Country report: Argentina- A developing market with some challenges ahead

In the past 10 years, the Argentinian market experienced a yearly growth of 3% and it looks like that is set to continue. The overall Argentinian pet market is currently estimated at $1 billion. Last year, the country produced 764,000 tons of pet food, mostly economy products (40%), followed by premium (27%) and super premium (18%). About 18% of the production in 2021 (139,000 tons) was for export. In the first 4 months of 2022, Argentinian pet food producers had exported 40,000 tons.

There are at least 40 pet food manufacturers in the country, mainly concentrated in 3 states (Buenos Aires, Cordoba and Santa Fe) – areas where the most corn and other grains are grown. 70% of the producers are big corporations, while the rest are local small and medium-sized companies.

Import is growing too, as consumers are keen to use more specialized food not produced locally.

Wet food is the future

During the pandemic, pet adoptions increased by about 200%. 86% of the households in Argentina now have at least one pet, mostly a dog or cat. CAENA estimates a total of 17 million dogs and 11 million cats in the country, but only 33% of the calories they consume come from pet food. In Argentina, most pets are fed with leftovers.

In the future, the industry will focus on local growth – mainly wet food – and international trade. Argentinian pet food producers have a lot to offer: good quality products and competitive pricing.

Offline versus online

The Argentinian pet food market is predominantly offline, with pet stores (39%) representing most of the sales. Animal feed or rural stores account for another 37%, and supermarkets for 11%.

As yet, there is no data for online sales, but they have certainly increased considerably in the last few years and now probably represent almost 7% of the total market. Numbers are still low compared with other markets, mainly because of logistics, a lack of businesses’ digital development, and connectivity problems – especially in the interior of the country.

Taxation

The industry’s main challenges are local regulations, local taxes, export taxes, and a lack of incentives for Argentinian companies to export their products.

In Argentina, there is government tax retention of an average of 5% from the FOB (Free On Board) price. In addition, there are no incentives for the industry – such as tax cuts or special credits – and many requirements for imports. This prevents the industry from being able to compete in good conditions on the demanding international scene.

Support for the sector

CAENA represents 140 companies, 40 of them pet nutrition businesses accounting for 85% of the national market volume. It is a member of Feed Latina (which consists of all the animal nutrition associations and regulators from the Latin American region) and of GAPFA (Global Alliance Pet Food Association). Every 2 years it organizes a nutrition conference. In 2021, the conference theme was sustainability. Currently, CAENA is working on a program related to that, and the first step is measuring the carbon footprint of its member companies. Another activity is setting up packaging recycling awareness programs.

Actively working to support its member companies, CAENA advocates for fewer regulations and more commercial facilities that would allow pet food companies to increase their business. CAENA is also involved in education, currently focusing on a foreign trade program to motivate companies to get involved in more export and to participate in international events to present Argentinian products to the world. Other education activities involve good manufacturing practice (GMP) and hazard programs.

CAENA hopes to offer even more benefits to its members in the future that will make a big impact in their daily lives