Pulse Report Pet Q1 2014

PULSE REPORT

IRI Pulse Report Pet

Welcome to the Pulse Q1 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].

Q1 2014

IRIworldwide.eu

PULSE REPORT

About the Report

2

• This pet report is one of ten 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 around 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 for 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 has not been

possible to source data pertaining to certain categories. When this occurred, 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 is now

starting to be hit by the economic slowdown. Its

value growth across Europe in Q1 2014 is still

positive, but has slowed down at +0.6%, which is

definitely lower than the growth in Q4 2014

(+1.7%). Pet care category performance is far from

the growth it had in the past, but its trend is still

good, at least in line with the FMCG trend. Limited

value growth was driven by an increase in prices

more than by an increase in volumes. Price inflation

and more premium sectors in small sizes matter to

this value growth. Different tendencies coexist.

Smaller premium products grew together with

convenience products by private labels in most

countries.

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

557 556 536 534 564 545

138 138 139 140 147 144

83 80 76 77 86 77

316 302 299 311 320 304

556 533 504 527 554

519

537 518

491 506 544

514

0

500

1,000

1,500

2,000

2,500

30-dic-12 31-mar-13 30-jun-13 29-sep-13 29-dic-13 30-mar-14

Millio

ns

Period Ending

France

Germany

Italy

Netherlands

Spain

UK

GLOBAL TRENDS

4

TOTAL EUROPE +0.6%

+1.6%

-0.9%

+0.3%

VALUE SALES IN MILLIONS (€)

Total EU 8 457

UK 2 178*

DE 2 105

FR 2 053

IT 1 235

ES 570

NL 315

TOTAL PET VALUE SALES AND % CHANGE VERSUS PRIOR YEAR

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

+6.5%

+0.8%

TOTAL PET VALUE SALES FOR THE LAST SIX QUARTERS

Source: IRI retail databases; period ending 30 March 2014

-2.7%

PULSE REPORT

4 251

807

3 117

2810.8

-11.4 2.4 1.0

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns

Total € Sales % € vs. YA

9.5%

50.3%

36.9%

3.3%

Cat Food Dog Food Pet Accessories Other Pet Food

Europe

5

3 117

807

281

4 251

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


KEY TRENDS

• The value of the European market grew only

by 0.6% across the six countries in the year

ending Q1 2014. Considerably worse than

the growth of the year ending Q4 2013

(1.7%), Europe continued to slow down.

• Spain, Italy and France are confirmed as the

top countries for growth in the year ending

Q1 2014.

• Cat food remains the core business and the

trendsetter of pet care, showing the fastest

growth after pet accessories. Dog food also

grew at a similar pace. The growth of pet

accessories was definitely positive, whilst

other pet food stayed sharply negative.

• The marketplace continued to become more

competitive for branded products, due to

increased promotional activity and to the

further growth of private label.

PULSE REPORT

Europe

6

CATEGORY KEY FACTS

• The main contributor to the growth of pet care across Europe was cat food (+43.6 million €),

whilst a smaller but relevant contribution came from dog food (+24.5 million €, with snacks

and treats the drivers) and a visible contribution also came from pet accessories.

• The dog snacks and treats segment became 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, was the driver for cat food and

where brands are investing the most.

• The main point of innovation by major brands was on premium tastes in small sizes or new

user friendly packages. No real new concepts or innovations entered the market, unless we

consider the growing importance of the oral care concept in snacks and treats, which was

introduced some years ago.

• Private label grew across most of the markets and represents a cheaper but acceptable

alternative offer compared to major brands in the tough economic times we’re living in.

• Pet care appears to be an increasingly polarised category. Economy products (private label)

as well as premium products in small sizes grew. The shopper is not unique and the shopper

of dog food may behave very differently from the shopper of cat food. So, a key challenge

for manufacturers is to develop proper ad hoc actions in different categories and to defend

the equity of its brands, which are in most cases still strong and well established.

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 (€)

19.2

24.5

43.6

0 10 20 30 40 50

Cat Food

Dog Food

Pet

Accessories

Millions

- 36.4

-40 -30 -20 -10 0

Other Pet

Food

.

Millions

PULSE REPORT

16.6%

47.2%

30.8%

5.4%


France

7

Eu

ros,

in m

illi

on

s






633

340

111

970

970

340

633

1111.0

-13.2

1.12.5

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns


KEY TRENDS

• Growth was still mainly driven by cat food.

Wet cat food growth was for the first time

stable

(-0.3%), whereas dry cat food continued to

be very dynamic (+5.7%).

