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Pet food in CEE: Shopping behavior & the most popular brands

Already a very interesting e-commerce industry, pet nutrition is also one of the fastest growing. Us Europeans, we love pets – be it dogs, cats, or other furry animals. No wonder there are over 140 million of them in Europe, leaving a growing number of owners to watch their dogs’ plates carefully: Is it healthy? Is it contributing to my pet’s quality of life and longevity? Am I a good owner? The fact that we now have no real need to carry heavy bags ourselves, as ecommerce has that covered for us, makes shopping for pet food even more online-centered. How do consumers shop for cat and dog food and make decisions about their dietary needs? What brands are the most popular in Central Europe and what trends are emerging?

Fast growth in Central and Eastern Europe

Generating 30% of world’s total cat and dog food sales, Europe is considered a leader in the industry. Online shopping for pet food is increasing by 5-9% every year in Europe, according to Euromonitor, and the pace is predicted to remain similar until at least 2021. “Western Europe’s current pet care e-commerce sales of €1.6 billion will continue to grow at a healthy clip of 5.6 percent, while Eastern Europe, though showing much lower sales of €235 thousand in 2016, will average about 9.2 percent growth a year,” Petfoodindustry.com tells us, putting the data into a European context.

There are more than 140 million cats and dogs in Europe, Petfoodindustry.com says. Cats remain the most popular pets in European households, with a stable population of 74.4 million in the EU and 102.7 million in Europe and Russia. Dogs are growing in popularity with 66.4 million dogs in the EU (84.9 million in Europe and Russia) in 2017 compared to 63.7 million (82.2 million for the larger geographic area) in 2016. “The growth in pet population is good news for the European economy, with the pet care sector contributing a significant turnover of €36.5 billion,” Petfoodindustry believes.

Source: Statista.com

In the Czech Republic alone, there is at least one dog in 41% of households, whereas cats are found in only in 22% of families. Poland too is a dog country, with dogs in 38% of households. In Hungary, the ratio is 33% for dogs and 34% for cats (Statista.com).

 

The Millennial obsession with quality pet care

If older generations have grown fonder of their furry friends and started a trend of treating them as family members, Millennials have set the bar even higher. First and foremost, millennials are the largest ever pet owning group. “As Millennials begin to carry the mantle of pet ownership, we will continue to see growing trends in online spending for pet products. According to USA Today, Millennials are now making 54% of their purchases online,” Keegan Edwards argues in this article. And it’s not just increasing attention to nutrition, but also cosmetics, toys and other products designed to increase the overall quality of life for your pet. The popularity of both online and local pet communities, peer-to-peer dog walking services, and even apps and devices for owners to keep track of their pet’s eating habits and activity paint a fuller picture.

With growing interest in sustainability, physical and mental health, and the ever-evolving eating indulgence culture, Millennial owners reflect their own values back on their pets. They even want the dog food to taste great, less for the pet itself, but rather to give themselves a great deal of satisfaction as well as the confirmation, I am now a good owner. FEDIAF calls this phenomenon “the humanization” of the pet industry: “Many pet owners are looking for pet food that reflects their own taste.  As a result, there has been an increase in premium products – with ‘natural’, ‘raw’ and ‘organic’ food on the rise – giving lots of choices for owners.”

 

Premiumization of cat and dog nutrition

With quality playing the main role, another undebatable phenomenon in the pet segment is the consumer’s tendency towards premium brands. “Specialist products, including those focusing on specific health benefits, continue to be very popular and have shown strong growth,” FEDIAF says. “Premium, luxury, healthy and functional foods are moving into the mainstream, as owners seem more focused on their pet’s diet.” The fact that these products are usually priced higher doesn’t slow down the increasing demand.

This creates an opportunity for private labels which have been underrepresented in the competitive market with big brands. In both Germany and Hungary, more than 50% of pet care brands are private labels. They make up 44% of the industry in Austria, 43% in Slovakia, 39% in Poland and 32% in the Czech Republic (Friends of Pets 2017). “Cat and dog food are becoming closer to human food. Consumer behavior trends are getting companies to increase its quality, add functional benefits, new options (grain free, gluten free or non-GMO), new ingredients (superfoods), and create even more suitable options for different weight and age categories,” Karolína Čápova from Vafo (Brit manufacturer) said at last year’s Friends of Pets Conference. For more detailed and ingredient-focused pet food infographics, see this Nielson report.

