Where Will Growth Come From? Emerging Markets in Pet Care

Strategy Briefing

About This Report

Nov 2014

A swelling urban middle class has proven to be fertile soil for pet care sales in emerging markets over recent years, with pet ownership increasingly as local consumers become more Westernised. While an economic slowdown in Brazil and Russia and unrest in Ukraine threatens to hamper pet care sales, there is still considerable scope for growth in markets such as China and India, or smaller ones like Peru and Poland.

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Where Will Growth Come From? Emerging Markets in Pet Care

Enlarged Middle Class in the Vanguard of Pet Care Market Growth

Strong income growth has helped to fuel the development of a much broader middle class in emerging markets, with Brazil now the world’s third-largest pet care market, behind the USA and the UK.

Wide Variation in Ownership Rates

Pet ownership rates are among the highest in the world in some Latin American and Eastern European markets. On the other hand, cultural factors have helped to keep rates of dog ownership very low in many Muslim markets.

Urbanisation a Key Driver of Pet Pampering

Emerging markets are urbanising and westernising, shifting attitudes towards pets. More owners are now willing to indulge their pets, boosting value sales in the pet care market, particularly in the dog and cat food segment.

Other Pet Products Shine in China

Demand for other pet products (such as pet toys and clothing) remains very limited in many emerging markets, with the notable exceptions of China and, to a lesser extent, Brazil.

Digging: Deeper in Search of Growth

The spread of modern retail formats like supermarkets and hypermarkets beyond tier-one cities like Beijing and St. Petersburg to tier-two and tier-three cities is helping to make prepared pet food more accessible to consumers.

Looking Beyond the BRICs

Among the BRIC markets (Brazil, Russia, India and China), the relatively underdeveloped Indian market offers the brightest growth prospects. Such markets as Peru, Kenya and Pakistan also have longer-term growth potential.

Growth Slowdown Could Undermine Future Growth

The major downside risks to future growth in pet care sales in emerging markets are a slowdown in economic growth (especially in Russia) and, to a lesser extent, inflationary pressure (particularly in Latin America).

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
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  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key Findings

Overview

Where is growth coming from?
The rise of emerging markets
…driving global pet care sales
Dogs and cats i ncreasingly p opular in (some) e merging m arkets
The Prepared Gap Narrows
Pet services increasingly popular

Market Drivers

A rising tide of affluence
Urbanisation goes hand-in-hand w ith s hifting c onsumer a ttitudes
Shifting life c ycles and shrinking f amilies
Westernisation goes v iral

Asia Pacific

Staggered development in Asia Pacific
Pet products p lay a key r ole in China
Sales of Premium Products Boom in China
India Unleashed
Urbanisation, Low Fertility and Income Growth in Thailand
Successful strategies

Latin America

The rise of Latin American middle class
Increased equality and economic g rowth a p otent m ix in Brazil
Brazil now the world’s second-largest d og f ood m arket
Imposition of VAT fails to derail g rowth in Mexico
Argentina’s inflationary conundrum

Eastern Europe

Pet care r ides w ider c onsumption b oom in Russia
Cat food r ules the roost in Russia
Migration wave a boon for Polish pet c are
Urban-rural d ivide c learly v isible in the Czech Republic

Middle East and Africa

South Africa and Israel dominate Middle East and Africa s ales
Growth restrained by low r ates of pet o wnership
Challenges in South African pet care
A dog’s l ife in the United Arab Emirates
Economy products d rive g rowth in Turkey

Outlook

BRIC economic s lowdown to drag d own g rowth in pet c are?
Inflationary squeeze in prospect?
Shifting attitudes t o p ets a mong g overnments and consumers
Strong growth in emerging markets overtakes developed
Billion-dollar g rowth in Brazil, Mexico and Russia
Digging deeper for growth in Peru
Opportunity knocks in Sub Saharan Africa
Significant long-term p otential in Pakistan
Growth in demand for pet t oys and clothing to remain v igorous
O pportunities and challenges

Report Definitions

Report terminology
Product category definitions