Vous êtes sur la page 1sur 7

Pet Industry

In India and China

A Euromonitor International Report

hanging lifestyles in the form of the rise in
nuclear families and double income
households have encouraged the growth
of pet ownership in urban areas of India.
Increasingly, pets are being looked upon as
companions and members of the family rather
than as guard dogs for example. Pet owners
have started to take an interest in their pet’s
diet, health and grooming. A gradual shift
towards prepared pet food has been observed.
Pet owners are more willing to spend on pet
food and pet care products than ever before.
This trend has spawned an entire industry, with
a growing emphasis on pet care.
Most of the branded pet food is imported. The
government’s reduction of the import duties on
pet food in 2007 provides a boost to both
manufacturers and importers.
But the ban on imported pet food due to the
outbreak of Avian Flu in year 2006, which
continued through 2007, resulted in the
reduced availability of pet food. A few foreign
brands such as Royal Canin and Bento Kronen
escaped the ban, but others like US brands Pro
Pac and Purina were impacted. On the other
hand, locally manufacturing looked up.
According to Euromonitor International,
veterinary clinics and pet shops remained a
leading distribution channels for pet food and
pet care products in 2007. But more and more stretches beyond the realm of vaccines and
extends to advice on pet food. Thus, over the MOST OF THE
retail outlets and supermarkets started
emerging as viable distribution channels. This years, manufacturers have pitched their BRANDED PET
has reduced the influence of vets on consumer products to vets, and focused on getting them to FOOD IS
purchasing decisions. recommend products to pet owners. Most vets IMPORTED. THE
in India sell pet food and pet owners traditionally GOVERNMENT’S
In the days to come, with pets increasingly being purchased pet food from vets. However, as pet REDUCTION OF
treated as companions and fashion owners become more familiar with different THE IMPORT
accessories, pet owners, especially in the urban brands of pet food and pet care, they are
areas, are expected to spend more on their increasingly becoming the decision makers and
pets. FOOD IN 2007
making their purchases elsewhere. This trend
was shown by veterinary clinics’ decreasing PROVIDES A
Key Trends and Developments share of retail value sales of pet food and pet BOOST TO BOTH
Pet owners in India have traditionally relied on care products; its share decreased by slightly MANUFACTURERS
vets to provide them with guidance on taking over four percentage points between 2002 and AND
care of their pets. The influence of vets 2007. This gradual decline in share indicates IMPORTERS.

Creature Companion • March-April 2008 29

vets with their products and many are using the
Pet Food and Pet Care Products:
professionals to recommend prepared pet
Forecast Value Sales % Growth by Region 2005/2010 food to pet owners. Effem India Pvt Ltd was
one of the first manufacturers to target pet
owners directly through media advertisements
and direct communications. Other
manufacturers are increasingly using
advertisements in pet magazines and leaving
promotional literature in veterinary clinics.
These marketing strategies have increased
the consumers’ general awareness and
acceptance of prepared pet food.
The frequent bans on imports of pet food have
affected its availability in India. There are very
few domestic manufacturers of pet food in India
and their main focus tends to be on dog treats
and mixers such as biscuits. Apart from Venky’s
India Ltd and Tetragon Chemie Pvt Ltd, there are
no other domestic manufacturers with a pan-
India distribution. Moreover, Effem India is the
only multinational that has domestic production
that pet owners are slowly, but surely, becoming facilities. Thus, economy brands tend to be
empowered in making their own decisions available during the bans but premium and mid-
about pet food and pet food products and pet priced pet food tends to suffer as these are
welfare in general. largely imported. Since the development of pet
As the central advisory role of the vet in food is at an embryonic stage in India, the
everyday decisions regarding the pet welfare irregular availability of brands has hampered the
declines, over the forecast period, creation of brand loyalty among pet owners.
manufacturers will need to communicate
directly with pet owners. Whilst it is difficult to
target pet healthcare products and dietary
supplements directly to pet owners,
manufacturers can start this process by
promoting their pet food brands through the
media and by increasing their distribution reach
to pet shops, supermarkets/hypermarkets,
other food stores and other non-food stores.
Manufacturers should ensure that retail outlets
selling pet food also offer pet accessories and
grooming products or services.
The increasing number of pet shops and
advertisements for pet food brands, combined
with the greater concerns about pet health and
welfare, are driving the shift towards prepared
THE FREQUENT pet food. The number of advertising campaigns
BANS ON directly targeting pet owners is rising and most
IMPORTS OF PET advertisements strive to communicate the
FOOD HAVE benefits of prepared pet food and its nutritional
From 2004, imported pet food was negatively
AFFECTED ITS value over homemade alternatives. The support
affected by legislation in the form of bans on
of vets for these campaigns has led pet owners
AVAILABILITY IN imports from certain countries. In 2006-2007,
to purchase prepared food for their pets.
INDIA. THERE the import ban due to the rise of Avian Flu
ARE VERY FEW Indian consumers traditionally favoured freshly affected US-based manufacturers severely.
DOMESTIC cooked over prepared pet food. Most pet There was a breakdown in the supply chain for
MANUFACTURERS owners continue to give their pets homemade major brands such as Eukanuba, Purina, and Pro
OF PET FOOD IN food, while offering prepared food as a snack. Pac, as these are imported from the US. On the
Thus, the diet of pets in India is a combination other hand, brands such as Bento Kronen and
of prepared and non-prepared pet food. Royal Canin, which are imported from Belgium
However, the perception that freshly prepared, and France, respectively, escaped the ban and
TENDS TO BE ON homemade pet food is healthier and more their availability was not affected. Thus, the
DOG TREATS AND nutritious is changing, as manufacturers and irregular availability of major imported brands
MIXERS SUCH AS vets advocate the benefits of prepared pet has clearly affected the development of pet
BISCUITS. food. Manufacturers have aggressively targeted food in India.

