Why is Purina betting on China and emerging markets?

The Swiss multinational revealed that its pet segment is witnessing “a lot of opportunities in Asia, and more specifically in China.”

During the Consumer Analyst Group of New York (CAGNY) conference, Nestlé CFO François-Xavier Roger said they see “a large opportunity” in the region. “More and more younger people [have] small dogs or cats in their apartment, and they’re very digital savvy, which can help us a lot,” he said. 

“We are investing, we already have an industrial base there, but these are really territories where we invest with significant ambitions going forward,” he added. 

Roger admitted that Purina still has a “relatively low position” in China and Asia but is growing organically. 

The potential of emerging countries

Nestlé’s CEO pointed out that Purina has difficulties meeting the current demand. The multinational plans to invest CHF3 billion (€3B/$3.21B) until 2025 in production units in Thailand, China, and Brazil. This will be complemented with “very large investments” in the US.

The CEO added that Nestlé foresees an “extremely positive” trend in its organic growth outlook for the near future, mainly due to the constant increase in pet population at a yearly rate of 2 to 3%. 

François-Xavier Roger highlighted the growth potential in emerging markets as more pet owners feed their animals with commercial food rather than food table. In the past 10 years, the consumption of proceeded food rate grew by 7%; he says, “1% for emerging markets means $1 billion (€942.7M) of additional market value.”

E-commerce strategy 

Purina Petcare is placing its bets on e-commerce, which Roger said accounts for one-fourth of its total sales worldwide. 

“We expect to continue investing and increasing our participation to that growth driver,” he noted. 

Nina Leigh Krueger, Chief Executive Officer and President at Purina North America, added that the pet food manufacturer hopes to boost its online sales to 30% by 2025