The Philippines: Steadily growing demand in this up- and-coming market
New brands are entering the Philippine market to meet the growing demand for commercial pet food as pet parents’ feeding behavior shifts.
Despite the lack of official figures, experts believe that currently, the local Philippine pet industry is worth around PHP6 billion ($108M). They see a promising future ahead, thanks to an increase in spending and the high penetration of online sales.
Top 7 worldwide in number of dogs
The Philippines is in the top 7 countries worldwide with the highest dog population. It is estimated that there are more than 20 million dogs and 8 million cats.
According to Rakuten Insight, the Philippines has the highest number of dog owners in the Asian region (67%). Interestingly also, more than 4 out of 10 pet parents have a cat, followed by birds (10%).
Blessie Zarzuela, a pet food market expert for 15 years, believes that the market will continue to grow by 6% every year due to the increase in pet ownership. Other projections cite a growth of as much as 7% over the next decade.
Most dogs (65%) and cats (83%) in the country are fed fresh human-quality food, according to pet food manufacturer Pilmico. 12% of canines and 7% of felines are fed commercial pet food. However, it is forecast that, increasingly, pet owners will shift to manufactured pet food options.
The National Capital Region (Metro Manila) accounts for the highest volume of commercial pet food sales nationwide, with percentages of between 60% to 70%.
Local pet food producers
According to the Department of Agriculture’s Bureau of Animal Industry (BAI), there are 47 local pet food manufacturers and 111 foreign companies (most of which are US-based) importing pet food to the Philippines.
The good news is that the pet food category is gaining traction in this country and, as a result, the number of local pet food manufacturers is on the rise. Importantly, some larger companies are investing in the category to boost local production and make the country less dependent on imports.
Already in 2020, Pilmico Foods, the country’s top agricultural food producer, launched its first dog food product: Maxime. This launch was done in partnership with the e-commerce platform Shopee. In February 2022, Pilmico expanded their portfolio to cats and they expect to further expand their product offerings and grow their market share by 2030.
In 2021, Philippine food processing company Century Pacific Food (CNPF) entered the pet industry with the launch of a new brand of cat food named Goodest.
“We think we have found an attractive opportunity where we can offer compelling value to the market. We see this as a strongly synergistic and growth business unit which can leverage our manufacturing and brand-building know-how,” says Alexander Lim, CNPF’s General Manager for Pet Food.
Another local player is Pet Express. It is one of the largest pet retailers in the country offering dog and cat supplies, grooming and veterinary services. They have more than 20 stores nationwide.
Consumer behavior
Nearly 3 out of 10 pet owners in the Philippines spend more than 500 ($9) per month on their pets, according to Statista. The data company estimates that Filipino pet parents spent $124 million on pet food in 2022, an increase of 16.3% against 2021.
According to data from local pet food producer Pimlico, the offline channel – grocery retailers and pet stores – dominated sales, accounting for 84% of all purchases in 2021. The percentage of online pet food purchases was up to 11% in 2021: 2% more than the previous year.
Room for growth in e-commerce?
The sale of pet products through online channels more than doubled in 4 years. According to Euromonitor, total online pet category sales reached $4 million in 2017 and jumped to $9.9 million in 2021. This equals an annual increase of more than 25%.
The Philippine government recently launched a roadmap initiative to promote e-commerce adoption among small and medium enterprises (SMEs). The intention is to boost consumer confidence in online shopping. It is expected that this will result in more online purchases by pet parents in the near future.
It is forecast that online sales of pet products will reach $16.3 million by 2026.