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June 25, 2012

In For a Treat? – Global Pet Treat Sales Show No Signs of Slowing

HeadlineArticleBlogImageAnalyst Insight By Paula Flores – Global Head of Pet Care Research – Euromonitor International

Euromonitor International’s latest research on the global pet care market, published earlier this month, indicates another solid year’s performance in store for 2012. This comes despite persistent economic uncertainty, mounting troubles in the EuroZone and continued political instability in several emerging markets. Overall retail growth should be stronger than in 2011, with total sales approaching US$95 billion worldwide in 2012. This represents a year-on-year constant value gain of 2.5%.

Pet humanisation and premiumisation remain the main trends behind this good performance, with pet owners still wishing to give their pets the very best. As pet owners increasingly become pet parents, the impact on treats has also become more apparent. As good parents, they wish to reward their dogs or spoil their cats. The treats market shows no signs of slowing, with cat treats one of the industry’s fastest growing categories worldwide.

In Western Europe, where pet care is expected to perform sluggishly overall, the cat treats category is expected to post 5% constant value growth in 2012. Germany leads global spending in pet care, with US$44 per cat-owning household currently spent on treats.

Functional treats are also gaining traction worldwide, with manufacturer promotions and greater consumer education raising awareness of issues such as oral and dental health. Added-value products with more refined ingredients are also at the forefront of innovation, examples being cat treats with a high protein content, such as the Bonzo brand in Israel.

Dog treats should record an even stronger retail performance in 2012, with expected real term gains of 6% on 2011. Dog treats are increasingly associated with indulgence, with premium-minded 100% meat snacks becoming increasingly popular. A good example of this is Purina Beneful Feine Belohnung Mix in Austria. Each pack contains three different flavours - beef, chicken and lamb. These snacks are also rich in vitamins, proteins, omega-3 and -6 fatty acids and antioxidants.

However, the world beater remains Latin America. Although cat treats remains a niche category across the region in absolute terms, sales are nevertheless growing strongly. For instance, Chile is the world’s fastest growing market for cat treats, achieving impressive 22% constant value growth in its second year. In dog treats, Argentina is the world’s fastest growing market, with year-on-year gains of 21% expected in 2012. All this is a sign that increasingly affluent consumers are more willing to reward their pets in emerging markets, following international patterns.

The largest market, however, for dog and cat treats remains, unsurprisingly, the US, with combined sales of more than US$2.8 billion. Indeed, the US is the only market where dog treat sales are actually expected to decline in 2012 due to the market’s maturity.

Regardless, pet care, and more specifically pet treats, is expected to perform well over the short term. Cat treats will experience stronger growth as the category is less developed, but dog treats will also do very well. Indulging and rewarding one’s pets are here to stay. Innovative manufacturers offering greater indulgence and functionality stand to succeed amidst wider global uncertainty.



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