Pet owners still spend on their pets, but more cautiously
Generally consumers cut back on spending and focused more on paying back loans and saving more for rainy days, but pet owners are still committed and dedicated to taking care of and providing the best for their pets, resulting in higher sales across all major segments. The total pet care market saw an increase over the review period, despite more consumers switching to cheaper private label products and constantly looking for promotions with heavy price cuts on their preferred brands. Retailers attract pet owners with more innovative products and a wider assortment of economy products, since pet food is among the few categories with constant growth in terms of both volume and value.
Private label products further expand
Retailers realised the high potential in pet food and widened their product ranges. They are not limiting their assortment to price leader products only, but organic ranges and gourmet meals have also appeared on their shelves. Meanwhile, as pet superstores build their product range on expertise and commitment to pets, grocery retailers focus on delivering high value meals at rock bottom prices. Parapharmacy and drugstore chains, like Dm-Drogerie Markt and Rossmann, allocate more shelf space to pet food brands, demonstrating the importance of the category.
Innovation is fuelled by international players
International manufacturers, like Mars and Nestlé, fuel the market value growth by launching and promoting innovative products, targeting smaller consumer segments in cat and dog food. Specialist products for puppies and kittens, or gourmet meals with new taste experiences, are among the key novelties. The recent launch of Softmix dog food and Prevital cat food from Partner in Pet Food, the largest producer of private label products, created a new platform with quality branded products in mid-priced pet food. International retailers, like Fressnapf, are also active in product innovation, widening organic pet food ranges and novelties without artificial colourings and preservatives. Local manufacturers mostly focus on value offerings and lack significant marketing support for their products.
Internet retailing – pet owners started to click on “buy” button
Currently, hypermarkets take over a third of total pet care sales and pet shops with supermarkets grab an additional third of the market, but customers started to buy pet food through internet retailing as well. In addition to the convenience of home delivery, the lower price offered by internet retailers turned customers into avid online buyers. Internet retailing is especially popular in the case of premium dry dog food and bulk shopping of other food products where transportation is expensive, or time consuming. Since Hungary has the highest VAT rate, of 27%, in the European Union, internet retailers in foreign countries, like Poland, Germany, or Slovakia charging lower VAT, offer their products at a more competitive price compared to their Hungarian counterparts and often outsell local internet retailers.
Uncertainty expected during the forecast period
Additional to general uncertainty brought by global recession, Hungarian pet food manufacturers should take into account more factors when it comes to predicting their business performance. Rising meat prices, more rigorous regulations on food safety and labelling will have a negative impact on pricing and manufacturers will struggle to keep manufacturing costs low. Retailers are also under pressure from the government, with extra taxes on retailers, increased VAT and higher transportation costs. All these factors will lead to a market with higher unit prices and it is still unclear how consumers will react to pet ownership being more expensive.
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Discover the latest market trends and uncover sources of future market growth for the Pet Care industry in Hungary with research from Euromonitor's team of in-country analysts.
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If you're in the Pet Care industry in Hungary, our research will save you time and money while empowering you to make informed, profitable decisions.
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The Pet Care in Hungary 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 Hungary?
- What are the major brands in Hungary?
- 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?
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and supply functions
This industry report originates from Passport, our Pet Care market research database.