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Sector Trend Analysis – Pet food trends in Mexico

August 2018

Executive summary

At 124 million, Mexico has the eleventh-largest population in the world and the second-largest in Latin America, behind Brazil. The population is expected to reach 130 million by 2023.

At US$ 1.2 trillion, Mexico is the world's fifteenth and Latin America's second largest economy, behind Brazil. Gross domestic product (GDP) is forecast to increase to 1.6 trillion in 2023.

Mexico's pet food market is worth US$2.1 billion (2017) and forecast to increase by 8.3% to US$3.1 billion in 2022. Sales are dominated by dog and cat food with sales growth rooted in pet health and wellness trends that are driven by consumers' interest in providing pets with healthy and active lifestyles. Common claims for dog and cat food products focus on teeth and tartar prevention, digestion and urinary tract, and skin and coat benefits.

Pet food for birds, fish, small mammals and reptiles represents less than 1% of the market, but is a growing segment, especially in bird and fish food, driven primarily by changing demographic and lifestyle trends.

Mexico's pet food imports are dominated by the United States at 71.5% and Canada at 27.2% of total imports. Canada is Mexico's primary source for bird food imports (Canary seed), accounting for 100%, valued at Can$26.6 million.

Growth in the Mexican pet food market is expected to continue as pet owners increasingly feed their pets prepared food instead of unprepared food (table scraps). The highest potential for growth is in dog food, followed by cat food, which is a more saturated segment.

Pet population

The pet population in Mexico was estimated to be 40.6 million animals in 2017. The most common pets in Mexico are dogs (70.6%), followed by cats (21.8%), and other pets (7.6%) consisting mostly of birds and fish. Around 80% of Mexican households owned a pet in 2017, with 41.5% of Mexican households owning a dog and 16.5% owning a cat.

Dogs will continue to be Mexican's preferred pet, specifically small dogs. By 2022, small dogs are forecast to represent 66.0% of the total dog population, with large dogs accounting for 6.0%. Pet ownership in Mexico is mainly driven by the demographic trend of lower rates of marriage and decreasing birth rates. This is leading to the adoption of pets as substitutes for having children. Pets are subsequently treated as family members, which is leading to the "humanization" of pets.

Over time, Mexicans are expected to have smaller living spaces, due to the increasing trend of vertical living (apartments), not only in Mexico City, but also in other large cities such as Monterrey, Guadalajara and Querétaro, and more active lifestyles, which could be complemented with a small dog.

Pet population in Mexico 2013-2017 '000s of animals
Category 2013 2014 2015 2016 2017
Dog population 24,264.8 25,187.3 26,250.2 27,468.2 28,719.6
Cat population 7,944.0 8,095.9 8,274.8 8,547.8 8,872.7
Bird population 1,356.4 1,371.5 1,386.8 1,402.3 1,417.9
Fish population 1,268.3 1,285.7 1,303.4 1,321.3 1,339.4
Small mammal population 256.0 260.1 264.3 268.5 272.8
Reptile population 64.0 65.0 66.1 67.1 68.2
Total population 35,153.5 36,265.5 37,545.6 39,075.2 40,690.6

Source: Euromonitor International 2017

Retail market size

Pet food retail sales are mainly driven by the "humanization" of pets, specifically, greater consumer awareness of the types of food that they give to pets and the benefits they have on pets' health and wellbeing. The industry is responding to this trend by creating healthy products for all kinds of pets – dogs, cats and other pets. These products have added nutrients, vitamins and minerals designed to provide a healthy pet lifestyle that takes into account their lifecycle needs.

Pet food in Mexico had retail sales of US$2.0 billion in 2017, with over US$1.6 billion spent on dog food, US$366.0 million on cat food, and US$22.8 million on other pet food. The historic retail compounded annual growth rate of pet food in Mexico was 8.9% from 2013 to 2017. The pet food sector in Mexico is expected to continue its sales growth of 8.3% from 2018 to 2022, reaching US$3.1 billion in 2022.

Historic retail value sales of pet food in Mexico (US$ millions)
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Cat food 235.8 273.1 305.4 333.0 366.2 11.6
Dog food 1,218.0 1,343.5 1,444.8 1,567.0 1,679.9 8.4
Bird food 11.3 12.2 12.5 12.6 13.1 3.8
Fish food 12.8 15.1 16.5 16.9 17.5 8.1
Small mammal/reptile food 1.6 1.9 2.0 2.1 2.2 8.3
Total pet food 1,479.5 1,645.8 1,781.2 1,931.6 2,078.9 8.9