30 Creature Companion • March-April 2008

The import ban on pet food continued in 2007
and shows no sign of letting up. The availability of
major brands such as Purina, Pro Pac, Sportmix,
and Iams remained in doubt throughout the first
half of 2007, with imports stuck at Indian ports
due to the blanket ban on stocks from countries
affected by Avian Flu. The cost pressures are
expected to mount on importers over the forecast
period, as they suffer from the loss of sales and
by having to pay for the stock that is held at the
ports. Whilst the major manufacturers and
importers formed an association in order to
lobby the government on the import ban, the
industry is hopeful that a positive outcome will
be achieved in the short term.
Import restrictions leading to the irregular
availability of pet food will hamper the
development of pet food in India. The irregular
availability of pet food is also expected to
prevent the major manufacturers from creating
brand loyalty for their brands. In order to
generate brand loyalty and drive expansion, the
regular availability of pet food and good are active in it. Imports currently constitute 40
distribution networks are key issues for percent of the total pet foods market in India, IMPORT
manufacturers. In order to overcome the import with the US being one of the dominant RESTRICTIONS
restrictions, manufacturers such as Purina Pet suppliers. The pet foods market has been LEADING TO THE
Care India Pvt Ltd would do well to shift the growing at an average annual rate of 10-15 IRREGULAR
production of their brands to India, as Mars Inc percent for the last few years. Consumption of AVAILABILITY OF
has done in the past by establishing Effem India branded pet foods is currently concentrated in
in the country. In addition, manufacturers should urban towns and major cities and much of the
continue to lobby the government, but given the demand for branded dog food is generated
almost wholly from the urban population, which DEVELOPMENT
latter’s position this strategy is unlikely to create OF PET FOOD IN
a long-term solution to the import restrictions. is the key target segment for marketing and
promotional initiatives. INDIA. THE
Indian Market: Waiting to be Tapped IRREGULAR
India has a large number of pet dogs and cats.
The Indian pet foods market is a young, growing In fact, a recent survey concluded that there are
market and there are a few major players that 3.6 million pet dogs in the six major cities alone.
Pet Food and Pet Care Products: MAJOR
Forecast Value Sales % Growth by Region 2005/2010 MANUFACTURERS