• Snacks and treats were the fastest growing

category. Cat snacks and treats (+15.7%)

grew through assortment development

(+16.1%), whilst dog care and treats

(+9.1%) benefitted from more new product

development as well (+15.1%).

• The growth of the cat population had a

positive impact on cat food, but also on pet

accessories, thanks to cat litter (+2.4%).

• All other pet food was negative within all

types of products (-13.2%).

• The dog food trend continued. Wet food was

negative (-3.3%) with dry food positive

(+2.4%), thanks to care and treat. Main

meal (+0.7%) also made a contribution to

growth.

PULSE REPORT

France

8




Millions

CATEGORY KEY FACTS

• Cat food was the main contributor to market value growth with 24 million Euros of new sales.

With the exception of multi-serve, all cat food sectors were very positive:

o Dry cat: +5.7%

o Single serve wet cat: +2.3%

o Snacks cat: +15.7%

• Pet food sales increased, driven by SKU range (+2.0%) and promotional activity (from 9.9%

to 10.6% in value).

• The assortment in pet food tended 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.

24.1

6.2

3.6

0 5 10 15 20 25 30

Cat Food

Dog Food

Pet

Accessories

- 16.8

-20 -15 -10 -5 0

Other Pet

Food

.

Millions

PULSE REPORT

7.4%

57.5%

31.8%

3.3%


Germany

9

KEY TRENDS

• In Germany, the total pet category recorded a

decline of -0.9% in value sales, contributed

mainly by pet food. On the positive side, pet

accessories grew.

• Cat food, the leading category, was stable in

value due to the rise in average prices by

+2.5%; nevertheless, volume dropped.

• Dog food declined in value and volume,

primarily driven by hard discounters.

• Other pet food deteriorated in value, but grew in

volume, owing to bird food, because of a huge

dip in average prices per kilogram by -27.9%.

• The substantial decline in pet food at Aldi

impacted the total decline.

• Private label demonstrated a decline in both

value and volume, driven by a decline in cat and

dog food.

• Pet accessories’ positive growth came from cat

litter, driven by private label.

Eu

ros,

in m

illi

on

s






669

156

70

1 210

1 210

156

669

70-3.6 -4.8 3.2 0.4

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns


PULSE REPORT

Germany

10

CATEGORY KEY FACTS

• Cat food, the core category, was the only category in pet food which showed stability in

terms of value sales due to an increase in prices. The significant growth contributed by

hypermarkets, despite Aldi’s huge losses, in turns made the category growth rate drop.

• Cat snacks, other than sticks, was the only growing segment in cat food and grew in both

value and volume. In cat wet food, the main segment, losses were primarily contributed by

aluminum single type.

• Cat litter, with value growth mainly driven by Lidl, was the growth driver for pet accessories.

Private labels showed double digit growth for cat litters. In contrast, national brands

declined. The clumping segment was the only growing segment.

• All other pet accessories, with minimal share, declined in both value and volume sales,

except bird hygiene, which grew in volume sales.

• Dog food declined the most in overall pet food. It was primarily driven by hard discounters

due to huge dips in private label sales. Dog snacks growth could not lift up the sales of the

total dog food category.

• Dog wet food losses were mainly driven by the can type. Dog dry food declines were mainly

due to size class from 2.5kg to 4.9kg, its core selling pack size, followed by 10 kg+.

• Declines in prices could not offset the losses of fish food, hence it declined in both value and

volume sales. Bird food recorded growth in volume sales, but declines in value sales. Small

animal feed / rodents showed a decline overall, mainly driven by hypermarkets, but grew in

drug stores. Private label declined for small animal feed / rodents, but grew in bird food.




Millions

4.8

4.8

5 5 5 5 5 5

Cat Food

Pet

Accessories

- 25.3

- 3.5

-30 -25 -20 -15 -10 -5 0

Other Pet

Food

Dog Food

.Millions

PULSE REPORT

11.6%

52.6%

33.7%

2.1%


Italy

11

KEY TRENDS

• Total cat and dog food continued to increase in

value sales in the year ending Q1 2014 (0.8% for

cat and 1.8% for dog), but trends slowed down

and volume sales cannot keep up. This means

that value grew as volume declined for cat food

and dog food. Value growth came from the

increasing importance of smaller packages, which

have a higher price per kilogram.

