pulse report pet q2-2014

PULSE REPORT

IRI Pulse Report Pet

Welcome to the Pulse Q2 2014 edition for pet. We hope you find it

useful. Please do not hesitate to contact us if you have any questions

or comments at [email protected].

Q2 2014

IRIworldwide.eu

PULSE REPORT

About the Report

2

• This pet report is one of 10 super category reports designed to show high-level comparison

and analysis for retail markets across major countries in Europe.

• This report contains data gathered from countries across Europe. This market was split into

the following categories: dog food, cat food, other pet food and pet accessories.

• The report highlights key metrics, such as total sales figures, market trends, category

shares, and winners and losers for Europe and individual countries.

• The data has been sourced from IRI retail databases and Eurostat, the statistical branch of

administration for the European Commission.

• The countries included in the report are France, Germany, Italy, the Netherlands, Spain and

the United Kingdom (UK).

• The market channels used for each country in this report are as follows:

Country Channels used

UK Hypermarkets, supermarkets, drugstores and impulse outlets

ES Hypermarkets, supermarkets, hard discounters, and drugstores, including the Canary Islands

DE Hypermarkets, supermarkets, hard discounters and drugstores

NL Hypermarkets, supermarkets, hard discounters and drugstores

IT Hypermarkets, supermarkets, small self service, hard discounters and drugstores

FR Hypermarkets and supermarkets

• For analytical purposes, the data sourced from available retail databases has been

consolidated to provide consistent results. However, for some countries it is not possible to

source data pertaining to certain categories. In these instances, it has been documented in

the ‘notes’ section found at the end of the report.

PULSE REPORT

On the Radar

3

ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR

Source: Eurostat, September 2013

After five years, the pet macro-category has now also

been affected by the economic slowdown. Its value

growth across Europe in Q2 2014 is still positive, but

has slowed almost to zero (+0.2%). This caused a

difficult start to 2014, demonstrating lower than average

growth in 2013 (+1.7% year ending Q4 2013). The pet

care category’s performance is now far from the growth

it had in the past, and its trend now worse than the

FMCG trend. The limited value growth was driven by an

increase in prices, more so than by an increase in

volumes (more premium sectors in small sizes matter to

this value growth). Different trends coexist: single serve

premium products grew together with low priced

products by private labels in most countries. So high

price and low price grew at the same time.

POPULATION IN MILLIONS

UNEMPLOYMENT (%)

AVERAGE 12 MONTHS

INFLATION RATES GDP IN MILLIONS (€)

Jan. 2012

Jan. 2013

Sep. 2013

Average 2012

Sep. 2013

Average 2012 2012

2013 (Estimate)

France 65.3 65.6 11.1 10.2 +1.2 +2.5 2 032 297 2 059 358

Germany 80.3 80.5 5.2 5.5 +1.8 +2.4 2 644 200 2 694 499

Italy 59.3 59.6 12.5 10.7 +1.8 +3.5 1 565 916 1 568 388

Netherlands 16.7 16.8 7.0 5.3 +3.1 +2.8 600 638 604 459

Spain 46.8 46.7 26.6 25.0 +2.3 +2.3 1 049 525 1 051 076

United Kingdom

63.4 63.8 7.5 7.9 +2.7 +3.7 1 901 001 1 854 920

PULSE REPORT

556 536 534 564 545 527

138 139 140 147 144 140

80 76 77 86 77 75

302 299 311 320 304 302

516 488 512 537

505 495

518 491 506

544 514

489

0

500

1,000

1,500

2,000

2,500

31-mar-13 30-jun-13 29-sep-13 29-dic-13 30-mar-14 29-jun-14

Eu

ro

s, in

millio

ns

Period Ending

France

Germany

Italy

Netherlands

Spain

UK

GLOBAL TRENDS

4

TOTAL EUROPE +0.2%

+1.2%

-0.2%

-0.5%

VALUE SALES IN MILLIONS (€)

