
Asia Pacific -6%
MEA +4%
LatAm +14%
Australasia +6%
Total sales reaching US$96 billion in 2013, at 5% rise in current value terms (y-on-y exchange rate)
Modest gains in North America and strong sales trends in Brazil and Russia
Return to stronger trends in economies like Germany, Sweden and the UK
Continuing weakness in Japan
© Euromonitor International
Increasing urbanisation: small breeds and other “urban” pets prosper!
Small Dogs Population
30
Ireland:
2008-2013 drop in large dog population
Increase in cat population and small dogs
25
Product development focus on cat and small
dog food:
Million
20
15
10
5
0
2008 2009 2010 2011 2012 2013
US
Mexico
Philippines
India
© Euromonitor International
Brazil
China
Japan
United Kingdom
Whiskas Indoor
by Mars Foods
Ireland Ltd
Ireland, 2012
Cesar Lightly Grilled
by Mars Foods Ireland
Ltd
Ireland, 2012
5
Disposable Incomes on the Rise…not just in Emerging Markets
2013 – US$ ’000
2013-18 % growth
New Zealand
France
Japan
USA
Canada
Australia
Canada
Hong Kong
New Zealand
Singapore
Chile
Norway
Norway
USA
United Kingdom
Switzerland
Finland
Australia
Brazil
UAE
0
50
100
150
Annual Disposable Income/Household
© Euromonitor International
0%
20% 40% 60%
Pet Care spend/Household
Annual Disposable Income/Household
6
Ongoing premiumization and adoption of human trends to pet care
Developed countries
100%
80%
44.8%
47.1%
50.7%
39.4%
37.7%
35.5%
15.8%
15.2%
13.8%
2008
2013
2018
60%
40%
20%
0%
MeraDog Breeder Puppy by
MERA Tiernahrung GmbH
Egypt, 2012
Emerging countries
100%
80%
60%
17.6%
18.8%
19.2%
51.7%
50.9%
51.0%
30.7%
30.3%
29.7%
2008
2013
2018
40%
20%
0%
© Euromonitor International
Fancy Feast Royale by
Nestle Purina
UAE, 2012
7
And Some Examples
8
Sheba Amuse,
Mars Japan Ltd,
Launched March 2012
Pet Care Wipes
Efila SA
Peru, mid 2012
Shake & Bake
H von Gimborn
GmbH
Germany
© Euromonitor International
From Hair Care to Pet Salon
in China and in Israel
Natural and Organic
Over-choice
Contamination
scare
Fast moving urban
lifestyles
New products development
9
Natural
Organic
Local
Back to Basic
Acquisitions of ‘natural’ companies
US: Natural Balance (acquired by Del
Monte in 2013) and Blue Buffalo among
top 3 of best performing brands in 200712
P&G bought Natura in 2010
Israel: Nature’s Variety Instinct
© Euromonitor International
Private Label: Gaining Share When More Refined
10
Private Label %, Pet Care
Select Gold Senior
Fressnapf
Germany
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2008 2009 2010 2011
2012
Japan
Brazil
Canada
USA
France
Germany
Spain
United Kingdom
© Euromonitor International
El Corte Inglés
Spain
Shopping experience and education
11
Global Pet Care Distribution
100%
90%
Others
80%
Education
Multichannel
70%
Veterinary
Clinics
60%
Non-Store
Retailing
Pet Shops
50%
Vet clinics
potential and
caveats
Pet Superstores
40%
Experience
30%
Supermarkets
20%
Hypermarkets
10%
Discounters
0%
2008
© Euromonitor International
2013
What’s next? Time-savvy and on-the go
12
Top 5 M-Commerce markets in 2016:
1. USA
2. Japan
3. Thailand
4. UK
5. Philippines
Between 2012 and 2016
5.4 billion
new smartphones will be purchased
© Euromonitor International
13
Look at North America
© Euromonitor International
North America sees steady growth in value
USA, US$ 29.6 billion, up by 3% in current value
Canada, US$ 3 billion, up by 3% current value
20
18
16
14
12
10
8
6
4
2
0
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2011





