Pet products market analysis

The US$27 billion (€23.9 billion) global pet products market may be less dynamic than its pet food counterpart, but a trend towards premiumisation is still evident, particularly in such products as apparel, accessories and electronic gadgets.

Global value sales

Global real value sales of pet products exhibited a real compound annual growth rate (CAGR) of 2% between 2010 and 2015, to reach US$27 billion (€23.9 billion), according to Euromonitor International data. This category consists of cat litter, pet healthcare, pet dietary supplements and other pet products (everything from clothing and collars to bedding, bowls and electronic gadgets for pets). North America accounted for more than half of global value sales of pet products in 2015, with Western Europe accounting for almost a quarter and Japan and China a further 5% and 4%, respectively. Latin America is the most dynamic market, with a real CAGR of 7% between 2010 and 2015, followed by China (a real CAGR of 5%).

Cat litter demand

Demand for cat litter remains quite limited outside of developed economies. North America, Western Europe, Japan and Australia accounted for 91% of value sales during 2015. Cat litter is fairly mature

in these markets, with a real CAGR of 2% between 2010 and 2015. What growth there has been in this product area is driven in large part by a desire for convenience and increased consumer interest insustainability.

Cat litter has traditionally been made from clay, but biodegradable litters made from renewable plant sources, ranging from pine wood pellets and recycled newspaper to walnut shells and corn cobs, are growing in popularity. In terms of convenience, Nestle has launched Purina Tidy Cats LightWeight, which it markets as ‘half the weight of the leading clumping litter’.

Decline in pet healthcare

Global value sales of pet healthcare actually declined in real terms between 2010 and 2015, exhibiting a CAGR of -1%, to fall to US$4 billion (€3.5 billion). This was due to a sharp contraction in the North American market, which saw real value sales decline by 18%, during this period. The factors behind this decline include the growing popularity of prescription medications like Sanofi’s Nexgardin the flea and tick treatment space (Euromonitor International data only cover over-the-counter sales in pet healthcare), in addition to a surge in the popularity of private label flea and tick medications.

Demand for dietary supplements

Global value sales of pet dietary supplements exhibited a real CAGR of 2% between 2010 and 2015, to reach US$1.2 billion (€1.1 billion). Real value sales declined in Western Europe amid difficult economic conditions, while they exhibited a real CAGR of 2% in North America, to reach US$743 million (€655 million). Demand for pet dietary supplements in North America was boosted by the growing popularity of raw dog and cat food bands, which, unlike many other products in this category, are notfortified with vitamins and minerals.

Other pet products

Real value sales of other pet products exhibited a CAGR of 3%, between 2010 and 2015. Doting pet ‘parents’ are driving growth in demand for pet products and accessories, while branded products are growing in popularity as owners increasingly perceive their pets to be an extension of their own personality. As a result, they are increasingly buying their pets premium items, ranging from Louis Vuitton collars to the jerseys of their favourite sports teams.

The emerging pet gadgets space is particularly dynamic. This covers everything from activity trackers like FitBark to toys and feeders that can be controlled remotely via smartphone, such as PetCube and Petnet’s SmartFeeder. These items appeal to affluent owners who spend a lot of time away from home and/or are anxious to ensure that their pets are being adequately fed and stimulated.

Global growth engine

Euromonitor International forecasts that pet products will continue to exhibit a real CAGR of 2% between 2015 and 2020, to reach US$30 billion (€26.4 billion). North America will remain the engineof growth, with the Western European market picking up somewhat as economic conditions improve. Pet dietary supplements is set to be the most dynamic area (with a real CAGR of 4% to reach US$1.5 billion – €1.3 billion), with these products increasingly becoming a regular purchase for North American owners (a real CAGR of 5% to reach US$931 million – €820 million) concerned about the health and wellness of their pets.