Tough business environment limits expansion of pet care in 2014
Venezuela´s economic prospects for 2014 will show little improvement and more exacerbated inflation with the real disposable income of Venezuelans expected to continue decreasing in real terms. Moreover, a limited allocation of foreign exchange reserves will continue to preclude domestic manufacturers and importers from maintaining a steady offering of products, with some product categories set to experience massive shortages in 2014. Local producers have already reported a fall in production levels due to insufficient raw materials, specifically corn gluten. Under such circumstances, the pet care industry as a whole will see limited possibilities for expansion in spite of increasing pet populations and pet humanisation trends, indicating that most product categories still have enough room to expand.
High price increases continue to lead the way in pet food
Dealing with a limited allocation of foreign currency to import raw materials and finished products, manufacturers have not been able to avoid passing cost increases on to consumers; as a result, pet products and pet food recorded severe price increases above the annual rate of inflation in 2013 and will do again in 2014. Moreover, the modification of the exchange rate control system at the beginning of 2014 by the Venezuelan government in order to create a new scheme of bands will result in a partial devaluation of the local currency.
Importers lose ground in pet food due to a limited product offering
Firms purely dedicated to the importation of pet food and pet products have been the most adversely affected by import obstacles and the limited allocation of foreign exchange reserves. Otherwise, companies with manufacturing capabilities in the country have been more able to maintain a steady supply of products despite the fact that some key raw materials are also imported. The hostile business environment in Venezuela precluded new companies entering the pet care market in 2013 with most domestic competitors maintaining their competitive position.
Pet shops and pet superstores lose differentiation as a result of a limited offering of premium brands
Pet shops and pet superstores previously had been able to attract consumers through their unique offering of premium dog and cat food, such as imported brands Hill´s Science Diet, ANF, Nutrience and Royal Canine. Nonetheless, as importers have been unable to maintain a steady supply of products, pet shops do not have the ability to offer specialised premium food. Instead their offering has narrowed to be similar to that of supermarkets.
A growing pet population supports favourable growth in the pet care market
A favourable growth rate in the pet population, with new pets being adopted, is projected to support a healthy growth rate in pet food over the forecast period. The increasing participation of non-profit organisations in the creation of a more solid framework of animal protection and welfare is likely to have a favourable effect on the way pets are perceived, not only as pure pets but also as family members. In this regard, pet humanisation trends will continue to grow in importance, thus opening up opportunities for companies involved in pet care.
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The Pet Care in Venezuela 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 Venezuela?
- What are the major brands in Venezuela?
- 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.