ASIAN TRENDS IN PET FOOD AND PET HEALTH VIV ASIA BANGKOK 16 March 2017 Emil Fazira Senior Analyst Food & Nutrition, Singapore Introduction Pet Owners in Asia Pet Care Overview Health and Wellness in Pet Care Prospects ASIAN TRENDS IN PET FOOD AND PET HEALTH Research Coverage © Euromonitor International 3 ASIAN TRENDS IN PET FOOD AND PET HEALTH Research Expertise Consumer Products Alcoholic Drinks Nutrition Apparel Packaged Food Automotive Personal Accessories Beauty and Personal Care Pet Care Consumer Appliances Consumer Electronics Consumer Health Eyewear Soft Drinks Tissue and Hygiene Tobacco Toys and Games Fresh Food Services Health and Wellness Home and Garden Home Care Consumer Finance Consumer Foodservice Institutional Channels Hot Drinks Luxury Goods Ethical Labels © Euromonitor International Retailing Supply Ingredients Packaging Economies Business Dynamics Cities Economy, Finance and Trade Industrial Consumers Digital Consumer Households Income and Expenditure Lifestyles Population Travel 4 Introduction Pet Owners in Asia Pet Care Overview Health and Wellness in Pet Care Prospects PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Urbanisation is a major factor supporting pet care Urban Population Growth, 2011-2021 0.8% 0.1% 1.1% 2.4% 1.3% Stronger growth 3.3% 1.8% Weaker growth 1.5% Decline in no. of children per household in APAC, 2016 © Euromonitor International 3% Growth of apartments as dwelling, APAC 2011-2021 6 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Characteristics of pet owners reflect the new consumerism too © Euromonitor International 7 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Consumers in Asia are investing more into health and wellness Health and Wellness Food & Beverages, 2016-2021 Forecast CAGR % Per Capita Market Size Asia Pacific © Euromonitor International North America Western Europe Latin America Middle East and Africa Eastern Australasia Europe 8 US$21 billion Health and Wellness Food and Beverage in APAC, 2016 85% Fortified/Functional and Naturally Healthy portion of total HW 5% CAGR growth of HW in APAC, 2016-2021 US$42 billion Vitamins and Dietary Supplements in APAC, 2016 29% Herbal/Traditional Products portion of total Consumer Health in APAC, 2016 5% CAGR Growth of Paediatric Consumer Health, APAC 2016-2021 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Developments in human health food and healthcare replicated for pets Traditional medicine • Formalisation by the WHO • Botanical options • Cultural positioning Naturally Functional • Plant-based food with intrinsic benefits • Novel ingredients • Sustainably sourced ingredients Targeted Positioning • Claims addressing health issues • Fortifications targeting specific health conditions © Euromonitor International 11 Introduction Pet Owners in Asia Pet Care Overview Health and Wellness in Pet Care Prospects US$12 billion Pet Food & Products in APAC, 2017 65% Dog and Cat Food % of total Pet Care in APAC, 2017 8% CAGR growth of Pet Care in APAC, 2017-2022 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Dogs are typically preferred but cats are more suited for urban lifestyles Growth of Cat and Dog Food, APAC 2017 Cat Population Share of Total Dogs & Cats Population in Asia by Market, 2017 10% 8% 6% 4% 2% Cat population % share of total dogs & cats: <50% 50-70% >70% © Euromonitor International 0% Cat food Value Dog food Volume 14 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Emerging markets lead growth, but developed markets lead innovation Value Growth of Dog and Cat Food, 2017 40% Developed markets Emerging markets 30% 20% 10% 0% JP SG HK KR Ciao collageninfused wet cat treat by Inaba Foods Co Ltd © Euromonitor International MY APAC TW PH Nutripe limited edition Blackfoot Abalone & Chicken with Green Lamb Tripe Formula ID TH VN IN CN AnisuWater by Pet Odor Busters containing clover tree extract, mushroom extract, basil, parsley, Actinidia Polygama etc. 15 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Potential for pet food is expanding rapidly beyond core meals to treats 40% Value CAGR of Pet Treats in APAC, 2017-2022 China, 35% 35% Seeds by Seeds Taiwan Co Ltd (Taiwan) - No added colours - Affordable option for better quality and healthier alternative 30% 25% 20% 15% Thailand, South 14% Korea, 11% Kit Cat Purr Purree by Kit Cat International Trading (Philippines) - Grain-free, 100% natural - Omega 3&6, Taurine, Prebiotics, Vitamin E Taiwan, 20% 10% Milk-Bone Good Morning Daily Vitamin Treats by Big Heart Pet Brands (USA) - DHA, Vitamin C, Glucosamine - Real chicken as no. 1 ingredient 5% 0% Cat treats © Euromonitor International Dog treats 16 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Retail pet healthcare and dietary supplements face stiffer competition 8% Value Growth of Pet Products by Type in APAC, 2012-2022 Fur Magic Soap Philippines 6% 4% Nurture Pro Tofu Cat Litter Singapore 2% 0% Cat Litter Other