Pet Food And Pet Care Products in Hungary

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

Retail volume and value growth in 2007 but signs of slowdown

Pet food and pet care products continued to grow in retail volume and current value terms in 2007, although growth was slower compared to the review period volume and value CAGRs. This growth pattern is attributable to demand being more mature compared to the start of the review period. Moreover, the economic downturn in 2006 encouraged consumers to limit their purchases of non-essential products. Whilst most pet owners consider pet food as essential items, the trend was for consumers to trade-down to economy products.

Changing lifestyles drive demand

Throughout the review period, demographic trends and changing lifestyles stimulated sales of pet food and pet care products in Hungary. In particular the rise in the number of single-person households has increased the need for companionship. Consequently, pets are increasingly perceived and treated as family members, with the number of pet owners willing to purchase prepared pet food increasing rapidly.

Rising incomes stimulate growth

Since the mid-1990s, income levels have risen steadily in Hungary. As the population' s purchasing power increases the number of people who can afford to increase their spending on pets is rising. In addition, the changes to the Hungarian economical and political systems brought about by the collapse of the Soviet Union, have created a new class of consumer. The emerging, affluent urban middle-class is increasingly drawn to new status symbols, such as owning purebred animals. This trend had a positive impact on the pet population in Hungary and boosted sales of pet food and pet care products.

Multinationals dominate pet food and pet care products in Hungary

There are only a few domestic players active in pet food and pet care products in Hungary, which is dominated by international companies and brands. The four largest players in 2006 were: Nestl&eaucte; Purina Petcare Hungary Kft, Masterfoods Magyarország Kft, Vitakraft Aqua Food Kft, and Bábolna Takármányipari Kft (operating as Tendre Takármányipari Kft from 2007). Tendre is the only domestic company, although the three leading players operate significant production facilities in Hungary.

New distribution channels emerging

As demand becomes more mature, the distribution of pet food and pet care products is also changing. From the mid-1990s supermarkets/hypermarkets played an increasingly important role in the distribution of pet food and pet care products. Supermarkets/hypermarkets emerged as the leading distribution channel before the review period, and it has continued to gain shares from the traditional distribution channel, pet shops. In 2002 a new channel, pet superstores, emerged in Hungary, and quickly gained shares from other distribution formats.

Large pet population offers strong growth opportunities

Hungary has a significant pet population, although the use of prepared food was fairly low in 2007. The perception of pets has to significantly change in order for leading players to realise this growth potential. This key change is projected to occur over the long term. Demographic trends, higher disposable incomes and changing lifestyles offer pet food and pet care products the opportunity to expand dynamically over the forecast period.