PET CARE ANNUAL UPDATE - PIJAC Canada · Asia Pacific Australasia ... Internet Retailing Home and...

PET CARE ANNUAL UPDATE:TRENDS AND GROWTH OPPORTUNITIES

JARED KOERTEN

SENIOR ANALYST

PIJAC, TORONTO, SEPTEMBER 21, 2015

2INTRODUCTION

Euromonitor International

© Euromonitor International

GLOBAL OVERVIEWNORTH AMERICA: GROWTH CONTINUES

PREMIUM PRODUCTS LEAD THE WAY

THE FUTURE

4

$20

$0

Pet Food

$40


$60

Global Spending on Pet Care: 2010-2015

$120

$100

$80

Pet Products

2010 2011 2012 2013 2014 2015 (p)

Sale

s(U

S$,b

n,Fi

xed

E-R

)GLOBAL OVERVIEW

A Large and Growing Market

5GLOBAL OVERVIEW

North America Leads the Way


6

Asia Pacific

Australasia

Eastern Europe

Pet Care: Per Household Sales and Growth, 2010-1518%

16%Latin America

14%

12%

Middle East & Africa

North America

Western Europe

0%

2%

4%

6%

8%

10%

$0 $50 $100 $150 $200

Per Household Sales, 2014

$250 $300 $350

CA

GR

,201

0-15

GLOBAL OVERVIEW

Growth Continues Across All Regions


7

NoviPet Magic Treats by BioPet Ltd Dog TreatsSingapore, 2015

Fortified with DHA, Omega 6 and Multivitamins, Omega 3, Prebiotics or Glucosamine

Available in blister and strip packs to maximize freshness

GLOBAL OVERVIEW

New Product Trends: Fortified Foods for Better Health

Finikee by Bharat International Pet Foods Premium Wet Cat FoodIndia, 2014

Fortified with Taurine (amino acid) to aid with heart health, muscle function and allergy control

Artistic packaging, modern design

Gourmet flavors


8

Milk-Bone Brushing Chews by Big Heart Pet Brands Dog TreatsUSA, 2014

Helps clean teeth while chewed

Veterinary Oral Health Council’s (VOHC) seal of approval

Packaging looks like premium toothpaste

Petys Paños húmedos para perros by Familia SA Pet WipesColombia, 2015

Portable way to clean your pet

Value with refill pouches

Stand-up pouch packaging to maximize visibility and shelf-space

GLOBAL OVERVIEW

New Product Trends: Improved Hygiene


9

Dreamies by Mars Japan Ltd Cat TreatsJapan, 2014

Two-layers: cream covered with a crispy layer for better taste

Like Whiskas Temptations in the US; appeal as a foreign brand

Purina Dog Chow Abrazzos Integral Snaps by Nestlé Dog TreatsMexico, 2014

Made with whole wheat flour

Baked – reduced fat content

Fortified with essential vitamins and minerals

GLOBAL OVERVIEW

New Product Trends: Snacking




THE FUTURE

11NORTH AMERICA: GROWTH CONTINUES

Values over Volumes

Canada - Volume2%

USA - Value1%

USA - Volume0%

-1%

-2%

3%

North American Pet Food Growth: 2010-146%

5%

4%

2010-11 2011-12 2012-13 2013-14

Canada - Value

12

0

20

40

60

80

100

120

140

160

180

2010 2011 2012 2013 2014 2015

Popu

lati

on(i

nm

illio

ns)

North American Dog and Cat Population: 2010-15

USA Canada

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Shar

eof

Tot

alPo

pula

tion

Dogs in North America by Size: 2010-15

Large Dogs (Over 23 kg)

Medium Dogs (9 to 23 kg)

Small Dogs (up to 9 kg)

NORTH AMERICA: GROWTH CONTINUES

Weak Population Growth Hurts Volumes


Growth: A Story of Premiumisation

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

0

100

200

300

400

500

600

700

800

900

1,000

Economy Mid-Priced Premium

2010 2012 2014 CAGR 2010-14

CAG

R,2

010-

14

Sale

sin

CAD

(Mil)