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Forecast retail value sales of pet food in Mexico (US$ millions)
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Cat food 406.7 448.2 492.7 540.4 591.8 9.8
Dog food 1,811.8 1,963.8 2,121.8 2,289.0 2,469.0 8.0
Bird food 13.6 14.4 15.3 16.2 17.2 6.0
Fish food 18.0 18.8 19.6 20.5 21.5 4.5
Small mammal/reptile food 2.3 2.4 2.5 2.6 2.7 4.1
Total pet food 2,252.4 2,447.6 2,651.9 2,868.7 3,102.2 8.3

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

As in previous years, the top pet food companies operating in Mexico in 2017 were Mars Inc. with 35.3% market share, with its brands of Pedigree and Whiskas, followed by Nestlé SA (21.0%) with their brands of Purina Beneful and Purina Fancy Feast/Gourmet. Other companies collectively saw its market shares increase from 16.0% to 18.5% between 2015 and 2017. From the available data, it is impossible to identify specific companies within this category and how they individually performed.

Mexico pet food: company retail market share by value (%)
Market player 2015 2016 2017
Mars Inc 39.3 38.1 35.3
Nestlé SA 20.5 20.8 21.0
Others 16.0 16.9 18.5
Private label 8.7 8.5 8.2
Neovia 7.0 7.7
Nueva Tecnología en Alimentación SA de CV 2.8 3.4 3.7

Source: Euromonitor International 2017

Market segmentation

Dog food

Dog food sales saw steady growth between 2013 and 2017 at a compound annual growth rate of 9.7%, which is expected to continue at 9.6% between 2018 and 2022. Dry dog food makes up the majority of overall dog food sales at 89%. Wet dog food represented 6.0% of total value sales of dog food in 2017, but saw faster growth at 11.3% in compound annual growth rate terms. This was mainly driven by the benefits wet dog food provides, especially easy handling and the freshness of the product.

Premium dog food and dog treats are expected to be the primary drivers of future growth. Manufacturers are broadening product ranges by targeting specific breeds, sizes, and ages, with adult dog and cat food making up the largest segment at 25.9% of retail sales in 2017, followed by puppy/kitten food (12.3%), and senior dog/cat food (3.3%). Non age specific dog/cat food represented 58.5% of retail sales. Sales of therapeutic dog food have also increased; however, it is a smaller niche product due to high prices.

Mexico dog food: retail market segmentation by value (US$ millions)
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Dry dog food 1,099.6 1,213.8 1,298.7 1,406.5 1,504.7 8.4
Wet dog food 77.1 81.9 93.2 102.6 111.7 11.3
Dog treats and mixers 41.3 47.8 52.8 58.0 63.4 8.2
Total dog food 1,218.0 1,343.5 1,444.8 1,567.0 1,679.9 9.7

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Mexico dog food: forecast retail market segmentation by value (US$ millions)
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Dry dog food 1,620.3 1,753.6 1,891.7 2,037.2 2,193.3 8.0
Wet dog food 121.9 133.8 146.6 160.7 176.2 9.3
Dog treats and mixers 69.6 76.4 83.5 91.2 99.5 7.9
Total dog food 1,811.8 1,963.8 2,121.8 2,289.0 2,469.0 9.6

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Cat food

Cat food sales grew at a compound annual growth rate of 11.6% from 2013 to 2017 and are expected to grow by 9.8% from 2018 to 2022. Dry cat food will continue to constitute the majority of the overall cat food sales at 78.4% of overall sales, followed by wet cat food with 17.0% market share.

Segmentation and specialized products will continue to prevail in the cat food market in Mexico. Premium cat food will be a major driver of overall cat food sales growth. Sales of cat treats were driven by an increase in the sales of functional and premium products and the pet "humanization" trend in Mexico. Sales of economy wet cat food are expected to grow due to the rising popularity of private label products.

Companies are developing products that can help with cat health issues, such as weight control, the immune system and providing a balanced diet with added nutrients. These products give consumers the option to decide which one is more effective for their cat's specific needs, as they become more aware of the benefits these can provide. Products featuring specific health benefits are expected to perform especially well.

Mexico cat food: retail market segmentation by value (US$ millions)
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Dry cat food 189.0 219.8 243.4 264.2 287.2 11.0
Wet cat food 36.6 41.4 48.6 54.1 62.4 14.3
Cat treats and mixers 10.2 11.9 13.4 14.7 16.6 12.9
Total cat food 235.8 273.1 305.4 333.0 366.2 11.6

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Mexico cat food: forecast retail market segmentation by value (US$ millions)
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Dry cat food 316.5 347.3 380.2 414.9 451.9 9.3
Wet cat food 71.9 80.8 90.5 101.3 113.2 12.0
Cat treats and mixers 18.3 20.1 22.0 24.2 26.7 9.9
Total cat food 406.7 448.2 492.7 540.4 591.8 9.8

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Other pet food

Birds and fish are most popular alternative pets to dogs and cats in Mexico, representing almost 94% of other pet sales. This is mainly driven by demand from smaller households, especially in urban areas, where people are either not allowed dogs or cats or have limited living space.

