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Lee linthicumpetfood forum2010
 

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  • 1. A brief background about Euromonitor International and what we do. 1.1 We are a trusted business intelligence source to many of the top companies around the world. 1.2 Our expertise are in consumer markets, for e.g Food and Drinks, Cosmetics and Toiletries, to Travel and Tourism.
  • 1. This chart shows the global performance of various categories in the pet food and pet care products. 1.1 For the horizontal axis, it shows the average annual growth in the last 5 years. 1.2 For the vertical axis, it shows the average annual growth in the next 5 years. 1.3 The bubble size represents the market value in 2008 2. The categories are divided into 2 zones. 2.1 We have the low opportunity zone. For example, the orange bubble in the middle of the low opportunity zone represents the economy cat food. 2.1.1 In terms of performance, economy cat food has been growing by 2.8% every year for the last 5 years. 2.1.2 It is expected to grow by 1% every year in the next 5 years. 2.2 In the high opportunity zone, they are typically high-value categories (for example, premium dog and cat food). 2.2.1 The grey bubble right represents the premium dog food. 2.2.2 It has been growing at almost 8% every year for the last 5 years 2.2.3 For the next five years, it is expected to be the most dynamic category, growing at between 5-6% every year. 2.3 Despite the relative growth of economy and mid-priced segments, they are very important in developing markets. BUT, as time evolves, consumers will be more sophisticated, and they will demand higher value products. 2.4 So in the later part of the presentation, we will look at how manufacturers respond to the demand for premium pet food/pet care products
  • Distribution The global pet food and pet care products market is currently riding a strong wave of growth, especially in emerging markets. Manufacturers need to build on this momentum and leverage strong word-of-word recommendations through specialist channels, particularly for premium offerings. For economy and mid-priced offerings, maximization of distribution through emerging outlets such as pet superstores will be crucial going forward. Product Segmentation Strong investment in health and wellness pet food will be very important over the medium to long term as pet humanisation is set to become more prominent. Segmentation by specific age, breed and lifestyle continues to present the most significant value-enhancing potential. However, organic and fortified pet food and beverages are fast-growing niche categories in numerous developed markets. Marketing Low prepared gap ratios in emerging markets presents huge opportunities for manufacturers to encourage pet owners to trade up to more convenient prepared pet food, through initiatives such as providing consumer education on the benefits of prepared pet food and making pet food widely available in first and second-tier cities targeting relatively rich urban dwellers. Packaging Going forward, more upscale packaging in the form of plastic pouches and those very similar to human-style containers are set to become even more popular as the premiumisation trend intensifies across all aspects of a product. Specifically, r esealable products are likely to gain in popularity in the medium and long term, especially for consumers preferring to buy in bulk and desiring a convenient solution to storing the product better and for longer after opening. Going forward, more upscale packaging in the form of plastic pouches and those very similar to human-style containers are set to become even more popular as the premiumisation trend intensifies across all aspects of a product. Specifically, r esealable products are likely to gain in popularity in the medium and long term, especially for consumers preferring to buy in bulk and desiring a convenient solution to storing the product better and for longer after opening.

