Interview with Pipa Nogaró, CEO of Puppis: “There are still huge opportunities for pet players in Spanish-speaking countries in Latin America”

With a burgeoning network of over 70 pet stores and online business across Argentina, Colombia and Mexico, Puppis is well placed to capitalize on the fact that customers who combine online and offline purchases spend over 8 times more than those who only shop in-store – but the business has no intention of stopping there.

Puppis health arm Petplus operates with 20 vet clinics and 4 veterinary hospitals in Colombia and is working to opening its first site in Argentina. CEO Pipa Nogaró tells PETS International why he firmly believes that the combined supplies and services model offers a win-win proposition in Latin America.

You started in the business nearly a decade ago. How has the Latin American pet industry changed since then?

When I started looking at the business, I was living in the UK and I saw Pets at Home and Pets Corner. The professional chain format was just starting in Latin America – Spanish-speaking LATAM was virgin territory.

The industry has evolved a lot in terms of professional multi-regional chains like ours. It’s very early days compared to developed markets and there are still huge opportunities in Spanish-speaking countries in the region.

How does Puppis fit in with the regional pet retailing ecosystem?

We believe in an omnichannel strategy. The store acquires customers – it is a service center, delivery platform and place to discover products. What works best is a medium-sized store of about 250 sq m with a great assortment. If the customer wants more colors or more sizes, they can purchase them online. This model works for us and we want to use it going forward.

Where are you mainly located?

Generally on the high street, always close to services like hypermarkets. But we’re also in shopping malls, with around 20% of our shops there. Being there gives you branding, awareness and prestige, but then always next to the supermarket and service area.

What are the challenges of operating in different markets?

The model works very similarly in all markets – branding is the same and the product mix very similar. In Mexico, we have a lot of competition from Petco. They’re doing a great job but we manage to bring another offering to the market. We focus on cats and dogs in Mexico, but we sell our whole range in Colombia and Argentina.

In more open markets like Colombia, we have many products from abroad. Argentina is much more restrictive, while Mexico is somewhere between the two. Colombian pet parents spend slightly more on pampering than they do in Argentina, so grooming is a bigger business over there.

What is the average expenditure of your customers in Colombia, Argentina and Mexico?

The average ticket price – so how much a customer spends during one visit – is around $20 (€18) across the markets we operate in. Our recurring customer comes into the store once every 45-60 days, which means that average annual expenditure is around $120-$160 (€111-€148) per customer.

This is mostly driven by pet food, but other categories are growing as customers start to see a wider assortment. Currently, pharmacy products make up about 10% of our revenues, but we think that could grow by at least 50% in terms of share of revenue.

In Colombia, purchases are often driven by services…

Yes, services do account for nearly 15% of our revenue in the Colombian market. What’s also interesting on the service side of things is the ‘whole health plans’. We have our own product called Prevention Plus and that’s growing very strongly year-on-year.

Is there any difference in expenditure depending on the market?

The numbers are similar in all markets. After the new Argentinian government came into power, it devalued the peso, but things have now evened out. In Mexico, we currently have a slightly higher ticket price – mainly because we’re in Monterrey, a wealthy city. Pricing is also quite similar in all countries in the region: Argentina was much cheaper a year ago, but now it’s level with the others.

How has the economic situation in Argentina changed with the new government?

Our category is super resilient – actually we’re doing very well in terms of volume, although accessories are probably down by over 20% year-on-year in units. The premium market is holding up very well as a category with a lot of customer loyalty. Chains like ours gain share during crisis periods. So Argentina is a great opportunity for our business despite global opinion that it is a no-go market.

What is your approach when it comes to private label?

We think that working with local brands and big players is key, but we also have our own products and we bring exclusive products to our markets – selling them with a great value proposition. Nufood is our own brand for food and Puppis is the best selling brand in accessories, and both have great customer feedback.

Our private label strategy is really bringing directly to our customers under our brands the best of what we’ve learned over the years.

Many products we develop under our brand are only sold at Puppis – we don’t sell them on marketplaces or other platforms. Private label currently accounts for 6% of sales, but we’re aiming to hit 40% in the next few years.

Are Latin American pet parents becoming more interested in natural and healthier products?

That’s definitely a trend we are seeing, although much more noticeable in Colombia than in Argentina because of the product offering. It’s all about educating the customer, so that pet owners are conscious about what they’ve been feeding their pets and the benefits they could have from better nutrition. Then they start going up the product ladder, so I think that’s a huge opportunity.

What can you tell us about your approach to loyalty programs?

We launched one in Colombia a few years back, and we are relaunching it this year in Argentina and Colombia with a different proposition, much more focused on customer behavior. We’re actually launching a new loyalty plan in the last quarter of 2024.

This is going to be called Puppis Club and will be a kind of premier service, including discounts and also the basic coverage for annual veterinary checks – the consultation plus vaccinations or anything else required. It should work really well.

You are also launching a franchise system in Argentina…

We are indeed launching a franchise model in the country, to cover the outskirts of urban areas and to partner with local players in the inner city of Buenos Aires and its suburbs. That is a way to scale up faster and to work with individual entrepreneurs.

What’s next for Puppis?

We see opportunities to accelerate our growth and have around 200 stores in Argentina and Colombia. Mexico alone could have a few hundred stores and we have just landed there. Chile, Uruguay and Peru are also very attractive markets for us, and we’ll be aiming to expand there as well.

Central America is also very interesting as our ambition is any market big enough in Spanish-speaking Latin America where we can be a top 3 player.

That is our dream, but how far we’ll go and how quickly we’ll get there? It will all depend on how well we can implement our strategy. Our plan is to go towards 400 stores in the next 5 years.