• Cat food remained the largest sector of the

category, accounting for 52.6% of total value

sales, and showed an increase of 0.8%, which is

lower than dog food. Pet accessories remained

positive (+6.6%) whilst other pet food continued

to heavily lose value sales (-7.3%).

• Dry pet food performed better than wet. Wet

single serve drove the performance of cat food

with a growth of 3.7% in value sales, and also dog

food kept on showing a positive trend for wet

small and medium products (+3.1%).

• Snacks and treats remained the fastest growing

segment of the category, especially for cat

(+33.6%) but also for dog food (+6.4%).

Eu

ros,

in m

illi

on

s






416

144

26

650

650

144

416

261.8 -7.3 6.60.8

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns


PULSE REPORT

Italy

12

CATEGORY KEY FACTS

• Cat food contributed a 5.1 million Euro increase in sales to the growth of the pet care

category, which is lower than the growth of dog food (worth 7.3 million Euros). Pet

accessories continued to be positive and were the best contributor to the sales growth of the

pet care category with a 8.9 million Euro increase.

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

especially in cat food, confirming that the cluster of shoppers who keep on buying premium

products with user friendly packages and special tastes are not affected by the difficult

economic situation.

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

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

good potential of growth.

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

segments, pet care is more and more a highly competitive category—the percent of promoted

volumes in pet food got up to 27.0% with a growth of +0.2 points versus 26.8 last year.

Private label reached a 42.3% volume market share, down -0.4 points versus last year.

• Pet care is a category that is only minimally impacted by the recession, and continued to

grow far above the average for FMCG products of -0.4% for food and non-food products in

Italy in the year ending Q1 2014 and -0.4% in Q1 2014. However, the growth in value for pet

care went together with a decline in volumes.

• As a general comment, pet care continued to grow in Italy, but the attention to saving

money matters more and more. This does not mean that loyalty to brands is decreasing, but

shoppers more and more look for their preferred brand when it is on deal. The attention to

pet welfare is confirmed and, as a consequence, functional and enriched products performed

well. The online channel grew and started to steal sales form physical shops, providing saving

and service to shoppers.

• The real challenge for both manufacturers and retailers is around how to differentiate their

offer and provide value to a shopper who is reacting to the current recession.




Millions

8.9

7.3

5.1

0 2 4 6 8 10

Pet

Accessories

Dog Food

Cat Food

- 2.0

-3 -2 -2 -1 -1 0

Other Pet

Food

.Millions

PULSE REPORT

17.8%

50.6%28.1%

3.5%


The Netherlands

13

Eu

ros,

in m

illi

on

s






87

55

11

156

156

55

87

11-2.6 -20.4 1.9 -3.2

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns


KEY TRENDS

• On a yearly basis, the turnover of the pet

food category declined by 2.9%

• Total supermarket turnover has been under

pressure since P9 2013. Because of good

Eastern sales (P4 2014), turnover grew on

year to date (YTD) by 0.2%.

• YTD promotional pressure is sky high (YTD

P4 2014: 19.7%). Also, the share of pet

food sold on promotion increased in Q1

from 11.1% to 12.1% versus last year.

• Compared to Q1 2013, the entire category

lost turnover (-4.5%). Also compared to

the former quarter, turnover showed

decline (-4.2%).

• The largest category, cat food, lost €5.2m

in turnover on moving annual total (MAT)

base versus last year. Dog food lost €2.4m

and other pet food €2.8m.

• Where turnover dropped by 2.9%, volume

dropped by 3.6% and the number of pieces

fell by 4.7% (MAT Q1).

• Prices increased by 0.7% on MAT and

lowered by 0.7% versus Q1 2013.

PULSE REPORT

The Netherlands

14

CATEGORY KEY FACTS

• Cat food was the largest segment within the category (50.6% value share). Turnover

dropped by €5.2m. Dry cat food and wet cat food showed a decline (-5.3% and -3.5%

respectively) in turnover, while other cat food grew (8.9%). Unfortunately, this segment only

has 7.8% share within the cat food category.

• Dog food was the number two largest segment (€) within the category (28.1% value share).

Only frozen dog food grew considerably in turnover (20.4%). The segments dry dog food,

wet dog food and other dog food missed turnover (-4.8%).

• Other pet food is spread over four segments, of which 97.8% of turnover came out of rodent

(€5.1m turnover) and bird food (€5.5m turnover). The other two segments (fish food and

‘Others’) were responsible for only 2.2% of turnover. All segments showed a decline in

turnover, in total -20.4% versus MAT Q1 2013.

