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How Inflation is Impacting Pet Food Products in Europe

11/25/2022
Tommaso Cappato Profile Picture
Tommaso Cappato Bio
Rasa Vaičiūnienė Profile Picture
Rasa Vaičiūnienė Bio
Jared Conway Profile Picture
Jared Conway Bio
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As inflationary pressures are continuing to impact consumers from a variety of perspectives, pet owners in particular are feeling hard hit as pet food suppliers are continuing to raise prices in response to a variety of cost-push and demand-pull drivers. Understanding the degree to which prices and availability are changing within these competitive markets is paramount, considering the competition amongst all suppliers for procuring key commodity costs to reign in prices and provide relief to increasingly frustrated consumers. Using Via, Euromonitor International’s e-commerce tracking tool, online prices and availability for stock keeping units (SKUs) can easily identify trends in the market and provide strategic and tactical recommendations. This piece analyses how pet food categories have performed in European countries to understand:

  • How has the supply of dog and cat food changed in major markets?
  • How have prices faired across categories and countries at a per unit level
  • How do price changes of leading brands and retailers compare?

Retailers and suppliers struggle to maintain online availability of goods in Europe

Availability of Dog and Cat Food Online.pngThe availability of dog and cat food products in Europe has been significantly impacted by supply chain disruptions and increasing competition for commodity goods due to the ongoing war in Ukraine. Online retailers of these goods have struggled to maintain consistent availability during this time, which has placed additional burdens on pet owners who see rising costs for their pet food alongside their own purchases. While the UK, the largest market by pet food sales in Europe by 2021 RSP terms, saw only an 8% decline in the number of available SKUs during the 8-month period of observation, Germany and France have experienced a more challenging environment of product procurement as they are in closer proximity to the war in Ukraine, with these countries’ online markets seeing available SKUs drop by 39% and 35%, respectively.

Poland and Czech Republic have seen an increase in refugees from impacted areas, which has placed additional demand on the pet care supply chain environment. Refugees have brought along companion animals, considering the importance that pets play in supporting refugees’ mental health. As highlighted in the above graph, the online availability in these two countries in particular has, with the added pet populations, left retailers’ online shelves the most reduced. These additional pet populations are another added challenge, as suppliers and retailers deal with supply chain disturbances of both finished products and raw materials sourced from Ukraine and Russia.

France sees highest online increase in pet food prices

Average Online Unit Price of Dog and Cat Food Categories.pngAvailability of goods is a strong driver of price increases. As the majority of markets have experienced a drop in availability, unit prices have drastically risen. Breaking out the individual dog and cat pet food categories reveals the extent of price increases that consumers are experiencing through this 8-month period. Standardising all online SKUs into per 100g units reveals just how much prices are rising across all SKUs and underscores the challenging decisions pet owners are experiencing while shopping for their favourite companions.

By standardising to a per unit comparison, inflationary impact on consumers can be truly observed regardless of how companies and retailers are adjusting pack sizes and types within their portfolios. While the average unit price increases for these seven countries, and the six individual pet food categories being tracked, reached 21%, France experienced the strongest increase in unit prices of all countries with an average rise of 31% for the six cat and dog categories.

France sees the highest increase (31%) in dog and cat food pricesimagee5od4.png

Inflation in these categories has had dire consequences, especially in France, where the animal protection group La Société Protectrice des Animaux (SPA) announced that abandonment levels of dogs are up by 6% this year through to August and that its shelters were completely full. Many pet owners are simply unable to bear the additional costs alongside other expenses and are in turn abandoning animals as well as delaying adoption and rescue plans.

Inflation impact greatly differs by brand and retailer

Unit Price Dog and Cat Food.png

Diving deeper into the impact of inflation on pet care in France can reveal key competitive opportunities for players. On the left hand side of the chart, the average unit price and changes in unit price for each dog and cat food category can be compared to the leading brands to gauge how price increases are faring.

For France, with the exception of wet dog food, the leading player’s unit price increase is similar or lower than the average for the SKUs being trackedimagee5od4.png

This is important for all players to compare and use as a benchmark, as strong unit price increases by leading players present opportunities for other brands to gain ground amongst consumers who are looking to save on costs across all spending. At the same time, leading players need to carefully track cost increases from a variety of perspectives to ensure their price positioning and justification of increasing costs is effectively communicated to consumers.Average online Unit price change.pngBesides comparing brands to average unit price increases, retailers are seeing stark differences in price increases. One key difference is how general retailers compare against pet specialists for price increases. For example, in the above graph, Carrefour saw an average unit price increase across the six dog and cat food categories of 43%, significantly higher than the average of 31%. Meanwhile France’s pet food specialists, such as Animalis, Miscola and Croquetteland, recorded significantly lower average unit price increases for this basket of SKUs, considering the knowledge these retailers have on industry drivers versus more general retailers with regards to introducing product assortment changes to address consumers’ inflationary concerns. Retailers need to closely monitor prices and communicate to their consumers their pricing advantages, supporting pet owners, but especially their pets’ need, in this challenging inflationary environment.

43% rise in dog and cat food prices at CarrefourSource Via EMI Logo

As consumers (and their pets) struggle to adjust to continuing inflationary pressures, monitoring online prices, availability, promotions and ratings for select categories and baskets of goods provides key insights into how price increases are manifesting themselves and how companies can react. While this piece analyses a narrow portion of the European market, Via covers over 2,000 online retailers in 80 countries across 11 consumer goods industries. Learn more about how Via can support businesses and help unlock key strategic and tactical insights with its standardised online product coverage.

Note: Sample based on SKU prices found in Euromonitor International’s e-commerce tracking tool Via with data extracted in November 2022. Please note that due to ongoing improvements to the AI-led product matching of SKUs to categories, supplier, and brands, data and SKU counts can be revised based on system updates. SKU counts used for the analysis from a variety of online retailers by county (UK = 32,102, Germany = 45,339, France = 52,440, Italy = 35,653, Spain = 51,121, Poland = 36,976, Czech Republic = 29,407).

 

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