Despite the gloomy mood around the economy, pet care records positive growth
Pet care was able to grow in 2014 both volume and value terms as manufacturers and distributors enjoyed persistent demand from Hungarian pet owners. In addition to an increase in the dog and cat population in the country, the penetration of prepared pet food also rose, which helps to maintain constantly strong demand to cover the growing demand for pet food. Manufacturers and distributors, on the other hand, provide strong supply, with more players entering the market, while others also increasingly focus on pet care.
Pet food polarises further as demand moves towards economy and premium
Besides the ever-increasing economy price platform, boosted by the price-sensitivity of many Hungarians, some consumers, especially those who are becoming better off, have started to seek premium quality from the products they buy, even if this meant higher prices. The recent trend of conscious pet ownership and higher awareness of pets’ health and wellness needs is driving many consumers to spend more on their pets, buying more premium products with high quality and additional benefits. This new consumer group generates demand for the more expensive health and wellness and therapeutic products, which until now have suffered from lack of attention due to weak consumer purchasing power.
Private label producers continue to thrive in pet food
Private label products continue to be a success domestically, being the main growth driver of pet food. Mostly positioned in the economy price platform, the range of private label provides an acceptable price level for Hungarian consumers who still refer to price as the most important factor when making purchases of fast-moving consumer goods. Grocery retailers, moreover, are in a good position as many pet owners buy pet food during daily or weekly shopping trips. Hypermarkets and discounters have grown dynamically in terms of category share of pet care sales, edging ever closer to the leading players Mars Magyarország and Nestlé. Drugstores have built up their own private label pet food assortments, putting their own pet food brands on their shelves.
Tax avoidance among internet retailers is highlighted in trade press
Due to the 27% VAT rate in Hungary, which is the highest in Europe, both distributors and manufacturers find it difficult to maintain profitability and provide an acceptable price level for consumers. In response, many internet retailers in Hungary have adopted a somewhat “grey” approach, registering their companies and hosting their websites in neighbouring countries where they can apply a significantly lower VAT rate and provide pet food products at a much lower price level to Hungarian consumers. This tax avoidance deters the supply side of the pet food market, making the market unfair for companies which apply the higher VAT rate. Internet retailing, however, still accounts for 3% of the overall market, although its share is expected to grow dynamically in the forecast period.
Steady growth is expected for the Hungarian pet food market
Despite the weak economic environment and continuous uncertainties of the future performance of the economy, the domestic pet food market is expected to achieve modest but steady growth in the coming years both in volume and value terms. Growth will mainly be driven by the economy price platform, especially the successful private label of the leading retailer chains, offering acceptable prices to price-sensitive Hungarians. The dog and cat population is also expected to sustain modest growth in Hungary, which will lead to a further rise in demand for pet products, especially pet food, while the penetration of prepared food is also expected to increase.
Samples (FAQs about samples):
Sample Pet Care Market Research Report
Sample Pet Care Data
Delivery: Files are delivered directly into your account within a few minutes of purchase.
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.
Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.
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.
When you purchase this report, you also get the data and the content from these category reports in Hungary for free:
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.