Lee linthicumpetfood forum2010 Lee linthicumpetfood forum2010 Presentation Transcript

  • Health and Wellness Opportunities in Global Pet Care Lee Linthicum 14 April 2010
  • About Euromonitor International
    • A trusted business intelligence source
    • Helping clients make informed decisions
    • Consumer-focused: industries, countries, consumers
    • Subscription services and custom research
    • 600 analysts in 80 countries
    • Regional research hubs
    • Industry specialist client support teams
    Custom research Passport
  • Global Market Overview Key Trends and Market Drivers Health & Wellness Opportunities Future Outlook and Strategic Recommendations Q&A
  • Global Market Overview Euromonitor International Global Pet Care Coverage SEGMENTS COVERED: Dog food Cat food Bird food Fish food Small mammal/reptile food Cat litter Healthcare Dietary supplements Other pet care products CONSUMER INSIGHTS: Pet indicators Social trends Demographics Macro-economics ALL CHANNELS COVERED: Supermarkets/Hypermarkets Discounters Pet superstores Pet shops Veterinary clinics Homeshopping Internet retailing Direct selling Other grocery and non-grocery retailers Pet expenditure in 52 markets = 98% of total global expenditure
  • Global Pet Food and Pet Care Products: 2004-2009 Global Market Overview
  • Global Retail Value Sales by Category: 2009 Global Market Overview
  • Global Sales of Dog and Cat Food: 2004-2009 Global Market Overview
  • Global Market Overview Retail Volumes Get Boost From Downturn, Emerging Markets
  • Global Market Overview Global Retail Value Performance by Price Platform
  • Global Market Overview Dog/Cat Food Global Retail Distribution Landscape
  • Global Market Overview Grocery Channels Halt Retail Value Share Decline In 2009
    • Non-grocery sees first share loss in decade in 2009
    • Grocery retailers hold steady at 53.2% of global retail value
    • Internet retailing drives non-store another 10 bps in 2009
  • Global Market Overview Global Pet Specialists Constrained in 2009…
  • Global Market Overview … As Supermarkets/Hypermarkets Appeal to Price Conscious
  • Global Market Overview Global Premium Dog and Cat Food Competitive Landscape
    • Greatest opportunities still in Latin America and Eastern Europe
    • Russia remains primary engine of growth in Eastern Europe
    • Brazil most dynamic market in Latin America but Mexico hurting
    Global Market Overview Dog and Cat Food Retail Value Performance by Region
  • Global Market Overview Dog and Cat Food Absolute Retail Value Growth by Region
    • 10 Largest Markets in 2014
    • 10 Fastest Growing Markets to 2014
    Global Market Overview Dog and Cat Food: Largest versus Fastest Growing Markets Country 2014 US$ Millions 2009-2014 CAGR USA 20,182 2.5 Brazil 4,329 3.8 Japan 4,285 2.4 UK 3,579 0.7 France 3,309 1.0 Germany 2,649 0.2 Russia 2,226 11.8 Italy 2,037 0.4 Canada 1,556 2.4 Australia 1,410 0.8 Country 2014 US$ Millions 2009-2014 CAGR India 65 11.9 Russia 2,226 11.8 Romania 333 11.5 Morocco 54 8.5 Thailand 409 7.7 S. Africa 489 7.2 Indonesia 25 7.1 Slovakia 120 6.9 China 407 5.9 Venezuela 490 5.9
  • Prepared Dog and Cat Food on the Rise in Russia Global Market Overview
  • Dog/Cat Food: Untapped Potential in Emerging Markets Global Market Overview
  • Dog/Cat Food by Price Band in Key Emerging Markets Global Market Overview
  • Global Market Overview Key Trends and Market Drivers Health & Wellness Opportunities Future Outlook and Strategic Recommendations Q&A
    • Pet ownership
    • Pet humanisation
    • Premiumisation
    • Health and wellness
    Key Trends and Market Drivers Global Dog and Cat Food Market Drivers
  • Key Trends and Market Drivers Ageing Consumers Promote Pet Population in G7 Markets
  • Dog/Cat Population Growth in Key Emerging Markets Key Trends and Market Drivers
    • Dog/cat population will surpass 50 million animals in Brazil during 2009
    • China and Russia also see steady gains in dog/cat population
    • Strong growth in India but dog/cat population still under 10 million
  • Urban Culture Will Soon Dominate the World Key Trends and Market Drivers
    • Half the world’s population urban by 2015
    • Ageing consumers
    • Younger consumers staying single/childless longer
    • Rising disposable incomes in emerging markets
    • Increasingly urban populations
    • Busy lifestyle and longer working hours
    • Pet humanisation influencing purchase decisions
    • Willing to pay a premium to improve pet’s quality AND quantity of life
    Changing Demographics and Cultural Attitudes Key Trends and Market Drivers
  • Key Trends and Market Drivers Dog and Cat Food: Key Growth Segments
    • Fastest growing segments globally: 1998-2009 Retail Value CAGR
      • Cat treats and mixers : 8%
      • Premium dog food: 8%
      • Healthcare: 7%
      • Dog treats and mixers: 6%
      • Premium cat food: 6%
      • Dietary supplements: 5%
      • Economy dog food: 4%
      • Mid-priced dog food: 3%
      • Mid-priced cat food: 3%
      • Economy cat food: 3%
    • Treats, healthcare, premium food driving global growth!
