Sector Trend Analysis – Pet food trends in India

Pet population and ownership

The pet population in India has increased by a CAGR of 11.0% from 14.5 million pets in 2014 to 22.1 million in 2018. The pet population will continue to grow from 2019 to 2023, with a CAGR of 9.6%.

In 2018, pet dogs accounted for 88.0% of the pet population with the highest CAGR of all pets of 11.4% from 2014 to 2018. The dog population will continue to increase at a CAGR of 10.0% from 2019 to 2023, reaching 31.4 million by 2023. The cat population had the second largest growth, at a CAGR of 9.0% from 2014 (1.2 million) to 2018 (1.7 million), while the fish population had the third largest growth at a CAGR of 7.7%. The small mammal population and reptile population had low growth at a CAGR of 0.8% from 2014 to 2018 and is projected to have the same CAGR of 0.8% from 2019 to 2023.

In 2018, India experienced dog ownership growth at a CAGR of 9.4% from 2014 to 2018. This growth reflects an increase from 11.8 million households owning dogs in 2014 to 16.9 million households in 2018. The percentage of households owning dogs increased from 4.5% in 2014 to 6.0% in 2018. The number of households owning cats increased from 1.1 million in 2014 to 1.3 million in 2018.

Retail market size

Major factors driving demand for pet food in India include increasing pet ownership, rising per capita disposable income and rising number of nuclear families, particularly in urban areas. In India, pet food predominantly includes packaged, ready-to-eat food products that are manufactured to provide complete nutrition to pets.

In line with the growing trend to humanize pets and the general desire to extend their life expectancy, many pet owners have started to regularly use pet healthcare and pet dietary supplement products. They are switching from traditionally home-made pet food to commercial packaged pet food with more nutritional ingredients. Pet owners feel it is more convenient to use pet food which saves their time too.

The retail sales value of the pet food market in India has doubled from US$139.0 million in 2014 to US$284.8 million in 2018 and is projected to double again to US$587.0 million by 2023. Every category will continue to contribute to the growth of pet food sales in India. In 2018, dog food accounted for the majority of the pet food market at 97.5%, followed by cat food at 2.3% and other pet food at 0.2%.

Company shares

In 2017, although over half of Indian pet food purchases were made from Mars Inc., its CAGR fell to −2.4% from 2013 to 2017. Indian Broiler Group increased its share from 8.5% in 2013 to 12.1% in 2017 at a CAGR of 9.2%. Other pet food companies such as Stylam Sydney and Russo Mangimi SpA tried to gain market share, but accounted for less than 2.2% in 2017.

Brand shares

The top two brands, Pedigree and Royal Canin, both owned by Mars Inc., dominated the pet food market in India at 48.1%, followed by Drools by Indian Broiler Group at 12.1% in 2017. Other brands accounted for only marginal shares below 2.2% in 2017. Mars Inc. has been building credibility in India through promotional activities, awareness raising and advertising, even though the growth of Pedigree and Royal Canin decreased at a CAGR of −2.0% and −3.6%, respectively, from 2013 to 2017. Royal Canin pet food is produced in France and imported into India, and there was a shortfall in raw materials in late 2016 and early 2017.

Market segmentation

Dog food

With the increase in the dog population, dog food in all price ranges performed well in 2018. From 2014 to 2018, dog food sales experienced a significant increase, from US$134.7 million to US$277.6 million, with a CAGR of 19.8%. Dry dog food represented 88.3% of total dog food sales in 2018, grew at a CAGR of 20.2% from 2014 to 2018 and is forecast to grow at a CAGR of 16.5% from 2019 to 2023. All categories had positive growth from 2014 to 2018 (economy dry dog food recording the highest CAGR of 23.9%) and are forecast to grow from 2019 to 2023, with the economy dry dog food category once again expected to record the highest growth of 19.3%. Premium dry dog food retail value sales grew at a rate of 13.1% in 2018. Dog treats continued to see strong growth in 2018, with a CAGR of 17.1% from 2014 to 2018.