Total EU 8 393

UK 2 169*

FR 2 052

DE 2 048

IT 1 238

ES 571

NL 314

TOTAL PET VALUE SALES AND % CHANGE VERSUS PRIOR YEAR

*based on an exchange rate of €1.150 to the pound

+4.6%

+0.2%

TOTAL PET VALUE SALES FOR THE LAST SIX QUARTERS

Source: IRI retail databases; period ending 29 June 2014

-2.9%

PULSE REPORT

4 208

808

3 101

2750.9

-12.7 1.7 0.5

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ro

s,

in m

illi

on

s

Total € Sales % € vs. YA

9.6%

50.1%

36.9%

3.3%

Cat Food Dog Food Pet Accessories Other Pet Food

Europe

5

3 101

808

275

4 208

Eu

ros i

n m

illi

on

s

CATEGORY VALUE SALES IN THE LAST YEAR

CATEGORY SHARE OF VALUE IN THE LAST YEAR

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom

TOP 5 CATEGORIES: EVOLUTION Value sales (€) and % change versus a year ago

Source: IRI retail databases; Period ending 29 June 2014

KEY TRENDS

• The value of the European market barely

grew across the six countries in the year

ending Q2 2014. With only +0.2% growth,

this was the worst trend seen over the latest

four years. Europe has seen decelerated

growth, which has slowed in Q2 2014 pushing

pet care down to near zero.

• Half of the six countries experienced a

decrease in sales (the Netherlands, Germany

and the UK). Conversely, Spain appeared as

the best performer (+4.6%) and Italy stayed

positive (+1.2%).

• Cat food is the core business of pet care

(standing for 50.1% of the category) but

shows a limited growth (+0.5%) that is only

slightly above category growth. Dog food is

growing, and other pet food shows a double

digit negative trend that adversely impacts

the total growth of the pet care category,

notwithstanding the limited importance of

other pet food on the total (3.3%).

• Pet accessories is showing the most positive

trend.

PULSE REPORT

Europe

6

CATEGORY KEY FACTS

• The main contributor to the limited growth of pet care across Europe is dog food (+26.3

million €). A smaller contribution comes from cat food (+20.9 million €, where the driver is

snacks and treats), and a visible contribution also comes from pet accessories.

• The dog snacks and treats segment is becoming increasingly more important and significant

due to its growth in value and volume in all European countries.

• Wet cat single serve and, to a lesser extent, dry cat food are the drivers for cat food and

where brands are investing the most.

• The main areas of innovation by major brands is on premium tastes in small sizes and user

friendly packages. Unless we consider the growing importance of the oral care aspect in

snacks and treats, which was introduced some years ago, no new concepts or innovations

have entered the market.

• In these tough economic times, private label is growing across most of the markets, and

represents a cheaper but acceptable alternative offer compared to major brand.

• Pet care appears to be an increasingly polarised category. Economy products are growing

(private label) as well as premium products in small sizes. The shopper of dog food may

behave very differently from the shopper of cat food. This presents a key challenge for

manufacturers who must respond by taking specific action in different categories.

• The marketplace continues to become more competitive for branded products due to

increased promotional activity and the further growth of private label.

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom


TOP LOSERS: VALUE SALES CHANGE VERSUS A YEAR AGO (€)

TOP WINNERS: VALUE SALES CHANGE VERSUS A YEAR AGO (€)

26.3

20.9

13.4

0 5 10 15 20 25 30

Dog Food

Cat Food

Pet

Accessories

Euros, in millions

- 40.2

-50 -40 -30 -20 -10 0

Other Pet

Food

.

Euros, in millions

PULSE REPORT

16.4%

47.0%

30.7%

5.9%


France

7

Eu

ros,

in m

illi

on

s




TOP 5 CATEGORIES: EVOLUTION

Value sales (€) and % change versus a year ago

631

337

120

965

965

337

631

1201.7 -3.9

1.4 3.7

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ro

s,

in m

illi

on

s


KEY TRENDS

• Growth is still mainly driven by cat food. Wet

cat food growth was moderate (+0.6%),

whereas dry cat continues to be dynamic

(+5.4%).

• Snacks and treats is the fastest growing

category. Cat snacks and treats (+16.1%)

grew through assortment development

(+13.1%), and dog care and treats (+9.3%)

benefitted from more new product

development (+12.8%).

