Economic uncertainty leads to certain changes in purchasing habits
Following the poor economic situation in Thailand in 2006, pet owners had to adjust their purchasing habits in 2007, with many of them switching to mid-priced and economy dog and cat food. However, economic uncertainty did not seriously affect the purchasing habits of middle- and high-income pet owners who remained willing to invest in their pets. This trend was instrumental in driving the value growth of dog treats and pet care products in 2007. On the other hand, manufacturers continued to boost the awareness of the benefits of prepared dog and cat food by participating in various shows such as the annual “PET Expo”.
Nutrition and indulgence become the choices of pet owners
Increased awareness amongst pet owners regarding the benefits of prepared dog and cat food as opposed to non-prepared types of food resulted in an increase in the penetration of prepared dog and cat food in households. Leading manufacturers, particularly of dog and cat food, persistently advertised the nutritional benefits of their products on television and at pet shows and pet fairs, thereby increasing awareness and demand for these products. Similarly, sales of single serving pouches of cat food, of dog treats and of various novelty pet care products all benefited in 2007, as those pet owners with higher disposable incomes sought to pamper their pets.
Competitors fight for value share
Dog food and dog treats continued to achieve the strongest value growth in pet food and pet care products in 2007. Competition in dog food intensified in 2007 with leading manufacturers competing both above the line and below the line. Nestl? Purina PetCare Co and Effem Foods (Thailand) Co Ltd both aggressively advertised their brands in order to increase consumer awareness and gain value share. The “fight” was carried over into supermarkets/hypermarkets outlets, where both players wrestled to achieve greater visibility and more shelf space. Several new products, promising added nutrition and flavour and economical “bulk” packages were launched, while small packs were also introduced to encourage trial consumption. Dog treats was an area of focus for most new launches, given its high profitability and great appeal to pets. Pet care products, particularly for dogs also experienced a plethora of new product launches, mainly imported. These new, innovative products appealed to many dog owners, who did not mind paying the high prices that such novel and exclusive products demand.
‘One stop’ outlets gaining popularity
As pets have several needs including food, accessories and veterinary care and as pet owners become increasingly busy, a number of “one stop” outlets that cater to all these different requirements, in just one location, have emerged. Furthermore, a multitude of veterinary clinics outlets, with their own pet shop and pet grooming centre sections, have appeared in the cities. Supermarkets/hypermarkets outlets have also begun to offer a much wider variety of products. While the focus in veterinary clinics outlets is on nutritious, premium products, the popularity of supermarket/hypermarkets outlets has grown due to their economy and mid-priced brand offerings.
Pet food and pet care products expected to continue its positive performance
With disposable incomes expected to increase over the forecast period and households expected to become smaller as well as the aging population being expected to continue to increase, it is expected that many people will continue to seek the company of a pet. Owing to increased awareness of the nutritional benefits of pet food and continued increases in the pet population, pet food and pet care products is expected to perform well with the strongest constant value growth coming from dog treats, as dog owners start to treat their dogs even more like family members.
PET FOOD AND PET CARE PRODUCTS IN THAILAND :
MARKET INSIGHT
Pet Population
Out of the population below, only 2.6 millions dogs and 0.5 millions cats are well-cared
Estimated House Pet Population in Thailand
Unit : Mill
Type
2005
2006
2007E
Dog
7.44
7.52
7.60
Cat
3.6
3.76
3.93
Bird
1.3
1.35
1.41
Fish
2.85
2.94
3.02
(Sourse: Euromonitor @ May 2006 * Estimated % growth)
Retail Value of Pet Food in 2006
Total market worth more than 4.5 Billion Baht and majority of volume is still dry Pet Food
Retail Sales of Dog & Cat Food 2006
Type
2006
Vol.(MT)
Value(MB)
Wet Dog Food
6,425
2,943
Dry Dog Food
50,172
2,943
Dog Treat
616
226
Subtotal
57,213
3,675
Wet Cat Food
4,192
321
Dry Cat Food
6,173
542
Cat Treat n/a n/a
Subtotal
10,365
863
Total
67,578
4,538
(Source : Euromonitor @May 2006)
Forecast Retail Sales of Dog & Cat Food
Retial Sales of Dog Food by Type : Volume & Value 2005-2006
