Heavy investment in the pet care industry
The Argentinian economy struggled in 2012. GDP grew by only 2% while investment fell by 7%. Despite these figures, the pet care industry faced no major threats. In 2012, there was strong investment from companies to expand their production capacities due to large growth in demand. Among the major companies that invested, the multinationals Nestlé Argentina and Royal Canin Argentina stood out, while among domestic firms, Grupo Pilar and ACA Asociación de Cooperativas Argentinas featured.
Government limits the prices of pet care products
Since 2007, Argentina has been among the countries with the highest inflation rate in the world. The government has not seriously tackled the country’s economic difficulties and implements price control policies that do not solve its structural problems. In 2012, the government set maximum annual increases based on categories that were classified as popular, intermediate and premium. Popular brands have a maximum price increase per year set well below those within the intermediate and premium categories. Consequently, various brands are sold with a very low profit margin and this generates an extensive distortion in the relative prices of products.
National companies gain value share
The remarkable dynamism of the pet care industry in Argentina attracted many investors. Given a demand that seems to be only limited by supply, several national companies decided to venture into the pet food industry. Therefore, during the review period, many domestically-financed companies began to participate in pet care at the expense of multinational companies. Among the most important new companies that stand out are Petfood Saladillo, which was founded in 2010 and based at a former Nestlé Argentina plant. While domestic companies in 2003 represented only a 21% value share of pet care, in 2012, this figure increased to 31%.
Veterinary clinics boost sales
The value share of veterinary clinics registered significant growth within both pet food and pet care in 2012. The humanisation of pets encourages owners to be more assiduous with their pets in relation to check-ups and vaccinations at veterinary clinics, creating higher demand for pet care and pet food products. Despite the strong performance of this channel observed in 2012, according to industry sources, the potential of this channel is still large, since most veterinary clinics that are located in the interior of the country do not promote pet food products.
Healthy outlook for pet care
Pet care and pet food products are expected to continue to register growth in both volume and constant value terms over the forecast period given the large potential of sales in Argentina; however, this growth is expected to be much slower than the equivalent figures over the review period, as a result of slower growth in the overall economy. According to the International Monetary Fund (IMF), over the review period, the economy grew by an average of 5% per year, and a figure of 4% is expected over the forecast period, but consumption inertia of pet care products will likely be above mentioned figures for overall economy.
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The Pet Care in Argentina market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Pet Care in Argentina?
- What are the major brands in Argentina?
- How did the downturn affect pet care spending?
- Which is the best-performing category within pet care?
- Which is the fastest-growing pet food manufacturer?
- How have pet specialists fared in recent years?
- What are growth prospects for pet care in the next 5 years?
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This industry report originates from Passport, our Pet Care market research database.