 

Having said that private labels are slowly increasing in market shares, it is also important to state that the majority still belongs to big, super-premium brands such as Brit, Whiskas, Royal Canin etc. “The premium category drives pet food sales in Western Europe, though growth is still less than 2 percent for that category; in Eastern Europe, economy and mid-priced are the largest pet food categories, while premium pet food, though still a small category, is growing 6 percent a year,” Petfoodindustry.com sums up.

 

Shopping behavior: Where and when does CEE shop for pet food?

The pet food industry is yet another segment undergoing changes in shopping behavior due to Amazon’s increasing power. In the USA, Amazon and Chewy.com make up 85% of the online pet food market share. According to Packaged Facts, “Amazon attracts more than half of those who purchase pet products online, passing Chewy.com, PetSmart.com, PetCo.com and Walmart by a noteworthy margin. And with Amazon having recently launched their own private label for Pet Care products, Wag.com, this move might influence the industry on a bigger scale in the future.”

Apart from the aforementioned sites and marketplaces to shop for dog and cat food, Zooplus and its localized iterations are also increasing in popularity in Europe. Last but not least, pet owners are also used to shopping on price comparison sites and local marketplaces.

Dog and cat food usually have a long shelf life and are super heavy to carry from a brick and mortar shop to the buyer’s cars and homes. A pet also consumes its food at a certain pace, which makes pet food very well suitable for subscription services. More and more pet food startups are emerging to build stronger B2C relationships based on subscription and other services.

This does not mean that brick and mortar is dead, either. “Although vet clinics, pet superstores and neighborhood pet shops are seeing reduced sales overall, mainstream and neighborhood pet retailers continue to find ways to resonate with pet owners, and experience modest growth alongside the rapid growth of online sales, Nielsen.com informs. “In fact, when it comes to shopping for Fido and Mittens, pet owners are pretty particular. Approximately one in two pet owners (51%) indicates that they don’t ever plan to shop for or purchase pet items online.

Source: Nielsen.com

Case study: The pet nutrition market and revenue growth in the Czech Republic

To better paint a picture of consumer behavior and brand popularity in CEE, we used TrendLucid by DatawepsTrendLucid gathers data from the biggest price comparison websites in the Czech Republic like Heureka.cz and we are showing a Czech case study to understand the ongoing trends in CEE.

TrendLucid data confirm that there has been an increasing market growth as well as revenue growth.

 

In terms of revenue, the dog food industry is by far dominated by Brit (18 947 135 in revenue). The second and third places belong to Royal Canin (5 066 122 in revenue) and Acana (€4 007 895 in revenue). The cat food segment is dominated by two companies in a much more balanced manner. Whiskas (3,544,596 in revenue) and Royal Canin (2,153,435 in revenue) are the industry leaders. Now how do the brands perform in terms of sales and market share?

 

Sales and market share: Which brands do Czech pet owners opt for?

There is a clear winner in terms of market share in the dog food segment. It seems that Czech dogs (or their owners, to be more specific) prefer Brit the most (over 691 thousand products sold in the last two years). Other significant players are Royal Canin (over 230 thousand) and Acana (67 thousand). Pedigree (44 thousand), K-9 (20 thousand) or Carnilove (33 thousand) make a little over 1% of the market share and are therefore not listed in the top brand chart.

The cat food segment is a bit more scattered when it comes to market share. Out of big brands, cat owners in the Czech Republic like to buy both Whiskas (over 135 thousand products sold in the past two years) and Royal Canin (112 thousand products sold) on a big scale. Another notable mention goes to Brit (92,7 products sold) and Brit Care (77 thousand) as well as Hill’s (39 thousand).

 

With that said, we must also take into consideration that different brands sell their products at varying prices, and sometimes a significant revenue stream comes from a small number of high-end products. More on that in one of our upcoming articles!

 

Summary:

The Czech Republic’s case confirms some of the CEE trends, especially the growing number of annual sales of pet food. What is also clear (and perhaps hidden between the lines) is how big of an opportunity there is for private labels to tackle the Central European market, which is currently dominated by big brand names. With increasing amounts of Millennial pet owners, tech disruption, and the humanization of pet food with more emphasis on clean, sustainable and ethical products, it is likely that the CEE pet food market will undergo significant changes in the upcoming years. What are you currently experiencing in the pet nutrition ecommerce market?


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