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on June 13, 2007

Good growth

Stimuli and deterrents to global petfood sales

Growth in dog and cat food sales is expected to be especially strong in Eastern Europe. ­ T.Phillips

Per Euromonitor International, global sales of dog and cat foods will grow from US$42 billion to US$48 billion. This will happen over the period from 2005 to 2010. Following are some of the stimuli and deterrents to growth.

Stimuli to growth

  1. Continued growth of single household families and declining birth rates in major developed markets are increasing the popularity of pets for companionship.
  2. A key growth stimulus has been the emerging Asia-Pacific markets, most notably South Korea and China.
  3. Increased pet health awareness has driven sales of functional petfoods claiming to aid joint health, coat and skin health, oral health and support of the immune system. Organic and "natural" products have also benefited.
  4. Demand for convenient petfood.
  5. Increased penetration of multi-national manufacturers has spurred growth in Eastern Europe, Russia, Mexico and South Korea.
  6. Increasing segmentation of the petfood market (by lifestage, breed, pet size and activity level) also spurred sales growth.
  7. Increased distribution of superpremium dog and cat food through supermarkets.
  8. Packaging innovations, such as single-serve pouches for wet petfoods.
  9. Western European growth has been enhanced by the strengthening of the euro against the US dollar.

Growth deterrents

  1. The continuing sluggish performance of the US economy.
  2. The maturity of both Western European and North American petfood markets.
  3. Falling birth rates in major petfood markets.
  4. The trend towards smaller dogs due to increased urbanization and increased pressure on living space.
  5. In many developing markets, low consumer affluence, inefficient distribution networks and consumer skepticism of the benefits of manufactured petfoods, were all obstacles to growth.
  6. Expanding private-label penetration.

Robust expansion

Growth in dog and cat food sales is expected to be especially strong in Eastern Europe, as Poland, the Czech Republic and Hungary will benefit from membership in the EU. The least developed regions in petfood, such as Africa and the Middle East, are expected to experience the strongest constant value growth between 2006 and 2010.

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