Dry dog food: the favourite type in India

Dog owners in India consider many factors when purchasing dog food, including storage, buying in bulk versus buying smaller packages, shelf life, lifecycle needs and dietary needs. Dry dog food emerged as a clear solution, since it can be stored in a dry place at room temperature, lasts longer than wet dog food and can be bought in bulk, unlike wet dog food, which tends to come in smaller packages in India.

Increasing dog adoption boosts dog food sales

Indians have become more attached to dogs for a variety of reasons, including companionship. This is particularly apparent in cities, where pet dogs are more common and where many dog lovers adopt stray dogs and puppies as their first pet, or already own a pedigree dog, but want to adopt a second.

With their busy lifestyles, people prefer to buy in large quantities, possibly taking advantage of discounts and limiting store visits. Because Indian dog owners tend to lack knowledge about the canine diet, they are greatly influenced by veterinarians who suggest certain types and brands of dog food.

Growth leads to more international players to India

In January 2018, Nestlé announced it would launch packaged dog food in India. Starting with premium packaged dog food, the company entered India with a new entity, Purina Petcare India Pvt Ltd, which will operate as a subsidiary of Nestlé SA.

In 2017, Global pet food manufacturer Mars Inc. recorded a 53.3% share in the Indian dog food market, although its growth decreased at a CAGR of −2.5% from 2014 to 2017. Indian Broiler Group had a 12.4% market share in 2017 and a CAGR of 9.3% from 2013 to 2017. Russo Mangimi SpA had the highest CAGR of 103.1% from 2013 (0.1% share) to 2017 (1.7% share). The share of all other companies in the dog food market was below 1.3% in 2017.

The top two brands, Pedigree and Royal Canin, are owned by Mars Inc. and accounted for 48.8% market share in 2017, although both brands' growth decreased at a CAGR of −2.2% and −3.6%, respectively from 2013 to 2017. The third biggest brand, Drools (Indian Broiler Group), represented 12.4% market share in 2017 and grew at a CAGR of 9.3% from 2013 to 2017. The market share of the other brands were all below 2.3% in 2017.

Cat food

Cat ownership in India is 10 times lower than dog ownership due to religious and vegetarian reasons. Most Indians (Hindus in general) do not own cats as pets because in Hindu mythology, cats are regarded as a bad omen.

Most vegetarian families in India avoid cats as they are perceived as being strictly carnivorous, unlike dogs, which are more of an omnivore and can eat various types of food and survive in most cities and villages without much of a problem. Vegetarians consider cats to be impure since they eat only non-vegetarian food like meat, flesh, rats and other small mammals, and young birds and animals.

People who have pet cats usually feed them milk and home-made food leading to lower purchases of cat food. In addition, people believe cats are usually raised to catch mice and feed themselves. While cat lovers tend to consult veterinarians about how to feed cats and usually purchase the cat food they suggest, such cat owners are very small in number and usually live only in urban regions of India. Cats are very particular about the kind of food they consume, and cat owners are therefore often obliged to buy very specific types of cat food.

Recently, Indians living in cities have been adopting more cats as companions, often purchasing expensive foreign breeds as a status symbol. With the population of pet cats growing in India, demand for cat food is expected to increase over the forecast period.

Cat food sales grew strongly from 2014 (US$4.0 million) to 2018 (US$6.6 million) at a CAGR of 13.3% and is forecast to grow at a CAGR of 9.1% from 2019 (US$7.2 million) to 2023 (US$10.2 million). Dry cat food represented 84.8% of cat food sales in 2018 and recorded a CAGR of 14.1% from 2014 (US$3.3 million) to 2018 (US$5.6 million). In the dry cat food category, mid-priced dry cat food recorded the highest retail sales of US$4.9 million in 2018 and had a CAGR of 13.0% from 2014 to 2018. In the wet cat food category, premium wet cat food recorded the highest sales of US$1.1 million. There are many mid-priced cat food brands that compete against international counterparts. Mid-priced cat food is affordable, but over time, consumers are expected to trade up to premium food.