Creature Companion • March-April 2008 31

The affluent section of the urban population – According to Euromonitor International data, the
the 350 million strong middleclass that we hear Chinese market accounted for just 1 percent of
of so much – is the major target segment for global value sales in 2007. Although this figure
pet food products in India. Indian pet owners has doubled over the past decade, it compares
have traditionally fed their pets with home- unfavourably with China’s share of global
cooked food, and the slowly increasing practice packaged food sales, which expanded by nearly
of feeding branded pet foods is a relatively new two percentage points, to 5.2 percent over the
trend. The size of the Indian pet foods market same period. In order to bring their
estimated by industry sources at approximately performances more in line with those of their
6,000 tones and growing annually at 10-15 packaged food peers, pet food companies need
percent – very small compared to the vast to broaden their consumer base at the lower
international pet foods market. end of the market.
The vast majority of pet owners in India are high- Overall, the Chinese pet food and pet care
income households, with dogs being the most market was worth US$676 million in 2007
popular pet choice at over 55 percent of the pet (having posted a CAGR of 13% over 1998-
population, followed by cats. The Indian pet 2007), compared to a figure of US$4.7 billion in
foods market therefore predominantly caters to neighbouring Japan.
dog food products. Dog food, therefore,
In terms of segmentation, premium dog and cat
accounts for almost 80 percent and cat food for
food in China grew its value share of total sales
approximately 15 percent of the total market.
from 21 to 35.5 percent between 1998 and
Other segments such as aquarium fish food,
2007, while the share of mid-priced brands
bird food and food for other animals like rabbits
declined from 70 to 59 percent over the same
and guinea pigs account for the rest. The pet
period. The share of economy dog and cat food
foods market in India is largely concentrated on
declined from 8.7 to 5.9 percent. Moreover, by
dried foods segment and moist. Semi-moist pet
2012, it is estimated that economy products will
food is not manufactured in India.
account for just 5 percent of the Chinese dog
Indians traditionally have fed their pets and cat food market.
prepared home food scraps, thinking that this is
The growth of pet food and pet care products in
more nutritious, but this trend is slowly changing
China is being held back by a low propensity to
in major Indian cities and urban areas. In recent
purchase among the country’s less affluent
years, there has been a growing trend of young
consumers. This is underlined by the fact that
pet owners switching to branded pet foods
annual expenditure per pet in China stood at
because of increasing consideration of factors
just US$2.50 in 2007 (compared with
INDIA, A such as convenience of feeding pets with
US$70.10 in Japan). Although this figure can be
prepared branded foods and also because of
the increasing awareness resulting from
marketing efforts of manufacturers and vets
DISSIMILAR TO about the balanced nutritional benefits of
CHINA IN feeding pets with packaged prepared foods.
TERMS OF ITS The Indian perception of pets has also changed
SCALE AND as owners have come to treat them more like
DEVELOPMENT, members of the family. As a result, pet owners
ILLUSTRATES are more interested in ensuring their pet’s
HOW THE health with pets foods designed for specific
POTENTIAL OF health conditions leading to increased demand
ECONOMY for branded specialized pet food products.
China vis-a-vis India: Economy Segment
REALISED IN set to Grow
CHINA. The pet food and pet care products market in
China remains relatively underdeveloped.

32 Creature Companion • March-April 2008

Asia-Pacific: Pet Food and Pet Care Products Value Sales by
Country 1998-2005

increased by selling ever more expensive helping to transform the country’s logistics IS HELPING TO
premium and super-premium products to industry, reducing distribution costs and opening TRANSFORM THE
existing consumers, there is far greater potential up new swathes of potential consumers to pet COUNTRY’S
for sales growth (in both volume and value food manufacturers. This has gone hand-in-hand LOGISTICS
terms) in luring pet owners who continue to feed with the spread of chain retailers, that are INDUSTRY,
their pets household scraps into the economy moving beyond the metropolitan areas of REDUCING
segment. Beijing and Shanghai to second- and third-tier DISTRIBUTION
cities. Pet superstore Cool Baby’s expansion COSTS AND
India, a market not wholly dissimilar to China in
into such markets as Nanjing and Yantai has
terms of its scale and development, illustrates OPENING UP NEW
been particularly notable in this regard. In the
how the potential of economy brands is not yet SWATHES OF
medium term, the spread of chain retailers into
being realised in China. The economy products POTENTIAL
the less developed provinces of mid- and west
accounted for 61 percent of total cat and dog CONSUMERS TO
China will provide an additional boost to sales.
food value sales in the country in 2007, up from PET FOOD
32 percent in 1998. A sustained marketing effort will also be MANUFACTURERS.
required to drive demand for economy products.
While the overall growth of Indian pet food and
Although China’s urban population is expanding
pet care products was less than that of China in
rapidly and should eclipse its rural counterpart
the 10 years to 2007, it is estimated that India sometime during the next decade, the country
will achieve a CAGR of 11 percent between retains many of the cultural characteristics of a
2007 and 2012, compared with a figure of 8.6 peasant society. This is of particular relevance
percent in China. The divergence in for the pet food market, as it is the continuance
performance between these two markets will of rural attitudes towards animals that is in
be at least partly the result of the relative many respects responsible for hampering the
narrowness of China’s pet food consumer base growth of economy pet food. By stressing the
compared to that of India. benefits of packaged pet food over household
Savvy pet food manufacturers can utilise these scraps, marketing can play an important role in
trends to grow their overall share of the Chinese breaking down these established attitudes in
market. This stratum of consumers is extremely order to promote anthropomorphism and
price-sensitive and high-volume, low-margin develop the market.
sales will be vital to profitability. As a result, Unlike the premium and mid-priced pet food
manufacturers that invest in local production segments, in which foreign firms are dominant,
facilities will gain an important additional cost indigenous firms are best placed to benefit from
advantage. any growth in economy pet food sales. Although
A huge improvement in both the quantity and this segment has been extremely fragmented, it
quality of China’s transportation infrastructure is would appear to be consolidating rapidly. For