• Growth in the cat population had a positive

impact on cat food and pet accessories,

thanks to cat litter (+3.0%).

• All other pet food shows negative growth,

with the lowest growth in bird food (-10.5%).

• The dog food trend was positive for the first

time since several quarters. Wet food growth

remains negative (-2.3%), whereas dry food

is positive (+4.3%), thanks to care and

treat. Main meal (+0.5%) has also made a

contribution to growth.

PULSE REPORT

France

8




Euros, in millions

CATEGORY KEY FACTS

• Cat food is the main contributor to the market value growth, showing 35 million Euros of new

sales. With the exception of multi-serve, all cat food sectors are very positive:

− Dry cat +5.4%

− Single serve wet cat +2.6%

− Snacks cat +16.1%

• Pet food volume sales are increasing, driven by SKU range (+1.7%) and promotional activity

(+8.0%).

• The assortment in pet food tends to increase in each segment, with the exception of wet dog.

This proves how strategic this category continues to be for retailers, particularly with the

development of the value offer.

34.6

10.3

4.8

0 10 20 30 40

Cat Food

Dog Food

Pet

Accessories

- 4.9

-6 -5 -4 -3 -2 -1 0

Other Pet

Food

.Euros, in millions

PULSE REPORT

1 173

156

650

70-1.7 -5.4 2.1 0.6

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ros,

in m

illi

on

s


3.4%

31.7%

57.3%

7.6%


Germany

9

KEY TRENDS

• The pet care and food category in Germany

has reported a decline of -0.2% in its value

sales, mainly due to the decline in promotional

sales. Normal sales are showing slight growth.

• Cat food, which contributes more than half of

the value share of the main category, is stable

in value due to the rise in average prices;

however, there were dips in volume.

• The significant decline in Aldi and

supermarkets (400-799 square meter) has

resulted in an overall decline of the pet care

and food categories.

• Discounters, which occupy approximately 44%

of the value share in pet food, show maximum

decline for dog food followed by cat food.

• Apart from marginal growth in cat food and

pet accessories, all other pet foods show

decline in value.

• Only pet accessories is showing positive

development in volume.

• Within pet accessories, cat litter is

compensating for the value decline observed

in other sectors in pet accessories.

Eu

ros,

in m

illi

on

s






650

156

70

1 173

PULSE REPORT

Germany

10

CATEGORY KEY FACTS

• In cat food, positive value development was driven by promotional sales. Value growth in

snacks and wet food offset the decline seen in the other types in the category, while

drugstores and hypermarkets contributed the most to value growth.

• Cat litter, with a double digit value growth in hard discounters, is the growth driver for pet

accessories.

• Dog food is the most declining category, so much so that an increase in the average price

would not offset the major volume decline of this category. Most of its value loss came from

the discounters. Only the snacks sector displayed growth in dog food, as both dry and wet

food experienced a dip in value sales.

• Dry dog food is showing a decline, mainly driven by the size range from 2.5kg to 4.9kg. This

is the most popular selling package size range. This range has contributed to around 90% of

the decline in this sector. Below 2.4kg pack sizes are the only growing pack sizes in dry food.

• Decline in bird food and small animal feed was driven by a dip in non-promoted everyday

sales; hypermarket contributes most of the value loss in both the sectors.




Euros, in millions

7.3

3.2

0 2 4 6 8

Cat Food

Pet

Accessories

- 11.0

- 4.0

-12 -10 -8 -6 -4 -2 0

Other Pet

Food

Dog Food

.Euros, in millions

PULSE REPORT

651

143

419

251.9 -7.3

4.1 0.5

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ro

s,

in m

illi

on

s


11.6%

52.6%

33.8%

2.0%


Italy

11

KEY TRENDS

• Total cat and dog food continued to increase in

value sales in the year ending Q2 2014 (0.5%

for cat and 1.9% for dog), but growth is

slowing down and volume sales were not

consistent. The value growth of cat and dog

food is derived from increasing prices.