As the pet cat population increases, manufacturers expect that the number of cat owners will gradually increase and that more pet owners will begin to value the advice of specialist retailers. This trend is set to support the development of all types of cat food, targeting cat owners who regard their cats as family members and are concerned about the health of their pets. Cat treats and mixers have yet to pick up in India since dry and wet cat food is in its early formative stages. Treats and mixers are usually fed to pets between meals to reduce hunger pangs or sometimes to train or reward them. Since few cats are domesticated, cat treats sales have remained negligible.

Premium cat food is expected to maintain growth during the forecast period

Mars International India Pvt Ltd and Royal Canin India Pvt Ltd together dominated premium cat food value sales with most coming from dry cat food in 2017. However, the companies saw low production volumes due to lack of availability of raw materials, which resulted in their falling short of meeting the demand for Indian cat food in 2017. Hence, overall premium cat food saw much slower retail value growth in 2017. However, in the last few months of 2017, these companies invested in procuring raw materials in a timely manner to satisfy the growing needs of premium cat food across the world, including India. Many cat owners shifted from economy and mid-priced cat food to premium products, and demand for premium cat food is expected to continue to grow during the forecast period.

The top company in the cat food category, Mars Inc., accounted for 77.3% of the market share in retail sales in 2017, although its growth decreased slightly to −0.9% from 2013 to 2017. The market share of the rest of the companies was below 2.6% in 2017.

There was also considerable movement between mid-priced, economy and premium cat food based on the number of cats owned and the owners' budgets. This was due to the fact that a large group of cat owners usually feed their cats homemade food or milk and seldom purchase prepared cat food. Hence, mid-priced cat food companies like Perfect Companion Co Ltd and Indian Broiler Group saw good growth in their mid-priced cat food products in India.

The top two brands, Whiskas and Royal Canin, are owned by Mars Inc., accounting for 70.0% market share in 2017. Growth of both brands decreased slightly at a CAGR of −0.7% and −1.8%, respectively, from 2013 to 2017.

The market share of other brands were all below 2.6% in 2017. It is worth noting that the third largest brand, Drools (Indian Broiler Group), grew at a CAGR of 8.2% from 2013 to 2017.

Other pet food

The other pet food category grew well from 2014 to 2018, with a CAGR of 18.9%, and is forecast to continue at a CAGR of 16.4% from 2019 to 2023, reaching a retail sales value of US$1.1 million by 2023.

Fish food made up the majority (66.7% in 2018) of the other pet food sales. It grew at a CAGR of 18.9% from 2014 to 2018 and is expected to continue to grow at a CAGR of 8.8% from 2019 to 2023. The fish food market is fragmented and disorganized in India, as many regional manufacturers provide a variety of fish food products, including popular products such as flakes, pellets, dried worms, plankton, krill, fish formula and seaweed. In addition to fish, other aquatic animals are kept as pets, such as mini crabs, molluscs, shrimp and snails. The diets of these aquatic creatures differ not only by species but also by size, with companies such as Tropical Industry and Pacific Blue Taiwan specializing in catering to the fish food needs of all varieties. Fish food will continue to perform well during the forecast period as more people keep fish as pets and many fish sellers come to the cities with both domestic and international fish varieties. Demand for premium fish food is also set to grow as people look for exotic fish species to keep at home and will want to feed them the best food.

Bird food growth remained unchanged from 2014 to 2018 with its small retail value of US$0.1 million in 2018, but is expected to grow at a strong CAGR of 10.7% from 2019 to 2023. Pet birds are a long-standing tradition in India, where birds such as pigeons are raised for flying competitions and cocks are raised for fighting. These birds are fed high quality dry nuts and protein rich food. Since most bird owners rely on fruit, millet, seeds and other such protein-rich diets, they rarely buy food manufactured specifically for birds. However, in urban regions, birds are preferred as pets to dogs and cats, since they are smaller, easier to take care of, and cost far less to maintain. Food for birds also differs according to species. Hence, the bird food market is highly disorganized and many regional manufacturers specialize in providing food for certain species of birds only. The future for bird food looks bright as many people opt for birds as pets, which will effectively help maintain strong performance during the forecast period.