Creature Companion • March-April 2008 33


Increasing pet ownership driven by smaller household Dog food, cat food, and small mammal food
sizes in developed markets
Pet humanisation Premium dog and cat food, dog and cat treats, and pet
care products
Increasing influence of consumer health awareness Functional dog and cat food, added-value other pet
on pet-related purchases food, dietary supplements and healthcare products
Development of an upper-mass segment bringing Dog and cat food, including dog and cat treats, with
premium qualities to the mass market functional properties
Pressure on living spaces in urban areas Small mammal/reptile food, fish food and products
targeting small breeds of dog
Accelerated consumer lifestyles creating demand for Dry dog and cat food, which is easier to serve and store,
convenient products with a longer shelf-life and less odour than wet
alternatives. Resealable pouch packaging for wet dog
and cat food
Increase in indoor pets Cat litter, dry dog and cat food
Expansion of pet superstores in major markets Premium dog and cat food, treats and pet care products
Ageing pet population due to healthier diets and Dog and cat food targeting specific, age-related medical
improved veterinary care conditions such as arthritis and diabetes
Increased segmentation Products targeting pets according to factors such as
age, breed, size, coat length and lifestyle
Growing consumer concern regarding the provenance Increasing demand for pet food made with ‘natural’
and manufacture of pet food ingredients, and organic products

example, Euromonitor International data shows

that the combined market share of the three
largest players (Chengdu Care Pet Food, Nory
Pet and Zhangjiagang Lianfeng Pet Food)
increased from 20 to 38 percent between
2000 and 2006. With growth in this segment
likely to take off in the medium term, some of
the global market’s larger players may be
tempted to make an acquisition in order to
BY STRESSING boost their growth, gain control of local
THE BENEFITS production facilities and improve their overall
OF PACKAGED position in the potentially lucrative Chinese pet
PET FOOD OVER food market.
SCRAPS, Top Global Trends till 2012
MARKETING Until now, pet food private label products have
CAN PLAY AN been largely confined to the economy segment,
encroachment, issues such as the quality and
IMPORTANT with the exception of Germany and, to a lesser
tractability of ingredients will be brought to the
ROLE IN extent, the US, but they are beginning to develop
fore by the US Menu Foods recall. Consumers’
BREAKING a presence in the premium and mid-priced
faith in branded pet food products, as markedly
DOWN THESE segments.
superior to their private label counterparts, will
ESTABLISHED Pet food superstores are particularly well placed be weakened. As a result, products that contain
ATTITUDES IN to exploit this trend. In the developed world, this human-grade ingredients will gain a significant
ORDER TO may be facilitated by the shadow cast over advantage.
PROMOTE branded products by the Menu Foods recall, as
In developing economies, the economy products
ANTHROPOMOR- well as growing economic insecurity, particularly
will be the main driver and much of the growth is
expected in this segment. As the economy
DEVELOP THE Euromonitor’s report also proposed that in segment in developing markets is price sensitive,
MARKET. addition to the growing threat of private label it will be very difficult for producers to add value.