• Cat food remained the largest sector of the

category, accounting for 52.6% of total value

sales, and showed an increase of 0.5%, which

is far lower than dog food. Pet accessories

remained positive (+4.1%) and other pet food

is still heavily losing value sales (-7.3%).

• Dry pet food continues to out perform wet pet

food. Wet single serve drove the performance

of cat food with a growth of 3.0% in value

sales, and dog food continued on a positive

trajectory for wet small and medium products

(+3.0%).

• Snacks and treats remains the fastest growing

segment of the category, especially for cat

(+24.6%), but also for dog food (+6.7%).

Eu

ros,

in m

illi

on

s






419

143

25

651

PULSE REPORT

Italy

12

CATEGORY KEY FACTS

• The main contribution to the growth of the pet care category came from dog food, with a

€7.7m increase in sales. The growth of cat food is worth €3.5m, which is significantly lower

than past values. Pet accessories continue to be positive, and are the second leading

contributor to the sales growth of the pet care category with a €5.7m increase.

• Products in small packages continue to drive the positive performance of the market,

especially in cat food. This confirms that the cluster of shoppers who buy premium products

(with user friendly packages and special tastes) are not affected by the difficult economic

situation.

• The increasing attention to pets’ health is reflected in the considerable growth of the dog

functional snack and treats segment. Cat snack and treats is still a niche market, but with

strong potential of growth.

• Pet accessories are growing faster than cat and dog food, while other pet food is continuously

losing value and volume sales.

• Since both promotional activities and private labels show a relevant growth in most of the

segments, pet care is increasingly subject to high levels of competition – the percent of

promoted volumes in pet food reached 29.7%, with a growth of +4.8%, compared to 24.9%

last year. Private label reached a 41.8% volume market share, down -2.0% points versus

last year.

• Pet care is not a category that is highly impacted by the recession, as it is still growing far

above the average for fast moving consumer goods (FMCG). However, this growth in value

goes together with a decline in volumes.

• In general, pet care continued to grow in Italy, but the focus on saving is most important.

This does not mean that brand loyalty is decreasing, but rather that more shoppers look for

their preferred brand when it is on sale. Shopper interest in pet welfare continues to be

strong and, as a consequence, functional and enriched products performed well.




Euros, in millions

3.5

5.7

7.7

0 2 4 6 8 10

Dog Food

Pet

Accessories

Cat Food

- 2.0

-3 -2 -2 -1 -1 0

Other Pet

Food

.Euros, in millions

PULSE REPORT

17.8%

50.6%28.1%

3.4%


The Netherlands

13

Eu

ros,

in m

illi

on

s






88

56

11

159

159

56

88

11-1.9

-21.0

0.8 -3.2

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ro

s,

in m

illi

on

s


KEY TRENDS

• Total pet food dropped in value (3.9%), and

pet accessories showed an increase in value

sales (0.8%). Unit sales dropped by 4.3%.

The average price per unit increased by

1.3%.

• Cat food represents 50.6% of total category

value. This category declined by -3.2%

value sales compared to last year on a

moving annual total (MAT) base. However,

turnover of Q2 2014 grew by 0.7% versus

Q1 2014.

• Dog food represents 28.1% of total category

value. This category declined by -1.9%

compared to last year on a MAT base.

However, turnover of Q2 2014 grew by

0.4% versus Q1 2014.

• Pet accessories is the third largest segment,

and represents 17.8% of the total category

value. It grew by 0.8% (MAT, in value).

However, it declined by -6.6% in turnover

compared to Q1 2014.

• Other pet food showed a decline in turnover

of 21.0% (MAT), and a decrease of 43.3%

compared to Q1 2014.

PULSE REPORT

The Netherlands

14

CATEGORY KEY FACTS

• Cat food declined €5.3m of value sales. This decrease in value is due to the drop in cat kibble

(€2.5m) and wet cat food (€3.1m). The smallest segment, other cat food, is growing, but

does not compensate the losses from the other two segments.

• Dog food lost turnover in all segments, with the exception of frozen dog food. This segment

grew by 18.4%; €1.3m.

