Opportunities in Thailand for pet food companies

The Thai pet food market has grown strongly this last decade, doing so across many dimensions: gaining more value, more buyers and more players. The country’s pet food industry has a market opportunity of over THB 10 billion ($288M), with opportunities in the dog food market alone worth an estimated THB 7.4 billion ($210M).

Urban pet owners

Kantar Worldpanel’s Household Panel reports that the number of Thai households owning pets grew in the third quarter of 2022. Households with a cat increased by 2.4%. Those with both a cat and a dog rose by 1.8%, while families with just a dog, dropped slightly by 0.9%.

If we look deeper into the country’s different regions, the number of households with pets is growing faster in the Greater Bangkok region than in any other area. This might be a sign of a major change on the horizon for the whole country, as the capital city normally leads the way in changing trends.

Still more table food than commercial

Despite the growing number of households with pets, less than half (47%) purchase packaged pet food. Only 3 out of 10 dog owners buy packaged food, whereas most cat owners (77%) opt for packaged food.

The capital region has the highest rates of commercial pet food purchases, with almost 80% of urban pet owners purchasing packaged animal food. Only 34% of rural households with a pet purchase commercial pet food.

As for the number of buyers overall: there appears to be little that has changed. Increasing sales figures are mainly from cat food purchases, whereas sales in dog food dropped by 2% last year. Overall value sales are still increasing in pet food, mainly driven by cat food (+7.5%) and dog food (+2%).

Market outlook

If we benchmark pet food against the fast-moving consumer goods market, we see that its 3-year compound annual growth rate (CAGR) is 3.2% and the market size is around THB 9 billion ($261M).

According to our data, average spending is on the rise. Pet parents spent an average of THB 177.3 ($4.25) per shopping trip in 2022, an increase against the previous year. Thai dog owners spent the most with THB 184.6 ($5.33), followed by feline owners with THB 125.4 ($3.62).

Overall, pet owners purchase 2.4 brands per year on average. Cat owners buy more brands than dog owners, who buy around 1 brand per year.

Market opportunities

The cat food market is quite fragmented, with 8 brands contributing 80% of the market share. Dog food appears to be less fragmented with only 5 key brands in the market: most of them leading international brands.

So, what are the implications for manufacturers who want to enter the Thai market? They should definitely have different sales strategies for their dog and cat food products.

In dog food, they need to compete with a few major players and try to recruit new buyers, whereas cat food brands must compete with multiple players. And with few new cat pet parents in urban areas, the market is tight.

Products – what segments are popular among pet parents?

Dry pet food contributes to around 9 out of 10 sales, according to our data. Mainstream and economy products dominate the market for both dog and cat food.

In dog food, the premium category is growing by 46%. We also see a trend in pet food for puppies: a growth of 54%.

In Thailand, cat food as a category seems to be even more developed than dog food: in the cat food- category premium and super premium dry cat food is growing faster than any other segment. Kitten food also shows strong growth of around 25%, driven by new pet-owning households.

The channels to focus on 

Pet stores and provision stores are the key channels for buying pet supplies. However, online channels are growing fast, while offline is slowly losing ground.

Kantar Worldpanel’s Household Panel reports that pet stores accounted for 38.7% of pet food sales in Q3 2022, followed by grocery stores (20.6%), online (11.7%), hypermarkets (11%) and convenience stores (5.8%).

While online purchases grew by more than 78% in a year, the sales of pet supplies in provision stores dropped by 17.3%. Shoppers are tending to choose the online channel to stock up on pet food: we’re seeing extremely high volumes bought per purchase moment (7.2 kg), while the frequency remains lower.

All in all, brands stand to benefit most if they succeed in taking advantage of the online channel to increase visibility and gain share from stock-up behavior. At the same time, brands should focus on pet shops as their main strategic channel. These stores represent a market share of almost 40%, with pet parents spending more per visit.