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Latin America's pet food industry, the third largest pet food market in the world with the highest growth rate, has a current market volume of 4 million metric tons, which is expected to increase to 6-7 million tons by 2017, according to a presentation at the International Rendering Symposium.
Latin America holds a 17 percent share of the global pet food market, according to Dr. Gianni Carniglia, National Renderers Association, who spoke at the symposium, recently held during the 2013 International Production & Processing Expo. Four Latin American countries hold nearly 95 percent of the market volume of pet food: Brazil, Mexico, Argentina and Chile (although 40 percent is imported here). Further, Brazil, Mexico and Argentina account for 93 percent of the volume, with Brazil alone capturing 70 percent.
Dr. Carniglia said that the Latin American pet food market has been sustained up to now mostly by economy products, but consumers are demanding higher quality as the socioeconomic situation improves. “Consistent and healthy growth in the pet food industry requires improvement in the quality of local protein meals and fat, a huge opportunity,” he said.
A presentation on the sustainability of rendering was also given at the symposium by Dr. Charles Gooding, a professor in the Department of Chemical Engineering, Clemson University. He explained that rendering meets most of the applicable 'green' criteria set by the World Resources Institute, based in Washington, D.C., USA.
Pet care in emerging markets is booming as pet ownership rises among the middle class, an article in the Economist says. Specifically, Latin America’s spending on petfood and pet products increased 44% in the last five years to US$11 billion, according to Euromonitor. The market research firm estimated that Chile has more pet dogs per person than in any other country. Rising incomes allow Latinos to treat dogs as members of the family because more of these young people are living alone, opting for pets as company and delaying marriage. These pet owners treat their animals as children, according to Euromonitor’s Emily Woon, who said that Latin America has become the “star market” in recent years. Despite their higher cost, Latinos choose dogs more often than cats, evident in the fact that dog food outsells cat food by almost six to one in this market.
However, there is room for further expansion in Latin America’s pet care market, as nearly three-quarters of Mexican dogs eat leftovers from burritos, the article says. Advertising campaigns like park billboards in Mexico City urge pet owners to switch to name-brand, packaged petfoods instead. The article also says that pet superstores make up more than one-fifth of pet product sales in America and Canada, but are seldom found in Latin America. The most popular stores in Latin America are still the small, independent pet shops, which retain customers by offering credit.
Sales of petfood and pet care products are surging in Latin America, led by the Brazilian market, according to the Latin Business Chronicle.
Over the review period of 2005-2010, sales of petfood and pet care products rose from US$4.8 billion to US$8.3 billion, according to Euromonitor International data. This represents a compound annual growth rate of 11.9%. The proportion of global pet care sales from the Latin American market rose from 7.6 % in 2005 to 10.2% in 2010. Brazil is the region's largest market with pet care sales of US$5.2 billion in 2010, followed by Mexico with sales of US$1 billion and Argentina with sales of US$645 million. Income growth in Latin America is attributed to the increase in pet industry value sales. According to Euromonitor International data, the proportion of Brazilian households with an annual disposable income of at least US$25,000 rose from 21.7% to 30.1% over the review period, while Argentina saw a greater increase from 33.5% to 44.8%.
Brazil's National Association of Pet Food Manufacturers, ANFALPET, reported the average unit price of dog food and cat food in the country saw increases of 7% and 5%, respectively, in 2009, meaning many consumers in the region have absorbed these price increases. Euromonitor International data also found growth in value sales of economy dog and cat food in Latin America slowed only marginally from 13.9% in 2008 to 10.5% in 2009, and recovered to 14.5% in 2010. Sales of mid-priced products saw growth slow from 15.9% in 2008 to 8.3% in 2009, before recovering to 10.6% in 2010. Growth in premium petfoods in Latin America fell from 10% in 2007 to 2.7% in 2008, but rebounded to 4.2% in 2009 and surged to 12.3% in 2010, according to the Euromonitor data.
Overall, pet healthcare sales in the region rose from US$69.4 million to US$119.1 million over the review period, an increase of 71.6%, according to Euromonitor data. The data also showed sales of other pet products, like clothing, jumped nearly 36% to US$334 million.
Euromonitor International predicts that Latin American pet care value sales will exhibit a compound annual growth rate of 5.5% over the 2010-2015 period, to US$10.9 billion (in 2010 prices). This will represent a significant slowdown from the review period due to threats of inflation and commodity dependence, according to Euromonitor.
Nestle SA expects petfood sales to surpass US$1 billion in Latin America next year as consumers there start buying supplies designed for dogs and cats, according to a Bloomberg article.
In the article, Nestle Purina's Chief Executive W. Patrick McGinnis said sales in Latin American countries like Brazil are growing at nearly 20% a year, as incomes of pet owners rise. McGinnis also said Nestle is hiring more salespeople and pursuing acquisitions to strengthen its Latin American business. According to the article, Nestle reported nine-month sales growth and a total revenue of US$85.4 billion, helped by gains in emerging markets like Latin America.