• Other pet food lost €2.9m of value. 97.7% of value comes from two segments, namely

rodent food and bird food. Both segments dropped in value. Bird food lost €2.3m and rodent

food €0.5m.

• The main driver of pet accessories is cat litter. This segment grew by €0.5m; +1.9%.

• Three manufacturers are responsible for 85.4% of total pet category value: private label

(31.4%), the leader (27.8%) and the follower (26.1%). This share grew by 0.6 point versus

a year ago (84.8%).

• Private label is split into top, mainstream and bottom. Top and mainstream are both losing

turnover (-€4.4m), while bottom has increased by €2.8m.

• Promotional pressure is higher than a year ago (13.7% versus 12.6%). The difference

between Q2 (12.3%) and Q1 2014 (12.1%) is smaller (+0.2 point).




Euros, in millions

0.5

0 0 0 0 0 1

Pet

Accessories

- 1.7

- 5.3

- 2.9

-6 -5 -4 -3 -2 -1 0

Dog Food

Other Pet

Food

Cat Food

.Euros, in millions

PULSE REPORT

4.7%

60.7%

34.6%

Dog Food Cat Food Other Pet Food

Spain

15

Eu

ros,

in m

illi

on

s






198

27

347

347

27

198

5.6 -0.2 4.5

Dog F

ood

Cat

Food

Oth

er

Pet

Food

Eu

ro

s,i

n m

illi

on

s


KEY TRENDS

• The pet food market showed positive

growth due to the expansion of two of its

three segments: dog food (+4.5%) and cat

food (+5.6%). Other pet food (-0.2%) is

decreasing in value sales. Private label has

reached 48.4% market share, and even

higher in the dog food segment (55.0%).

• Dry dog food experienced major growth

(+3.7%). Wet dog food increased by only

+2.3% in value, as this segment has a

higher level of private label presence

(+74.5%). Wet food is a more expensive

product, but private label is focused on

formats with large volume, whereas

branded manufacturers are focused on

single serve products with a higher value

and less weight.

• Cat food experienced a growth of 5.6% in

value. This increase in value is due to the

success in single serve products.

PULSE REPORT

Spain

16

CATEGORY KEY FACTS

• All categories continued to grow. Dry dog food (the largest and cheapest segment), along

with snacks for dogs and cats (the newest and more expensive) were the sectors with the

most noticeable growth. On the other hand, private label continues to gain market share,

absorbing most of the growth of the market.

• Snacks and prizes, or treats for dogs and cats, continues to gain presence, increasing in

volume. It is important to highlight the relevance of prizes for the cats category, which has

almost doubled in sales. Both account for a large number of the launches in this sector as a

way of gaining added value and differentiation.

• Private label brands are gaining share. This major increase is in value, as opposed to volume.

This demonstrates the impulse of retailers’ own brands of major quality and added value for

their brands that are not bought on low prices alone.




Euros, in millions

14.8

10.5

0 5 10 15 20

Dog Food

Cat Food

- 0.1

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0

Other Pet

Food

.Euros, in millions

PULSE REPORT

5.2%

48.8%

44.4%

1.6%


The United Kingdom

17

Eu

ros,

in m

illi

on

s






963

113

34

1 059

1 059

113

963

341.2

-27.1 0.0 -0.9

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Eu

ro

s,

in m

illi

on

s


KEY TRENDS

• Value sales of pet care in the UK declined

by 0.5% during the year ending June

2014. This is a turnaround from the

corresponding period last year when value

growth was 3.1%.

• Cat food (the largest sector in terms of

value) has driven the market decline, with

its performance of -0.9%. Dog food is

maintaining growth at 1.2%.

• Pet accessories are static, while other pet

food has declined by 27.1%.

• Levels of promotional volume for pet food

increased to 44.9% this year, up from

39.3% last year. Currently (12 weeks

ending Q2 2014), the % of promotional

volume is 49.7%, and this is driven by cat

food (60.9%), whereas dog food is 40.8%.

• Private label products have seen an annual

decline in value sales during this year of

-2.9% and hence have had a share loss of

0.5% points to the corresponding time last

year.

