Wholesale pet food is a sizable channel in Mexico that continues registering dynamic growth every year. It is worth analyzing its current size, impact and opportunities for improvement.
According to the National Association of Grocery Wholesalers of Mexico (ANIM), pet food products represented just 3.7% of the national wholesale grocery value sales in 2019. Yet press sources stated that wholesalers registered sales of pet food of 7.719 million pesos (US$346.2 million) in 2019. Wholesale pet food sales represent 45% of the national pet food market in Mexican retail sales, according to those sources.
However, this figure is likely overestimated or outdated, as other, more modern channels have larger shares of national pet food sales now. More precisely, pet food wholesale sales represent approximately one-third of the national pet food market in volume terms, while the rest is split among other channels, including supermarkets.
The wholesale grocery channel in Mexico is comprised of numerous small and large wholesale companies that distribute groceries and pet food to nearly 623,000 independent mom-and-pop stores nationwide. Because of this national reach, many pet food manufacturers rely on the wholesale channel to increase their presence nationwide, gaining thousands of additional points of sale that are unattainable without the intermediation of wholesalers.
Another advantageous feature is regionalization. This means wholesalers in the south of the country offer different pet food brands from ones in the center or the north, leaving room for local pet food brands to compete in the traditional channel.
A limitation of the traditional wholesale channel is the lack of sales space available for pet food products. Most mom-and-pop stores in Mexico can offer no more than five pet food brands simultaneously, due to reduced shelf space. Indeed, thousands of mom-and-pop stores in Mexico display their array of pet food outside of the store, using a bit of the street space to sell their products during business hours.
As the traditional mom-and-pop stores are located in middle- and lower-income areas of Mexico, the wholesale channel offers mainly economy and standard-priced pet food products, another limitation for some pet food manufacturers.
Still, the wholesale channel is essential to the Mexican pet food industry. Its vigorous value growth is a good indication that the pet food market is still expanding in mom-and-pop stores throughout the country.
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