Pet Products 2012-2017 CAGR © Euromonitor International Pet Pet Dietary Healthcare Supplements 2017 2017-2022 CAGR 17 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Key trends behind the numbers in 2017 Polarisation Indulgence Family © Euromonitor International Trading down to basics Beginnings of premiumisation Habits of snacking and reward Humanisation Rising consumer sophistication Pampering of furkids 18 Introduction Pet Owners in Asia Pet Care Overview Health and Wellness in Pet Care Prospects PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Multiple options available for improvements to pet health 1 2 3 Therapeutic Pet Food • Veterinary-only and recommended • Specific health condition • Science-based formulation Pet Healthcare and Dietary Supplements • Directly treats a pet’s health condition • Maintains and complements a pet’s daily diet Specialty Pet Food • Includes natural, organic, grain-free, holistic, limited ingredients, carnivore diets, etc. • May have claims and endorsements by vets © Euromonitor International US$3 bn Across 10 markets globally, 2017 US$5 bn Globally, 2017 US$31 bn Premium Dog & Cat Food globally, 2017 20 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Therapeutic pet food growth is slower in developed markets Value Sales, USD million Therapeutic Pet Food in Selected 10 Markets Globally, 2017-2022 1.800 9% 1.600 8% 1.400 7% 1.200 6% 1.000 5% 800 4% 600 3% 400 2% 200 1% 0 0% Russia Spain Mexico UK Germany Market Size Brazil France Japan Italy US CAGR 2017-2022 Data collected is based on 10 selected markets © Euromonitor International 21 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Top three companies hold majority market share of therapeutic pet food Global Sales of Therapeutic Pet Food by Company, 2017 Colgate-Palmolive Co Mars Inc. Nestlé SA Others Data collected is based on 10 selected markets © Euromonitor International 22 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Types of pet healthcare differ greatly across APAC Pet Healthcare by Type in Value, 2017 100% 80% 60% 40% 20% 0% KR JP TW IN Flea/Tick Treatments © Euromonitor International TH HK MY VN Worming Treatments SG CN PH Other Products 23 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Premiumisation and segmentation are more evident in pet healthcare Rise of prescription-only, cannibalising overthe-counter sales Life expectancy of dogs rose to a record high of 13.2 years in 2014. - Tokyo University of Agriculture and Technology and the Japan Small Animal Veterinary Association Japan 42-50% of dog and cat food are targeted for senior pets in 2017, highest in Asia © Euromonitor International Pet ageing Weakening joints Excess weight Vision health Urinary health Life expectancy of cats in the US rises by 10% in a decade, while that of dogs rises by 4%. - 2013 Banfield State of Pet Health Report 24 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Non-Science based specialty pet food is booming worldwide Grain-free Limited Ingredients Examples of specialty positionings Holistic and Natural Carnivore © Euromonitor International 25 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Product launches in Asia tend to prioritise quality and ingredients iti Biti Beef Recipe iti Biti Pet Food Co Singapore November 2016 USD 50 per 1kg I Pet Milk Seoul Dairy Corp South Korea January 2017 USD 2 per 180ml VetiveLife Cordyceps Green Spring China Ltd Hong Kong January 2015 USD 51 per 33g GMO & grain-free, free-range Parsley, green lipped mussel, dried chicory Lactose-free Yucca extract, calcium, Taurine, collagen, vitamins Contains cordyceps Claims to improve health issues, e.g. incontinence © Euromonitor International 26 Introduction Pet Owners in Asia Pet Care Overview Health and Wellness in Pet Care Prospects US$17 billion Pet Food & Products in APAC, 2022 72% Dog and Cat Food % of total Pet Care in APAC, 2022 China Strongest value CAGR of 21% for 2017-2022 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Premiumisation expected to be more prominent by 2022 Value CAGR of Pet Food by Price Tier in APAC, 2017-2022 18% 12% 16% 10% 14% 12% 8% 10% 6% 8% 6% 4% 4% 2% 2% 0% 0% Economy Cat Food © Euromonitor International Mid-priced Dog Food Premium Overall Cat and Dog Food 29 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS Sustainability claims, gourmet diets, and further segmentation expected 2 Novel ingredients supporting specialty claims 1 Sustainability claims 3 Customised and specific © Euromonitor International 30 PET OWNERS IN ASIA / PET CARE OVERVIEW / HEALTH AND WELLNESS IN PET CARE / PROSPECTS New consumerism will prevail - Pampering and premiumisation - Back to basics - Time and financial investment - Humanisation © Euromonitor International 31 CONTACT DETAILS Emil Fazira Senior Analyst Food & Nutrition, Singapore emil.fazira@euromonitor.com +65 6429 0590 ext. 6741
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