PULSE REPORT

The United Kingdom

18

CATEGORY KEY FACTS

• Dog food value growth this year is attributed to strong growth in the dog treats and chews

sectors both in year on year % change (7.2% and 3.8% respectively) and in value

contribution. Dog wet food although had a small value growth of 0.1%, its volume declined

by -3.1%. Standard dry dog food declined both in value and volume (-1.0% and -5.3%).

Super premium dry dog food value grew by 6.6%, but its volume declined by -0.1%.

• Cat wet single serve products (pouches and foils), which currently have an annual share of

61.9% of total cat food, saw value decline by -0.2%, and volume increase by 1.7%. This is

due to the increased levels of promotional activity, where consumers have been taking

advantage of deeper discounts. Cat wet multi-serve (cans) saw both value and volume

decline by -13.3% and -11.8% respectively. Cat treat products was the only sector within cat

food to have both value and volume increase, by 16.4% and 16.7%.

• New product development (NPD) within total pet food last year gave a contribution of 3.5%

of value sales (at a sub brand level), this years new product development has only

contributed 1.7% of value sales. Last year’s NPD was 3.4% of cat food, and this year it was

1.0%. And, dog food last year was 3.5%, this year it was 2.5%.

• Although the price per kilo increased by 3.5% this year, it has slowed from 4.2% during the

same period last year. Branded products increased by 2.4%, whereas private label increased

by 5.5%. Private label’s price increase is more than double that of last year’s increase which

was 2.7% for these products.

• Although at a total pet food level there is still a trend towards smaller, more expensive packs

(and this is the same for dog food), cat food trends appear to be moving toward more

expensive larger packs.




Euros, in millions

11.9

0 5 10 15

Dog Food

- 12.7

0.0

- 9.4

-15 -10 -5 0

Pet

Accessories

Cat Food

Other Pet

Food

.

Euros, in millions

PULSE REPORT

Final Notes

19

Notes on category definitions for countries

Due to the diverse products found in individual countries across this market, it was necessary

to consolidate the available data into the categories in this report. In some cases, it wasn’t

always possible to align products across all six countries, hence the need to highlight any

anomalies in the report. Those exceptions are listed below:

Other pet food

• The UK data in this report only includes bird food, while the other countries include fish food

and rodent food.

Pet accessories

• The UK data in this report only includes cat litter and does not include pet hygiene products,

aquarium accessories or pet toys.

• The Spain data in this report does not include this category.

• The Germany data in this report does not include pet toys.

PULSE REPORT

Resources

20

About IRI. IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight

that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and over-

the-counter healthcare industries by pinpointing what matters and illuminating how it can impact their businesses

across sales and marketing. Move your business forward at IRIworldwide.eu

Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA, Tel +44 (0) 1344 746000

Copyright © 2014 Information Resources, Inc. (IRI). All rights reserved. IRI, the IRI logo and the names of IRI products and services

referenced herein are either trademarks or registered trademarks of IRI. All other trademarks are the property of their respective owners.

FOR MORE INFORMATION

Please contact Paolo Garro, Business Insights Director,

IRI at [email protected] or

+39 02 52.579446 with questions or comments about this report.

To gain insight into opportunities across specific categories, segments, channels or retailers,

contact your IRI client service representative regarding custom analyses leveraging the

following resources:

• IRI InfoScan Census® is a syndicated retail tracking service that enables manufacturers

and retailers to acquire industry insights used to make better business decisions. IRI

InfoScan Census utilises the data that IRI collects from grocery, drug, and mass

merchandise retailers to provide the most comprehensive and accurate syndicated data

offering in the FMCG sector. With access to accurate, granular detail by category,

geography, measure, and time period, clients have the tools needed to develop marketing

and sales strategies based on product performance, distribution, and promotion

responsiveness. All data about pet comes from IRI InfoScan Census.

• IRI Consulting provides strategic insights and advice, leveraging a variety of data sources,

predictive analytics, enabling technologies, and business analyses to help FMCG

manufacturers and retailers address significant sales and marketing issues effectively.

mailto:[email protected]

pulse report pet q2-2014

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