Despite French GDP decline, pet care is expected to sustain its growth in 2013
Pet care continued to be dynamic in 2012 and at the beginning of 2013, at least in value terms, despite the increasingly gloomy economic situation. French pet owners seem unconcerned about the effects of the economic downturn when it comes to taking care of their animal companions. In fact, overall value sales of pet care experienced robust growth in 2012, despite an ongoing drop in volumes, which is set to continue worsening during 2013. Despite the less favourable performance of some pet products and small mammal/reptile food being a cause for concern, categories, such as dry premium food, especially therapeutic food and cat food, and cat and dog treats, are expected to post appreciable growth rates in 2013.
Humanisation and premiumisation offset the challenge of a declining pet population
In fact, the bad news for pet care is not the comeback of recession in early 2013 but the ongoing drop in the population of some pets, notably dogs (with the exception of small breeds), birds, fish and even small mammals. Only cats and reptiles continue to widen their territory in French households. However, pet dogs and cats are no longer perceived as domesticated animals, but as life companions. This trend translates into higher demand for specialised products that keep animals healthy and happy. Other than rising unit prices, the ongoing value growth of 2012/2013 stems from consumers’ trading up to premium dry dog and cat food brands. Brands are becoming increasingly segmented by lifestyle, age, size or even breed specific, as illustrated by the impressive success of food for neutered cats or senior dogs. Novelties in pet care often reflect trends that drive sales in human markets, including health and wellness, the need of more convenience and the development of products aimed at more sedentary lifestyles.
Multinationals maintain dominance
Multinational companies, Mars Petcare & Food and Nestlé Purina PetCare and private label lead the way in a rather concentrated competitive landscape. The two global manufacturers have a very strong presence in cat and dog food with brands, such as Whiskas, Frolic and Pedigree, from Mars Petcare & Food, and Gourmet, Friskies and Felix from Nestlé Purina PetCare. The remainder of the competitive environment is fragmented, with value sales divided among specialist manufacturers, such as Royal Canin, Vitakraft, Royal Canin and Hill’s Pet Nutrition.
Grocery retailers dominates but the specialised channel fares better
Brand loyalty is high amongst pet owners who have a preference for brands that can be bought in one shop from grocery stores. Therefore, grocery retailers still led in terms of distribution as of 2012-2013. Nonetheless, French pet owners increasingly appreciate the expertise and specialised advice provided in pet shops, superstores and veterinary clinics. They also increasingly shop at garden centres and online.
Value growth set for a slowdown
The declining pet population – especially dogs and small mammals – as well as the fact that volume sales are declining, should serve to dampen the pet care market in the long run but not to result in a decline in constant value over 2013-2018. The rising tide of pet humanisation in France, which is occurring irrespective of prevailing economic factors, as well as over segmentation, should ensure that pet owners continue to spend money on pet care throughout the forecast period. However, French consumers should still be ready to pay a premium in dog and mainly cat food despite the persisting recession but could become more cautious and selective in less crucial products, notably in pet products.
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