Pet care trends Austria, Germany and Switzerland

Pet ownership may be growing in popularity in Germany and Austria (although not in Switzerland), but with private label accounting for close to one third of pet food value sales, the pricing power of brands is limited and real value sales are struggling to keep pace with volume sales in terms of growth.

Growth in Germany, decline in Switzerland

Pet ownership is expanding steadily in Germany: In 2010, 16% of households had a cat, while 13% had a dog, according to Euromonitor International data. By 2015, these figures had increased to 19% and 14%, respectively. In Austria, meanwhile, 29% of households had a cat in 2015, up from 27% in 2010, while 12% had a dog, unchanged from 2010. However, in Switzerland, pet ownership is in decline: In 2010, 25% of households had a cat, while 12% had a dog. By 2015, these figures had fallen to 23% and 10%, respectively.

Demand for small dogs

Within the canine population, small dogs (no more than 9kg) are the most popular. For example, there were 2.9 million small dogs in Germany during 2015, compared to 2.7 million medium dogs (between 9kg and 20kg) and just 1.3 million large dogs. This reflects the fact that Germany is highly urbanised, with over half of households living in apartments (22 million out of 41 million in 2014).

In Switzerland, registration data shows that the most popular breeds have been Chihuahuas, Yorkshire Terriers and French Bulldogs over recent years.

Strong demand for private label

German consumers have long been well disposed towards private label, with these products accounting for 29% of pet care value sales in 2014. In Austria and Switzerland, this figure is even higher, at 35% and 37%, respectively, in 2014. Private label is even a growing presence in premium dog and cat food, accounting for 10% of value sales in Germany during 2014, up from 7% in 2010.

This has retarded both the pricing power of brands and growth in pet food value sales: Volume sales of pet food in Germany rose by 1% between 2010 and 2015, to 1.2 million tonnes, while annual real value sales declined by 1%, to $3.4 billion (€3.1 billion), over the same period. 

Similarly, in Switzerland, pet care real value sales declined by 2% between 2010 and 2015, to $674 million (€616 million), while volume sales rose by 1%, to 83,000 tonnes. An increase in cross-border shopping due to the appreciation of the Swiss franc against the euro depressed sales somewhat in this market.

In Austria, volume and real value pet care sales rose by 7% and 4%, respectively, between 2010 and 2015, to 148,000 tonnes and $642 million (€588 million). Austria’s rising cat population and increased pet indulgence have both played a role in this, driven in part by 7% growth in the number of single-person households between 2009 and 2014.

E-tailing expanding rapidly in Germany…

Another factor limiting price growth is fierce retail competition. Specialist retailers play an important role in distribution, particularly German chain Fressnapf, which has a strong presence in all three markets. In Germany, pet superstores accounted for 25% of pet care value sales during 2015, with pet shops accounting for a further 12%. Modern grocery retailers accounted for 44% of value sales, with supermarkets (20%), hypermarkets (15%) and discounters (10%) dominant. The most notable distribution trend is the rapid growth of internet retailing, which accounted for 11% of pet care value sales in Germany during 2015, up from 5% in 2010.

…but not in Austria and Switzerland

Internet retailing is much less developed in Austria and Switzerland, where modern grocery retailers, particularly supermarkets, are dominant. In Switzerland, supermarkets alone accounted for 40% of pet care value sales in 2015, with internet retailing accounting for a mere 2%. This is partly a reflection of the retail dominance of the Migros and Coop chains, which accounted for more than a third (37%) of all store-based retailing (in terms of value sales during 2015). Similarly, modern grocery retailers accounted for more than half (52%) of pet care value sales in Austria during 2015, with pet superstores, pet shops and internet retailing accounting for a further 20%, 11% and 4%, respectively. 

Growth is forecast to strengthen

Buoyed by relatively strong economic growth (the country’s consumer confidence index hit a 13-year high in May 2015), German pet care sales exhibited modest growth in 2014 and this trend has continued into 2015. However, in real terms, they remain below their 2010 peak. 

Euromonitor International forecasts that real value sales of pet care in Germany will expand by 4%, to $4.8 billion (€4.4 billion), between 2015 and 2020. More modest growth (2%, to $685 million – €627 million) is forecast for the Swiss market, while Austrian growth will be more robust, with real value sales forecast to rise by 9%, to $702 million (€643 million). Shrinking household size will continue to drive both increased pet ownership and premiumisation in all three markets. 

In Germany, for example, the number of single-person households is forecast to rise by 6% between 2014 and 2019, to 19 million, while the number of households with three or more persons is set to decline. By 2019, more than three quarters of all households in Germany will have no more than two persons.