Canada: Dog and Cat Food by Price Tier, 2010-14

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Economy Mid-Priced Premium

2010 2012 2014 CAGR 2010-14

CAG

R,2

010-

14

Sale

sin

USD

(Mil)

USA: Dog and Cat Food by Price Tier, 2010-14


Canada Continues to Grow

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

200

400

600

800

1000

1200

Dog Food Cat Food Other Pet Food

Cat Litter Pet Pet Dietary Healthcare Supplements

CAGR 2010-14

Other Pet Products

CAG

R, 2

010-

14

Sal

esin

CA

D (M

il)

Canada: Pet Care Spending by Category, 2010-14

2010 2012 2014



THE FUTURE

16PREMIUM PRODUCTS LEAD THE WAY

New Products in Canada Go Upscale

Caru Naturals Stews by Caru Pet FoodPremium Wet Dog Food Launched June 2014

Resembles a stew that humans would eat: instantly-recognizable ingredients

Premium packaging: Recyclable Cartons; BPA-Free

All-Natural Formulation: No Artificial Colors, Flavors or Preservatives

Grain-Free, Gluten-Free, Soy-Free, No Animal By-Products

Fromm Four Star Beef Liva‘ttini Veg by Fromm Family FoodsPremium Dry Cat Food Launched April 2014

Grain-Free Recipe featuring beef liver, eggs, cheese, tomato, spinach, eggplant, zucchini

Premium packaging: Stand-Up pouch designed with fancy colors

Part of the company’s “Four Star Nutritionals” line

“An Italian Experience You Won’t Soon Forget”

“Pairs well with Chicken Duck and Salmon Pâté”


Foodie Trends Come to Pet Food


Premium Manufacturers Gain Share

Canada: Dog & Cat Food Share by Company, 2009-14

30.8 30.3

22.4 26.9

7.1

9.98.1

3.53.6

2.84.5

12.02.5

3.4

11.5

9.0 11.7

10%

0%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2014

Val

ue S

hare

Others

Private Label

Blue Buffalo Co Ltd

Champion Petfoods LP

Colgate-Palmolive Co

Big Heart Pet Brands

Procter & Gamble

Mars Inc*

Nestlé SA


*Note: Mars acquired Procter & Gamble’s Pet Business in April 2014

19

19.3 19.5

23.1 18.8

8.06.0

6.3

6.4

20.123.1

6.15.6

4.8 6.5

5.91.3 3.3

5.95.1 4.9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2014

Val

ue S

hare


Specialty Channels Excel

North America: Pet Food Share by Channel, 2009-14

Others

Veterinary clinics

Internet Retailing

Home and Garden

Pet shops

Pet superstores

Warehouse Clubs

Mass Merchandisers

Supermarkets

Hypermarkets




THE FUTURE

21THE FUTURE

Pet Growth Expected to Continue

22THE FUTURE

A Strong Outlook for the Canadian Market

-1.0%

0.0%

1,0003.0%

8002.0%

600

1.0%400

4.0%

5.0%

0

200

1,200

1,400

Dog Food Cat Food Other Pet Food

Cat Litter Pet Healthcare

Pet Dietary Supplements

Other Pet Products

CAG

R, 2

015-

20

Canada: Forecast Pet Spending by Category, 2015-2020

2015 2020 CAGR 2015-20

23

Global

• The global pet care market stands out for its consistent growth• Most regions trail North America by a wide margin - strong potential• Humanisation trends are evident worldwide – becoming a global trend

North America

• Stagnant pet populations and smaller breeds limiting volume growth• Value sales growing as consumers shift from economy to higher-end• The relatively smaller pet products market is booming in Canada

Canada

• New premium products driving growth with significant implications for the competitive landscape, retail environment and company strategy

• Strong growth is expected from premium foods and pet products• Manufacturers must find ways to appeal to a new generation of pet parents

THE FUTURE

Conclusion

24

THANK YOU FOR LISTENINGJared Koerten

Senior Analyst

[email protected]

Euromonitor Chicago

224 S. Michigan Ave, 15th fl Chicago, IL 60604

PET CARE ANNUAL UPDATE - PIJAC Canada · Asia Pacific Australasia ... Internet Retailing Home and...

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