Confusion about the value size of the Mexican pet food market is an issue, as some industry players believe the market is worth just MXN 30,000 million (US$1.532 billion). Yet, market research sources state the pet food market is worth US$2.7 billion. Both estimations are likely mistaken.
Press sources usually publish market figures quoting other press sources, yet there is never a supporting methodology of estimation behind them. Such ample biases are attributable to poor market research.
One of the problems arising from disseminating inaccurate figures is that potential investors in the pet food industry make suboptimal decisions using such information.
There is a method for how to measure any market, including pet food. The process of sizing is not a guess but a series of estimation steps, including assumptions and actual data. Some data are known while others are not. Therefore, the market value size turns out to be an equation with known parameters and a few unknown variables.
The first step is identifying and selecting the known variables as well as the unknown ones. As for the pet food market in Mexico, the pet population is unknown. Yet, the production volume or apparent consumption is known, or at least it can be partially estimated. Lastly, consumer prices are fully known and visible, as anyone can see them on supermarket shelves. However, to estimate accurate consumer price parameters, researchers must be keen.
The next step is segmenting the subcategories comprising the entire pet food market, such as dry, wet and treats for dogs and cats. Should the researcher know the actual volumes consumed by each segment, it is simple to estimate the total market value size as the sum of the subcategories.
Triplethree International estimates the entire Mexican pet food market value is MXN 118,000 million (about US$6.065 billion) in 2022 at current prices. This value includes pet food for dogs, cats and other species.
As an example, to estimate the dog food market size in current value terms, one must sum the three price segments—economy, standard-priced and premium—in dry and wet food, plus treats, multiplied by their respective average prices. In this example, the sum of dry dog food (61,213 million pesos), plus wet dog food (16,523 million pesos), plus treats (4,509 million pesos) leads to the total market size of dog food of 82,245 million pesos (US$4.2 billion), in terms of end-of-year estimates.
It is important to note that the market size should be presented as point-of-sale or consumer prices and in current terms. Mark-up gains and constant price value can be calculated later.
Iván Franco is the founder of Triplethree International and has collaborated on hundreds of research projects for several consumer goods industries. He was granted the Global Consultant of the Year award by Euromonitor International and authored the book 17 Market Strategies for Growth (in Spanish).
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