Total sales increased at a compound annual growth rate of 8.3% from 2013 to 2017 and are expected to grow by 4.1% from 2018 to 2022. Sales growth is expected to be driven in part by other pet owners who are demanding healthier products with added vitamins, minerals and other nutrients.

The expansion of pet food shops and superstore retailers is also expected to drive future sales of these products. These retailers are popular for providing most pet products in just one store and the expansion of these retailers has led to an increase in selling space for other pet food.

Mexico other pet food: retail market segmentation by value US$ millions
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Bird food 11.3 12.2 12.5 12.6 13.1 6.2
Fish food 12.8 15.1 16.5 16.9 17.5 3.8
Small mammal/reptile food 1.6 1.9 2.0 2.1 2.2 8.1
Total other pet food 25.7 29.2 31.0 31.6 32.7 8.3

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Mexico other pet food: forecast retail market segmentation by value US$ millions
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Bird food 13.6 14.4 15.3 16.2 17.2 5.1
Fish food 18.0 18.8 19.6 20.5 21.5 6.0
Small mammal/reptile food 2.3 2.4 2.5 2.6 2.7 4.5
Total other pet food 33.9 35.6 37.4 39.3 41.4 4.1

Source: Euromonitor International 2017

*CAGR: Compound annual growth rate

Distribution channels

Pet food distribution in Mexico is primarily done through grocery retailers (independent/traditional grocers, super/hyper markets, convenience stores), which accounted for 70% of pet food sales in 2017. Non-grocery specialists such as pet superstores and pet shops combined for 16.0% of sales, followed by veterinary clinics (7.0%) and warehouse clubs (7.0%).

Independent/traditional grocers make up the largest sales distribution channel for pet food, at 40.0% of all grocery retailers. This channel benefits from a wide presence of almost 749,000 stores across the country and tailors their range of products to local consumers, with outlets in low-income neighbourhoods, for example, offering small package sizes that are affordable to price-sensitive consumers. Many low-income consumers lack personal transport and prefer outlets based close to home and work, with convenient locations in residential areas resulting in established customer loyalty for this type of retailer.

Modern grocery retailers are seeking to emulate independent/traditional grocers' core strengths, with a growing focus on convenient locations and small package sizes. Convenience stores and discounters are proving successful with this strategy. For example, Wal-Mart, through its Bodega Aurrera Express chain, is increasingly focusing on low priced products offered in smaller formats near residential locations, resulting in a relatively lower price for both branded and private label products. Convenience stores are also expanding outlet volume, also with a focus on convenient locations in residential areas. These stores are also benefiting from offering value-added services that traditional grocery retailers cannot match, such as receiving bill payments and banking deposits.

Mexico pet food sales by distribution channels in % in 2017
Description of this image follows.
Description of above image
Mexico pet food sales by distribution channels in % in 2017
Distribution channel Sales (%)
Independent small grocers 40
Modern grocery retailers 30
Non-grocery specialists 16
Veterinary clinics 7
Warehouse clubs 7

Source: Euromonitor International 2017

Mexican imports

In 2017, Mexico's total dog, cat, and bird food imports exceeded Can$161 million, led by the United States and Canada, representing 71.5% and 27.2% of total imports in 2017. France, the Netherlands, Spain, and Poland were the next leading suppliers. Mexico enjoys free trade with these source countries through the North American Free Trade Agreement (NAFTA) and the European Union-Mexico Global Agreement.

Canada is Mexico's primary source for bird food (canary seed) imports, accounting for 100% of imports. In 2017, bird food imports from Canada were valued at Can$26.6 million.

Mexico import statistics of dog and cat food and bird seed for retail sales (Harmonized System code: 230910, 100830) (Can$)
Country 2013 2014 2015 2016 2017
United States 75,415,942 77,192,521 88,330,311 99,515,653 115,559,900
Canada 48,646,076 47,641,010 50,470,551 45,058,669 44,012,622
France 848,334 800,793 784,256 910,879 1,126,229
Netherlands 0 18,895 646,418 765,430 857,273
Spain 0 266 0 0 73,210
Poland 0 50,199 63,727 26,806 30,296
Colombia 1,825 838 866 1,502 1,067
Italy 0 0 0 0 81
Total 124,968,843 125,784,403 140,465,380 146,998,779 161,660,678

Source: Global Trade Tracker 2018

Product launch analysis

Increasing awareness of dietary health is shaping the Mexican pet food industry overall. Companies have been developing different kinds of pet foods with more vitamins and minerals than before, specialised food for the treatment of some health issues, food with only natural ingredients, fewer preservatives and added nutrients. Most of these products are part of the ranges of premium brands and although their prices are higher than for other brands, pet owners appear willing to purchase them.