With India's increased exposure to foreign cultures and lifestyles, small animals such as chipmunks, rabbits and guinea pigs that are quiet and easy to take care of have become popular pets. These animals require less space, are usually kept caged and are given to young children as pets. Food for such animals usually consists of vegetables, fruit and grains, and there are few companies specializing in providing such food in India. Therefore, small pet owners depend on international brands such as Zupreem and Vitapol for food for their pets. Very few people in India keep reptiles, such as turtles, frogs and toads, as pets, but if they do, they seldom buy prepared food for such animals and mostly feed them fresh vegetables, fruit, eggs and live worms. Since the population of small mammal/reptiles is small, the demand for food for that category of pets had the slowest growth rate (CAGR: 0.1%) from 2014 to 2018.

The top five companies accounted for 38.4% of the retail market share in 2017, with Tropical Industry taking the lead (12.1%), followed by Vitakraft Pet Care GmbH & Co KG (8.2%), Pacific Blue Taiwan (8.2%), Indian Broiler Group (5.6%) and Spectrum Brands Holdings Inc. (4.3%).

Pacific Blue Taiwan and other companies offered premium fish food products, which are tailored to specific species, and many vendors import foreign brands to meet the demand for premium fish food products in India.

The top brand, Taiyo, had 12.1% market share in 2017, followed by Sun Seed (8.2%), Toto (8.2%), Drools (5.6%) and Tetra (4.3%). Taiyo is India's No. 1 selling fish food brand. Sun Seed had the highest CAGR of 56.1% from 2013 to 2017.

Distribution channels for pet food

In 2018, pet shops were the largest distribution channel (41.9%) in India, followed by veterinary clinics (39.9%). However growth in pet shops decreased at a CAGR of −2.9% from 2014 to 2018. Although online retailing had only 0.9% share in 2018, it grew at a CAGR of 10.7% from 2014 to 2018. Customers can buy pet food online at Amazon India and other websites such as Petsworld. Hypermarkets (8.3% share) and supermarkets (7.4% share) grew at a CAGR of 3.6% and 3.3%, respectively, from 2014 to 2018.

Indian imports of pet foods

In 2018, India imported US$45.3 million in pet food from global suppliers. In terms of value, the top two exporting countries, Thailand and France, accounted for 60.8% of the total imports. Thailand's exports to India grew at a CAGR of 37.5% from 2014 to 2018. Canada was India's eighth-largest pet food supplier. Pet food imports from Canada doubled from US$379,059 in 2017 to US$763,826 in 2018 and accounted for 1.7% of India's total pet food imports. Other countries entered this market, including South Africa (starting in 2017).

From 2014 to 2018, three Canadian provinces exported pet food to India, led by Alberta at US$809,157 in 2018, accounting for 97.6% of Canada's total pet food exports (US$829,127) to India, followed by Saskatchewan (US$19,970). Canada almost doubled its pet food exports to India from US$453,907 in 2017 to US$829,127 in 2018, with a CAGR of 181.9% from 2015 to 2018 (as only "0" in 2014).

A total of 303,519 kilograms (kg) of pet food was exported to India from Canada's three provinces in 2018, with Alberta accounting for the largest share of exports (256,469 kg), followed by Saskatchewan (47,050 kg).

Opportunities and challenges for Canada

The Indian market is segregated into urban and rural markets and is a major attraction for global corporations. Over 871.4 million Indians live in rural areas, compared to 449.7 million in urban areas (Euromonitor International 2019). While the urban population is growing at more than double the rate of rural areas as migrants move to cities in search of opportunity, it will likely be several decades before India's urban population becomes the majority.

