In September, Previtep held the 21st edition of its namesake Semana Previtep event in the city of Tepatitlán, Jalisco, Mexico. Tepa – as locals call the city – along with other surrounding cities, headquarter several pet food producers in Mexico.
Previtep is a 40-year-old group providing services and products to the pet food and animal feed industries, including vitamins, additives and premixes. Companies that focus on the production of raw materials and ingredients are increasingly interested in providing information to pet food producers regarding market trends and ingredients.
Furthermore, like other established companies in Latin America, Previtep jumped into the pet food arena several years ago, taking advantage of its know-how, a nurtured network of suppliers and robust infrastructure. The company started in the pet food business manufacturing for third parties; then, just a few months ago, it launched its commercial brand, Vitacan. For this reason, Previtep included in the Semana event a full day of training in pet food topics.
One key takeaway from the Semana Previtep event that resonated is the increasing opportunities the local market offers in terms of further regional and channel segmentation. Although the modern and the traditional channels dominate, pet food markets in Latin America are multichannel and multiformat. For instance, numerous, unknown smaller-scale neighborhood distributors are emerging as the new direct sales channel.
In this regard, despite booming e-commerce sales, there is a technological barrier in the region, associated with the high use of cash and the low use of electronic payment means. Our data suggest that the threshold for e-commerce pet food sales is around 5% of total volume sales within the next five years.
Thus, e-commerce may become merely a secondary channel for large companies. On the other hand, online sales would indeed represent a primary source of sales for smaller companies.
Companies with a long-standing presence in the industry, such as Previtep, are being well-received in the pet food environment, as they possess invaluable knowledge and have built a positive reputation. Moreover, emerging companies have channel alternatives to exploit in the future.
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).
By Lindsay Beaton
This country is straddling the line between developing and developed as more of its citizens see the value in pet ownership.
By Lindsay Beaton