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Where to Play: Pet Care Sustainability Index

5/3/2022
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While we introduced the growth of the sustainability trend in ingredients and packaging in pet food in previous articles, this is not happening to the same extent across all countries.

To identify the most important markets for sustainability in pet care, Euromonitor International’s Pet Care Sustainability Index uses three indicator types to measure market potential. These are:

Market conditions

Euromonitor International’s Product Claims & Positioning database is used to gauge the current landscape for sustainability claims in each pet care market. This database extracts e-commerce data from 1,500 retailers in nearly 40 markets, allowing us to understand how prevalent sustainability claims are, and how many brands are making such claims today in each market.

Consumer behaviour

Euromonitor’s Voice of the Consumer Lifestyles Survey is used to measure green habits and trust in green labels among pet owners across markets. To measure the current potential, the index uses an average of reported social and environmental activities of pet owners, such as using sustainable packaging, or buying products and services from purpose-driven brands/companies. To gauge the future potential, pet owners’ average reported trust across green labels, such as organic, recyclable or locally sourced, and the value placed on sustainability, such as worrying about climate change, is also used.

Green macroenvironment:

Euromonitor’s Environmental Sustainability Index is used measure the environmental performance and understand the potential risks and opportunities for green businesses within the country. This index is a dynamic quantitative benchmarking model constructed from six core issues: Resilience, Forest and Biodiversity, Pollution, Energy, Water and Food, in order to assess and rank countries according to environmental behaviour/ performance.

To combine the three sources into a single index, each score is converted to a common scale of 0-100 (the top market scoring 100). These scores are averaged to create a combined total score for 30 countries where all these three indicators are available.

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North America, Australasia and Western Europe lead sustainability in pet care 

The US scores as the leading frontier, followed by Australasian and Western European countries. Whilst Western Europe tends to lead the world in sustainability more broadly, thanks to its green macroenvironment, innovations in the pet care industry still tend to stem from the US, given the market’s sheer size and scale. With sustainable claims already being relatively prevalent in these regions, it is almost necessary to have sustainable claims in order to survive the gruelling competition.

Pet Care Overall Sustainability Index, Top 15 Countries

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Source: Euromonitor International

White spaces: High potential markets with low penetration rates

While emerging markets are by far the weakest in the total ranking according to this index, a constituent part of this index, consumer behaviour, can help identify potential white spaces for sustainability growth in pet care. Thailand, for instance, ranks in the bottom four in the total ranking, but it ranks second in “Consumer behaviour”, signalling that pet owners find green labels trustworthy or are already taking environmental or social actions. Alternative protein especially is gaining strong attention in the country, with a great deal of innovation and investment seen in this area, such as Orgafeed, a start-up which offers Laika, insect protein dog treats, securing Thai Union funding. Similarly, Chile boasts an interesting score in consumer behaviour, ranking fifth out of 30 countries. In response to high consumer awareness, sustainable pet care brands such as Circular Pet, an insect protein dog food brand, are emerging.

Also, green macroenvironment can identify the markets that are actively investing in sustainability as a priority. For instance, South Korea leads organic farming in Asia Pacific to rank ninth in green macroenvironment. While product availability in pet care is still limited, South Korea-based organic pet food brand Natural Core is rapidly growing, also expanding its distribution to other Asian markets, such as Malaysia. In these markets, pet care might need to catch up with green trends, as pet owners’ demand for green products may be well ahead of product availability.

Pet Care Overall Sustainability Index Bottom 15 Countries

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Source: Euromonitor International

Looking ahead

Our proprietary index finds North America, Australasia and Western Europe to be the ideal target markets for sustainability in pet care, given their role as global leaders in this space, as well as dynamic prospects for pet care value sales. Emerging markets, such as Asian countries and Latin America, are also potential white spaces for growth in sustainability, with consumers having relatively high awareness. While the high prices of many sustainable products currently make conscious consumerism difficult to practice in these countries, by focusing on affordability, pet care brands can significantly expand the market potential for sustainable products.

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