34 Creature Companion • March-April 2008

The very nature of this segment precludes pet food producers to increase sales volumes
significant innovation. The private label products will be limited. While there will be some FOREIGN PET
are likely to gain in such markets which will put potential for premium products in locations with FOOD
additional downward pressure on margins. concentrations of affluent consumers, including MANUFACTURERS
Moscow, Beijing, Shanghai, Mexico City and Rio COULD USE
Most of the growth in retailers’ private label sales
de Janeiro, these will be niche, rather than THEIR NICHE
is likely to come from the economy segment, as
mass, markets. MARKETS TO
rising employment boosts disposable income
and reduces poverty, adding millions of new However, foreign pet food manufacturers could FACILITATE THE
consumers to the bottom of the market. use their niche markets to facilitate the DISTRIBUTION OF
distribution of their products in developing THEIR PRODUCTS
Branded pet food products can address these
markets, making it more difficult for indigenous IN DEVELOPING
issues by aggressively pushing into developing
manufacturers to develop their own premium MARKETS,
markets in terms of both distribution and
offerings. MAKING IT MORE
marketing. It could be argued that such an
investment would be uneconomic. But the But one strategy that indigenous firms in DIFFICULT FOR
potential for growth in these markets over the developing markets can use to gain an INDIGENOUS
medium and long term is huge. advantage over foreign rivals at the very top end MANUFACTURERS
of the premium segment is to market their TO DEVELOP
As a result of the limited affordability of premium
products in terms of their freshness. THEIR OWN
products in developing markets and the ability of

M an’s best friend gets a makeover as a

new trend in personal care sees the
introduction of pet cosmetics. The hunt is on
developed a pet shampoo and conditioning
range under the John Paul Pet label.
Even celebrities are getting in on the act. Much
in developed markets for cosmetics and
publicised dog doter Pamela Anderson has
toiletries to find untapped consumer groups.
signed a deal with Mascolo’s hair care brand
But as penetration rates soar among men,
Bed Head to launch a range of products for
teens and now even tweens it was only a
people and their pets. Anderson, who held a
matter of time before attentions turned to
commitment ceremony for her two canine
what have become the ultimate in fashion
companions last year, said the line would
accessories – pets.
include everything from hot rollers to
Pampering pooches has become big sunscreens and verifies that the products will
business in some developed markets; mainly “only [be] tested on humans of course”.
the US, but also in Asia-Pacific and Western
Europe. US consumers spent more than Purr-fect Products
US$21.4 billion on their pets in 2005, with Cosmetics and toiletries for pets is still in its
pet care products such as accessories and infancy and there is plenty of scope for
grooming products proving the most dynamic development. Potential products include oral
market sector. Business is booming with an hygiene products, including toothpastes and Euromonitor
ever growing range of pet treats available on breath fresheners, and fragrances, but the key International is the
world’s leading provider
today’s market. From US$225 Burberry dog to success is maintaining a prestige or of global business
trench coats to Omaha Steaks’ gourmet speciality brand image. The kinds of intelligence and strategic
steak bites for dogs there is a product for consumers who are willing to spend freely on market analysis. They
have more than 30 years
every pet-lover’s whim. pampering their pet are looking for products experience of publishing
Now the cosmetics and toiletries industry is that are on par with what they would use on market reports, business
themselves. reference books, online
joining the pack, offering fur, paw and skin databases and bespoke
care in hope of attracting some of the pet Celebrity brands or endorsements could also consulting projects.
care pie. be big winners (perhaps Paris Hilton and her Their research offers
insight into industries,
Chihuahua Tinkerbell will soon follow countries and consumers.
Shampoodle Anderson into the pet care category?) as could They deliver quality
Macy’s has just opened its second pet brands endorsed by veterinarians or famous information solutions to
support strategic
pampering display; the US department store pet shows, such as Crufts. The majority of business planning.
chain positioning the Up on the Woof range launches to date have focussed on dogs, with Euromonitor International
right alongside its premium skin care brands. cats being far less likely to put up with being is headquartered in
Up on the Woof uses gentle, natural washed and groomed. Yet the feline category London, with regional
offices in Chicago,
ingredients and includes shea butter or could still hold promise, with dry, powder Singapore, Shanghai and
oatmeal dog shampoo and paw balm. Salon shampoos and scented sprays being among Vilnius, and has a
hair care line Paul Mitchell has also the innovations that may have potential. network of over 600
analysts worldwide.

Creature Companion • March-April 2008 35