Latest Research: Pet Care Live – Regional Highlights

Euromonitor International is pleased to announce that the new 2017 Pet Care edition is now live. The updated research provides the latest insights into how the pet care industry is expected to perform in 2016 and identifies the key prospects through to 2021.

Key research highlights

Overall, good growth is expected in 2016, at 2% in global value terms, similar to that experienced in 2015. Latin America was the best performing region in the period between 2011 and 2016, with regional value sales of pet care growing by 32% at constant 2016 prices, and absolute value gains in excess of US$2.4 billion. Asia Pacific also posted good growth, backed by Japan’s performance, which, after years of stagnation has now returned to slightly positive growth. This is excellent news, as it is the largest market in the region. China has also seen a good performance as more pet owners pamper their pets.

Latin America and Asia see the most dynamic growth

Despite all the economic hurdles in Brazil, where economic recession is expected to continue in 2016 and real GDP is projected to contract by 3.2%, other than the US, the country posted the greatest actual growth in value terms with additional sales of US$760 million at constant 2016 prices in 2011-2016. This is testament to the increasing humanisation of pets and how consumer education is starting to pay off. Also in Latin America, Mexico maintains a good position, particularly in pet food, with current value gains of US$675 million between 2011 and 2016.

Smaller markets offer good prospects

Some of the fastest-growing markets in the period between 2011 and 2016 were Thailand and Mexico, which posted respective CAGRs of 12% and 8%. Mexico is now among the top 10 largest markets, which is due to increasing humanisation of pets. Dogs are the most popular pets, with dog food growing by 50% between 2011 and 2016. Thailand ranks as the 19th largest market in pet care terms, totalling US$760 million. It is one of the most dynamic markets in the region and the fact that local companies are present in addition to the rising interest of international players speaks volumes.

India, Peru or Saudi Arabia are good examples of less developed markets seeing exceptional growth. These offer great potential to be explored, as more consumers increasingly humanise their pets. While India is growing from a very small base, it is enjoying a strong economy and a shift in attitudes towards pets. In fact, the Indian pet care market doubled in size during the five years to 2016. A swelling middle class tends to be quite Western-orientated, which is helping to drive growth in dog ownership. The proportion of households with a dog rose from 3% to 5% between 2010 and 2016. However, cat ownership remains rare – just 0.4% of households had one in 2016, with cat food value sales worth a mere US$5 million in 2015 (compared with a figure of US$183 million for dog food).

Expected recovery in Russia

After a negative performance in 2015, reflecting the mounting economic problems, Russia is expected to return to growth in 2016. This is also the result of the growing popularity of pets in Russia – with the dog and cat population growing by 12% between 2011 and 2016. Russia still has low prepared food consumption levels, currently 24% for cats and 13% for dogs, which offers good opportunities for continued market growth.

Less dynamic

In the 2017 pet care edition changes to the Venezuelan currency have been made in order to better reflect the reality of the country’s situation. The exchange rate with the US dollar has had a significant impact on the local economy, in turn affecting growth rates. The country was under severe pressure due to a lack of raw materials and the restraints caused by government policy on imports, which became even more restrictive. Companies could not import most of their requirements and buyers could not find many products, which translated into a pet food shortage.

Dark clouds still loom in markets such as Ukraine and Greece, where a decline is expected for 2016. The economic circumstances, for example hyperflation, and the tensions in the region are affecting consumers and their pets in Ukraine, with GDP declining by 9.9% in 2015. In Greece, austerity measures and other fiscal cuts will stifle any recovery.

What the future holds

Euromonitor International forecasts that the CAGR for 2016-2021 will remain in line with current growth rates. A 2% CAGR is expected for the period at 2016 constant prices, with gains in excess of US$13 billion added to global pet care sales. Asia Pacific and Latin America are expected to be growth drivers for the industry, with gains in both regions largely surpassing those of Western Europe.