The size of the Iranian pet food market jumped two times in 2015, to nearly 700 metric tons and US$6 million, according to data from the local organization Persian Pet International (PPI). This trend may continue in 2016, following the lifting of international sanctions against the country over its nuclear program.
“Last year, the market size rose two times, even though we don’t have any major pet food producers in Iran,” said PPI manager Savis Anzani. “The market is almost fully accounted for with import supplies, primarily from Germany and Italy. At the same time, right now the country is not importing US and British pet food products from companies like Mars due to sanctions.” Current pet food market leaders in Iran include Royal Canin, German Bosch-Tiernahrung, Friskies, Turkish Tropical Pet, German Happy Pet, Italian Morando and German Animonda (see Figure 1).
Iran’s international pet food market is currently lacking in US and British brands due to international sanctions. A removal of those sanctions could significantly expand market options.
Within the next several years, international companies may increase supplies of pet food to Iran, as the rising number of pets and consumer shifts to dry pet food become major factors in the market’s growth. “Iran is a very young market for pet food production, as it actually has existed for only 10 years,” said Anzani. “Our citizens are mostly using homemade pet food to feed their animals, while [retail sellers] are trying to urge them to use more dry food.”
Currently, according to Anzani, Iran is an Islamic country with a low number of pets. According to official data, there are only 2 million cats and dogs per 70 million citizens. But that situation is about to change.
“The Iranian market can be considered one of the most promising in the world and, on the verge of lifting sanctions, we see the rise in interest from international companies in their presence here,” said Akbar Sailamy, representative of pet food shop Istgah, in Teheran. “In addition, the number of pets in the country has jumped almost 50% in the last seven years.”
According to PPI data, currently the Iranian market has production in different price segments with quite stable demand. Market leader Royal Canin has one of the most expensive pet food products, at a cost of 80,000 Iranian tomans (US$22.80) per kilogram. The cheapest pet foods amount to 19,000 Iranian tomans (US$5.40 per kilogram).
Representatives of the Industry and Business Ministry of Iran have confirmed the strong rise in pet food production over the last year. Approximate estimates from officials say that, given the current trends, the overall market’s size may jump to a least 2,000 metric tons by 2020 (see Figure 2).
Iran’s pet food market is small, but as with other developing markets in the industry, it’s growing. Current estimates put the market size at 2,000 metric tons by 2020.
With the lifting of sanctions in 2016, the Iranian market may get its first supplies of Eukanuba, Hills, Mars and other US and British pet food brands, but market participants say their prospects should be considered carefully. Because of citizens’ patriotism, most consumers are not ready to welcome American products on their grocery shelves.
Further market growth: The Middle East
According to an October 2015 Reportbuyer analysis of the Middle East pet food market, stable growth can be expected through 2020.
“Demand for pets for companionship is rising due to the growing trend towards the nuclear family,” says the report. “This, in turn, has significantly boosted demand for pet food in the region. Furthermore, increasing awareness among people regarding the health of pets is anticipated to fuel demand for pet food in Middle East.”
Dry dog food holds the majority share of the developing market, due to ease of handling and lower pricing, says the report. And in terms of trends within pet food overall, those products seen as healthier and more nutritious are the fastest-growing segment. “As people are getting more attached to their pets, they are becoming much more cautious about their pets’ nutrition,” says Reportbuyer, suggesting that even in the developing markets, pet humanization is a driving force for growth.
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