  • Global Dog/Cat Food Retail Value Share by Price Band Key Trends and Market Drivers
    • Whiskas Cozinhado ao Vapor by Mars (Portugal)
    • Gourmet Gold Soufflé by Nestlé (France)
    • Kwispelbier “Dog Beer” (Netherlands)
    • Gourmet Perle Duck by Nestlé (Bulgaria)
    Key Trends and Market Drivers Premiumisation: Human-Led Ingredients, Applications
  • Global Market Overview Key Trends and Market Drivers Health & Wellness Opportunities Future Outlook and Strategic Recommendations Q&A
    • Free from:
      • Gluten
      • Soy
      • Wheat
    • Hydrolyzed proteins
    • For sensitive skin and digestion
    • “ Food Minus”
      • Less calories
      • Lower fat
    • “ Food Plus”
      • More fibre
      • Fortified with L-carnitine
    • “ New Premium”
    • Renewed importance after Menu Foods Recall
    • Shift from purely organic to “all natural”
    • Joints
    • Dental
    • Immunity
    • Digestive
    • Beauty
    • Age/breed/size/lifestyle specific
    • All Natural and Organic
    • Fortified and Functional
    • Weight Management
    • Food Allergies and Hypoallergenic
    Health and Wellness Opportunities Dog And Cat Food Health & Wellness Product Trends
    • All Natural and Organic
    • Fortified and Functional
    • Weight Management
    • Food Allergies and Hypoallergenic
    Health and Wellness Opportunities Dog And Cat Food Health & Wellness Product Examples
  • The US$520 Billion Global Health & Wellness Market Health and Wellness Opportunities
  • Organic Food And Beverages Go Mainstream… Health and Wellness Opportunities
  • … But Manufacturers Need to Seek Out New Markets Health and Wellness Opportunities
  • Health and Wellness Opportunities Natural, Organic and Human-Grade Dog and Cat Food
    • Pet humanisation leads to specialised formulas addressing:
        • Weight loss and management
        • Arthritis relief
        • Sensitive skin
        • Diabetes
        • Digestive / Urinary tract health
        • Immune system support
        • Mental development and health
    Functional Dog and Cat Food Trends Health and Wellness Opportunities
  • Health and Wellness Opportunities Leading Fortified/Functional Trends And Ingredients
    • Pedigree Joint Care+ by Mars (UK)
    • Whiskas Immuno Cat Food by Mars (Russia)
    • Royal Canin Oral Bar by Mars (Netherlands)
    • Yorkshire Terrier Junior by Royal Canin (Spain)
    Health and Wellness Opportunities Fortified/Functional Dog and Cat Food
  • Retail Value Performance For Human Pre/Probiotic Yoghurt Health and Wellness Opportunities
  • Retail Value Performance For Human Fish Oil Capsules Health and Wellness Opportunities
  • Health and Wellness Opportunities Global Nutraceuticals Worth US$228 Billion In 2008…
  • … But Retail Sales Still Concentrated In Developed Markets Health and Wellness Opportunities
    • Pedigree Puppy Weaning (India): Fortified with calcium, phosphorus for healthy bones and teeth
    • Gimpet Comert’s Cat- Milk (Romania):
    • Similar to breast milk and fortified with taurine for cardiac health
    Health and Wellness: Product Segmentation by Age Health and Wellness Opportunities
  • Cats, Small Dogs Grow Share of Global Pet Population Health and Wellness Opportunities
    • Urbanisation boosts pure-breed popularity
    • Increasingly seen as status symbols
      • Paris Hilton effect
      • Moscow Pet Fashion Week
    • Pure breeds face more health problems
      • UK-based Animal Health Trust estimates more than 350 inherited diseases identified in pedigree dogs
    • Swedish study found pure breeds pets had an average life expectancy of 6.7 years versus 8.5 years for mixed-breeds
    • Sainsbury’s Pet Insurance in the UK found twice as many pedigree owners file claim
      • Cardiac arrest
      • General illness
      • Skin tumors/dermatitis
      • Diabetes
    New Opportunities Emerging For Pure Breed Formulas Health and Wellness Opportunities
    • June 2007: Pfizer introduces Slentrol for canine obesity
    • Pet “fat camps”
    • Efforts by pet food manufacturers:
      • Reduce calories
      • Lower fat content
      • Increase fibre
      • Fortified with L- Carnitine, CLA, fish oils
    • Key Trends and Developments
    • Doggy Fat Camp
    • Nestlé Pro Plan Adult Reduced Calorie
    • Arden Grange Adult Cat (UK)
    Health and Wellness Opportunities Dog and Cat Food for Weight Management
    • Hydrolyzed proteins
    • Free from gluten, soy, wheat
    • For sensitive skin and digestion
    • Market opportunities still focused in:
