Growth and specialisation in pet retail reflect maturity of Brazilian market

Family members

The pet market in Brazil saw positive numbers in 2017, with growth and a sharp rise in professionalisation, helping the sector to earn R$32.92 billion (€7 billion/$8 billion) in revenue last year. The pet sector, which employs around 1 million people in Brazil, benefits from the profile of its customers. Brazilians have a special relationship with their pets, who are considered to be true members of the family.

How many pets?

According to the latest survey from the IBGE (Brazilian Institute of Geography and Statistics), there are over 132 million pets in the country. This number breaks down into 52 million dogs, 38 million birds, 22 million cats, 18 million fish and around 2 million other small animals. This gives Brazil the fourth largest pet population worldwide, trailing China (289 million pets), the US (226 million) and
the UK (146 million).

Retail landscape

It is within the increasingly solid structure of this relationship between pets and their owners that there are prospects for market growth. Specialised retailers (pet shops) account for the largest share in the sector’s performance, bringing in R$26.61 billion (€5.6 billion/$6.5 billion) followed by animal sales at R$4.28 billion (€0.9 billion/$1.05 billion) and pet food retailing (supermarket sales of pet food) coming in at R$2.03 billion (€0.4 billion/$0.5 billion).

Recent developments

Innovative business models – and even new jobs – have been created in Brazil because of pet market growth resulting from the pet’s place in the
Brazilian family.

Many professionals like dog walkers and pet sitters are already well established in the country, along with services such as hotels and hospitals plus specialised treatments for pets. Brazil is now experiencing a new phase in this phenomenon: super-specialisation of the pet market. Products such as cosmetics and furniture made exclusively for pets are already a reality in the country, along with funerals and funeral planning geared towards pets.

Data also points to another revealing phenomenon: increased professionalisation of specialised retailing. Brazil has seen the growth of small pet shop chains: over 200 companies with between 2 and 30 stores, within a universe of 30,450 stores.

Another step in this professionalisation is the current trend of franchises, especially in major urban areas. This means increased competition, and franchises are gradually starting to replace neighbourhood pet shops.

High taxes

All of this is surprising, considering that the pet food segment is heavily taxed in Brazil, which has a significant impact on product prices and makes many products inaccessible for C, D and E classes of consumers. Altogether, taxes account for 52.1% of the product’s retail price, a bottleneck that inhibits the sustainable and economic development of the pet sector. Brazil has the highest taxes in the world. In Europe, the pet industry is subject to taxes of around 18.5%. In the US, taxes are less than 7%.

Based on its data collection and all the opportunities available, Pet Brasil Institute believes that, with an increased focus on knowledge and innovation, the pet industry in Brazil will see further growth in both volume and value. This, in turn, will strengthen its position in the global market.