The most commonly used claims in 2017 for dog and cat food products are "Pet-adult", which made up 17.9% of total claims, followed by "other (functional pet)" with 9.4%, and "teeth and tartar prevention" with 8.8%.

Number of pet food product launches by claim in Mexico in 2017
Claim Number of products
Pet - adult 85
Other (functional pet) 45
Teeth and tartar prevention (functional pet) 42
Skin and coat (functional pet) 39
Digestion and urinary tract (functional pet) 35
No additives/preservatives 31
Joints, bones and muscles (functional pet) 30
Vitamin/mineral fortified 30
Premium 24
Social media 24
Other 89
Total 474

Source: Mintel Global New Products Database (GNPD) 2018

In 2017, there were 150 new pet food product launches in the Mexican market. Out of these, 34.6% were new varieties or range extensions and 27.3% were completely new products. Approximately 42% of the total launches were in the dog snacks and treats category, 24.6% in the dry dog food subcategory and 16.0% in the wet dog food category.

Number of new pet food product launches in Mexico in 2017, by type
Top five launch types Number of products
New variety/range extension 52
New product 41
New packaging 37
Relaunch 17
New formulation 3
Total 150

Source: Mintel GNPD 2018

Number of new pet food product launches in Mexico in 2017, by category
Top five categories Number of products
Dog snacks and treats 63
Dog food dry 37
Dog food wet 24
Cat food wet 14
Cat food dry 9
Other 3
Total 150

Source: Mintel GNPD 2018

Product examples

Ideal Weight Super Premium Adult Dog Food
Company Malta Texo de Mexico
Brand Neovia FullTrust
Sub-category Dog Food Dry
Country of manufacture Mexico
Store name Petco
Store type Specialist Retailer
Date published March 2018
Launch type New Product
Price in local currency MXN248.25
Price in US Dollars 13.10
Chicken and Barley Entrée for Adult Dogs
Company Hill's Pet Nutrition
Brand Hill's Science Diet
Sub-category Dog Food Wet
Country of manufacture United States
Store name +Kota
Store type Specialist Retailer
Date published May 2016
Price in local currency MXN50.00
Price in US Dollars 2.95
Natural Premium Treats for Dogs
Company Proveedora Nader
Brand Zizoo Pet Shop
Pet's Club
Category Pet Food
Sub-category Dog Snacks and Treats
Country of manufacture Mexico
Store name Sumesa
Store type Supermarket
Date published April 2018
Launch type New Product
Price in local currency MXN42.90
Price in US Dollars 2.29
Poached Salmon & Spinach Medley Premium Cat Food in Sauce
Company Hill's Pet Nutrition
Brand Hill's Science Diet
Healthy Cuisine
Sub-category Cat Food Wet
Country of manufacture United States
Store name +Kota
Store type Specialist Retailer
Date published December 2017
Price in local currency MXN28.00
Price in US Dollars 1.50
Chicken & Salmon Flavored Premium Kitten Food
Company Nestlé
Brand Purina Cat Chow
Defense Nature
Category Pet Food
Sub-category Cat Food Dry
Country of manufacture Mexico
Store name Cabanzo
Store type Traditional Retail Outlet
Date published October 2017
Price in local currency MXN105.00
Price in US Dollars 5.92
Savory Salmon Recipe Flavored Soft Treats for Cats
Company Zuke's
Brand Zuke's Natural Purrz
Sub-category Cat Snacks and Treats
Country of manufacture United States
Store name H-E-B
Store type Supermarket
Date published December 2017
Launch type New Variety/Range Extension
Price in local currency MXN99.00
Price in US Dollars 5.31

Opportunities

Demand for healthier products is expected to continue to increase in Mexico as consumers become increasingly concerned about providing an adequate diet for their pets. In addition to pet "humanization", demand for healthier products is also driven by a rising number of cases of obese dogs and cats in the country. For example, experts on this issue estimate that 25% of dogs in Mexico have this problem and, consequently, other related health issues, such as diabetes and heart disease. Accordingly, companies are offering pet foods designed to prevent disease, or minimise damage if they are already present.

Growth in the Mexican pet food market is also expected to continue as pet owners continue to increasingly feed their pets prepared food instead of unprepared food (table scraps, etc.). The highest potential for growth is in dog food, where 72% of pet dogs in Mexico derive their nutritional requirements from unprepared food, leaving only 28% of dogs consuming prepared food. The cat food segment is more saturated, where 63% of cats consume prepared food, leaving 37% consuming unprepared food.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

For additional information on Foro Mascotas Mexico 2018, please contact:

Juan-Carlos Munoz
Trade Commissioner
Embassy of Canada to Mexico
juan-carlos.munoz@international.gc.ca

Resources

Sector Trend Analysis: Pet Food Trends in Mexico
Global Analysis Report

Prepared by: Kris Clipsham, International Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2018).

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