Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Dog and cat food; Dog and cat food by price platform (excl treats and mixers);
Dog and cat food by price platform (incl treats and mixers); Dog and cat food
by type (excl treats and mixers); Other pet food; Pet care products
Executive summary
EXECUTIVE SUMMARY
Premium products see highest growth
Pet food experienced a double-digit value growth in 2006. Super premium and
standard premium dog food saw the highest growth. An increasing number of
companies are looking to improving margins by investing in value-added
products and seeking to escape from the stiff competition in low and
mid-priced products. Increasing disposable income levels for pet owners and
the increasing perception of pets as members of the family also encouraged pet
owners to purchase higher-priced prepared food that offers added vitamins and
minerals.
High taxation and informality hinders growth
Taxes account for up to 50% of the retail selling price of pet food and pet
care products in Brazil, where most consumers have low-income levels.
Consequently, many small companies with few resources operate informally.
Informal sales distort competition and hinder development. Formal players
cannot fully compete with low informal prices but attempts to do so reduce
profits, thus constraining their further investments in technology and new
product launches.
Players bet on niches
Many players invested in niche pet food during the review period. Strong
competition from small and medium-sized players in low-priced pet food led
some players to focus on value-added products that meet specific pet needs and
target pet owners in high-income brackets who are less price-sensitive. Recent
niche product releases included food for certain breeds of dogs, such as
terriers and pit bulls, food for Persian cats and food designed to alleviate
intestinal, cardiac, diabetics and urinary problems.
Pet superstores attract pet owners and others
In more developed urban areas such as São Paulo and Rio de Janeiro, pet
superstores attract numerous pet owners and potential consumers with a wide
variety of products, brands and services, including veterinary clinics, pet
bathing, pet hotels and pet training. Some pet superstores attract more than
1,000 consumers on weekends, such as the largest pet superstore chain Cobasi.
With new units opening and the growing popularity of pet superstores, pet
superstores are expected to further boost growth in pet food and pet care
products during the forecast period.
Pet food far from commoditisation
With just 42% of cats and dogs being fed with prepared pet food in 2006, pet
food is far from reaching maturity. Further manufacturer investments are
likely to be centred on value-added products with the strongest growth
potential, such as premium dry dog and cat food and mixers and treats. Treats
represented just 2% in value sales of dog food in 2006 but is expected to
become more significant during the forecast period. Players are expected to
increase investments in advertising campaigns in order to educate consumers
about the benefits of prepared food over non-prepared food.
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