      • Western Europe
      • US
    Health and Wellness Opportunities Food Intolerance and Allergies
  • Global Market Overview Key Trends and Market Drivers Health & Wellness Opportunities Future Outlook and Strategic Recommendations Q&A
  • Global Sales of Pet Food and Pet Care Products: 2009-2014 Future Outlook and Strategic Recommendations Global Pet Food and Pet Care Products retail value sales still forecast to grow at an average rate of 2-3% annually from 2009-2014
  • Future Outlook and Strategic Recommendations Global Sales Will Carry on Growing Through to 2014
  • Future Outlook and Strategic Recommendations Value for Money vs Value for Health & Wellbeing
  • Future Outlook and Strategic Recommendations Value for Money vs Value for Health & Wellbeing
    • Numerous functional ingredients currently available
    • Consumers struggle with different benefits
    • Too much scientific detail can put consumers off
    • Clear message backed by solid science is essential
    Manufacturers Must Effectively Reach Consumers Future Outlook and Strategic Recommendations
    • Nutrition claims:
    • A nutrition claim states or suggests that a food has particular beneficial nutritional properties. Examples include “low fat” or “source of omega-3 fatty acids.”
    • Health claims:
    • A health claim is any statement used on labels, in marketing or in advertising that health benefits can result from consuming a given food or from one of its components, such as vitamins and minerals, fibre, and ‘probiotic’ bacteria.
    • There are two different types of health claims:
      • General function health claims:
      • Statements that a food can help “reinforce the body’s natural defenses” or “enhance learning ability.”
      • Disease reduction claims:
      • Claims to reduce disease risk and other substances that may improve or modify the normal functions of the body, such as “Calcium may help improve bone density.”
    Future Outlook and Strategic Recommendations EFSA Articles 13 And 14 Will Be Transformational
  • But Greater Regulation Can Also Help… Future Outlook and Strategic Recommendations
    • REGULATION is not always a burden
    • It can SPUR INNOVATION
    • Japan's leading position in global Health and Wellness Food is due in large part to the 1991 FOSHU (Food For Specified Health Use) regulation
  • Future Outlook and Strategic Recommendations Criteria For Future Success In Global Health & Wellness Food
    • Congruence
    • Credibility
    • Regulatory Approval
    • GET YOUR SCIENCE RIGHT
  • Future Outlook and Strategic Recommendations Average forecast growth Average historic growth HIGH OPPORTUNITY LOW OPPORTUNITY Global Pet Care Category Performance:2004-2014
  • Future Outlook and Strategic Recommendations Pet Shops and Superstores Outlets Will Grow Globally… Global pet shops and superstores outlets will grow 13% from 2009-2014
    • The global pet food and pet care products market has been riding a strong wave of growth, in both developed and developing markets, which should sustain it through uncertain economic times
    • Economy pet food consumers of today will still be the premium pet food consumers of tomorrow
    • Strong investment in health and wellness pet food is still needed, particularly in markets where there is strong consumer awareness of health and wellness food and beverages for humans
    • Provide consumer education on the benefits of your product offerings and make them widely available in order to grow your sales
    • Leverage strong word-of-mouth recommendations through specialist channels, particularly for premium and health and wellness offerings
    Key Conclusions: Yes, Times Have Been Hard But… Future Outlook and Strategic Recommendations
  • Future Outlook and Strategic Recommendations
    • Leverage strong and trusted recommendations through vet channels
    • Maximise distribution through pet superstores and Internet retailers
    • Continued segmentation by age, breed and lifestyle
    • Organic, natural, fortified/functional food and beverages
    • Consumer education
    • Reinforce brand awareness through sponsorship of “pet events”
    • Upscale packaging in the form of plastic pouches
    • Resealable packaging for better storage
    • Sustainability
    Dog and Cat Food Prospects by Price Band in Your Markets Marketing Product segmentation Packaging Distribution
  • Thank You!
    • Lee Linthicum
    • Head of Global Food Research
    • Euromonitor International
    • [email_address]
    • Q&A