Given the expected continued growth in the pet food market in India, Canadian pet food producers have an opportunity to expand their exports to that country. That said, it is important for Canadian exporters to work closely with their importing partners to ensure that India's import requirements are met and that the necessary documentation is provided.

Basic Market Entry Strategies

Canadian companies looking to enter the Indian market should act on the following points before making major investments and other commitments:

• Marketing:
  • Marketing and branding strategies should be adapted and suitable for the Indian market. The branding style and language should be familiar to Indian consumers.
  • Market acceptance of a product should be determined early; often by further identifying appropriate local product flavours (taste tests), packaging sizes, and consumption patterns.
  • Be sensitive to cultural differences.
• Business:
  • Canadian players should determine whether their products actually have market access in India.
  • Exporters need to thoroughly analyze the likely landed post-duty cost of a product. Recognize that after local margins and transportation, their product will become significantly more expensive.
  • Through the assistance of Agriculture and Agri-Food Canada's Trade Commissioner Service in India, Canadian exporters should establish a relationship with an Indian importer/distributor that provides services to the food retailing sector.
  • Canadian exporters must be prepared to start small by shipping a few pallets or cases of a product and recognize that it could take several months or years before an importer is ready to order full containers.
  • A thorough study and understanding of logistics, transportation and warehousing should be undertaken.
  • Consider whether participating in an Indian trade show would be an effective means of identifying a distributor. Participation in trade shows offers a good opportunity to get a sense of the Indian market and engage directly with potential importers or distributors.
  • Establishing a corporate presence in India should be considered. This could include one or more of: a representative office, formal joint venture, or other forms as permitted under Indian law.
  • Understand local tax, invoicing and payment schedules - which includes local payments and the identification of legal means of repatriating money.
  • Understand customs clearance requirements, including export/import fees, product certification or designation requirements.

Pet trade show in India

The India International Pet Trade Fair (IIPTF) is the largest pet trade show in India. IIPTF is partly a B2B (Business-to-Business) and partly a B2C (Business-to-Consumer) event, as it showcases a wide range of pet products, along with being a platform for pet-pertinent services from all across India as well as from overseas. IIPTF is an endeavor to spread awareness of the Indian pet market's potential, among global industry members. The Canadian High Commission in India is planning to coordinate a Canadian presence at IIPTF 2019. For more information, companies interested in participating in IIPTF 2019 should reach out to india.commerce@international.gc.ca.

The AgriMarketing Program

The AgriMarketing Program is a Canadian government program that provides grants designed to support export expansion projects undertaken by agri-food and beverage companies. It offsets a portion of eligible expenses to help small and medium-sized enterprises (SMEs) to reach export markets and perform strategic marketing projects such as participation in trade shows or government-led trade missions. As part of the Canadian Agricultural Partnership (CAP), the AgriMarketing Program will provide support to agri-food and beverage companies through 2023. Interested Canadian SMEs are encouraged to apply for this grant/funding.

Product launch analysis

Between January 2014 and December 2018, 737 pet food products were launched in India, 307 of which were new products, 283 were new varieties/range extensions, 120 were new packaging, 17 were relaunches and 10 were new formulations. New packaging had the highest CAGR of 81.7% from 2014 to 2018.

From 2014 to 2018, most of the new launches were dog snacks and treats, with 437 releases, followed by dry dog food (101), dry cat food (74), wet cat food (61), wet dog food (42), and cat snacks and treats (27).

Of the 737 pet food products launched from 2014 to 2018, Teeth & Tartar Prevention (functional pet) were the number one claim (259) among all sub-categories, followed by other (functional pet) (247) and skin & coat (functional pet) (197).

Conclusion

In India, dogs are more popular than other animals as pets. This creates a great opportunity for pet food companies to produce various food products for dogs. The dog food segment is expected to continue its dominance in the forecast five years, followed by the cat and fish food segments. Dry food is more popular category in the dog food segment.

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.

• Overview of Trade Commissioner Services in India
• Find a Trade Commissioner

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.

Sector Trend Analysis – Pet food trends in India
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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