14
2012
2013
2011
2012
2013
Both markets see positive dollar growth in dollar value in dog and cat food, but only very modest 1% increase in volumes
Both see slowdown in growth of dog and cat population, at under 1%, a trend affecting demand for the foods
Both markets continue to see tendency towards “mass premium” in dog and cat food
Both markets see sales of Other Pet Food picking up, although driven by somewhat different dynamic of pet population
Canada sees stronger gains in healthcare and dietary supplements, while the US market shows better performance of cat litter
© Euromonitor International
Canada: overcoming challenges to growth
Dogs & cats, 000’ animals, 2008-2018
Challenges:
 Slow growth in dog and cat population – the
key “consumer base”
 Urbanization and ageing population key factors
in slowing growth of dogs and cats
 Other pets see growth (reptile/small mammals)
but cannot offset unfavorable trend in dogs and
cats population
 Cautious attitude of pet owners when it comes
to spending on therapeutic and super premium
products
 Drop in veterinarian visits and cross-border
shift for savings on medical care and products
15
16,000.0
14,000.0
12,000.0
10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
Opportunities:
 More focus on smaller dogs
 Targeted nutrition for urban pets (e.g. balanced
nutrition, weight management, in-door pets)
 “Mass premium” in food and OTC SKUs in
healthcare and supplements
 Pet care products and services aside from food
and medical care
© Euromonitor International
0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Dog Population
Cat Population
Canada: pets OTC healthcare and dietary supplements
Pet OTC healthcare worth US$55 million in 2013, up by 5% in current value
Pet dietary supplements worth US$265 million, up by 3% in current value
Retail sales, US$ million, 2008-2018
Challenges:
 Slow pet population growth
 Low level of awareness on the part of some
manufacturers and retailers with respect to
existing regulations governing sales of dog and
cat dietary supplements
 Some pet owners skeptical over benefits of
supplements
 Cross-border shopping to reduce pet health care
expenses
Opportunities:
 Better SKUs/merchandise development with
respect to OTC healthcare – choice of products
and pricing
 Education with respect to existing rules on premarketing approval for supplements
 Emphasis on compliance with regulations to
increase consumer trust in products
 Product development backed by research
© Euromonitor International
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
20082009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Pet Healthcare
Pet Dietary Supplements
16
17
Look ahead
© Euromonitor International
Latin America and Eastern Europe will lead growth
Premium segment will continue to outpace mid-priced and economy in developed and many
emerging markets, supporting dollar growth
© Euromonitor International
18
Pet population remains key to growth but challenges ahead
Dog and cat population, in 000’ of animals
140000
120000
100000
80000
60000
40000
20000
0
2008
2009
Brazil
2010
Russia
2011
2012
2013
2014
2015
2016
2017
2018
Japan
Expected growth in dog and cat population in markets like Brazil and Russia, but projected drop in Japan, which translates into
expected healthy growth for dog and cat food volumes in Brazilian and Russian markets but declines in Japanese market.
China so far is expected to see healthy growth, but watch for one-dog per household policies put in place by some
municipalities
© Euromonitor International
19
Some takeaways
20
Regions and pets
Products
Retail distribution
 Degree of recovery in Western
Europe
 Premium still on the agenda
across markets
 Rise of mass market modern
channels and chains
 Strong growth in emerging
economies
 Adopting human trends to pet
care
 Opportunities for multichannel listing
 Modest increases in NA
market
 Natural remains buzz word
 Online shops as opportunity
for small/niche brands
BUT:
BUT

Watching pet population
dynamic as urbanization
will increasingly put
pressure on the number
and size of households pets
© Euromonitor International
 Opportunities in products for
urban pet

“Mass premium” shows
more strength compared to
super premium and
therapeutic brands

Shift to smaller pets might
affect volume demand
 BUT
 Specialized retailers, especially
small pet shops and
veterinarian clinics, feel
increasing pressure from mass
channels across markets
THANK YOU FOR LISTENING
Svetlana Uduslivaia
Senior Research Analyst
Euromonitor International
Chicago
1-312-922-1115 ext. 8302
E-mail: [email protected]