• The category pet accessories was the only pet food category that showed turnover growth

(1.9% in value). 89.6% of turnover came out of two segments: dog chew bones (47.2%) and

cat litter (42.3%). These two segments showed growth, respectively 2.7% and 4.6%. All

other segments declined.

• Increase in volume was mainly visible in the segments of frozen dog food (12.3%; 467.9k kg

volume growth) and dog chew bones (4.3%; 435.7k kg volume growth).

• The highest increase in units sold were in frozen dog food (12.2%; 1.2m units) and other cat

food (11.2%; 1.1m units).




Millions

1.0

0 0 0 1 1 1 1

Pet

Accessories

- 2.4

- 5.2

- 2.8

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

Dog Food

Other Pet

Food

Cat Food

.

Millions

PULSE REPORT

4.8%

60.8%

34.5%

Dog Food Cat Food Other Pet Food

Spain

15

Eu

ros,

in m

illi

on

s






197

27

347

347

27

197

6.7 0.86.9

Dog F

ood

Cat

Food

Oth

er

Pet

Food

Mil

lio

ns


KEY TRENDS

• The pet food market showed good health

due to the value sales growth of three

segments: dog food (+6.9%), cat food

(+6.7%) and other pet food (+0.8%).

Private label has reached 48.8% market

share and is higher in the dog food

segment (55.5%).

• Dry dog food experienced major value

sales growth (+7.2%). Wet dog food

increased by only +3.0% in value, as this

segment has a higher level of private label

presence (+75.2%). Wet food is a more

expensive product, but private label

focused on formats with large volume,

whereas branded manufacturers focused

on single serve products with a higher

value but less weight.

• Cat food experienced a growth of 6.5% in

value. This increase in value was due to

the success of single serve products.

PULSE REPORT

Spain

16

CATEGORY KEY FACTS

• All categories continued to grow. Dry dog food, the largest and cheap, along with snacks for

dogs and cats, the newest and more expensive, were the sectors with major growth. On the

other hand, private label continued to gain position, absorbing most of the growth of the

market.

• Snacks and prizes, or treats for dogs and cats, continued gaining presence, increasing their

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

small, but has almost doubled in sales. Both monopolised a big part of the launches in this

sector as a way of gaining added value and differentiation.

• Private label brands gained share. This major increase was in value as opposed to volume.

This demonstrates that retailers’ own brands of major quality and added value are not

bought on low prices alone.




Millions

22.5

12.3

0.2

0 5 10 15 20 25

Dog Food

Cat Food

Other Pet

Food

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

Millions

PULSE REPORT

5.1%

48.9%

44.2%

1.7%


The United Kingdom

17

Eu

ros,

in m

illi

on

s




Value sales (€) and % change versus year ago


964

112

37

1 065

1 065

112

964

371.7

-23.8 0.6 0.2

Cat

Food

Dog F

ood

Pet

Accessori

es

Oth

er

Pet

Food

Mil

lio

ns


KEY TRENDS

• During the year ending Q1 2014, the pet

market in the UK had modest growth of

0.3% in value sales, as opposed to 3.9%

growth during the same time last year.

• Cat food saw its share decline by 0.1% to

48.9% compared to Q4 2013, whilst dog

food grew by 0.2% to 44.2% share of

value sales.

• Pet accessories also had modest growth of

0.6%, and other pet food declined by

23.8%.

• Promotional activity continued to be below

the total grocery level, but did increase

from 42.5% (12 weeks ending December)

to 47.4% (12 weeks ending March). Cat

food during these latest 12 weeks was at

56.5% and dog food was at 40.1%.

• Dog and cat food private label growth

slowed to below the branded growth rate.

Private label value growth was 0.55% and

branded was 0.64% during the latest year.

PULSE REPORT

The United Kingdom

18

CATEGORY KEY FACTS

• Dog food was the biggest contributor to value growth in the pet market during the latest year

and the sectors which contributed the most were dog treats and chews. These two sectors

accounted for 82.7% of the added value sales for dog food.

• Cat food’s modest increase came mainly from cat treats and single serve products.

• At a sub brand level, new product development (NPD) in the cat and dog food category

contributed only 1.6% of value sales. NPD in the dog food sector contributed 2.4% of dog

food sales, whilst cat food NPD only saw 0.9% of cat food value sales.

• During the year ending Q1 2013, the average price per kilo rose by 3.9% for total cat and

dog food. This year it rose by 4.2%. Significantly, own label increased their prices by 1.7%

last year, but this year the increase has been 6.0%. Branded products increased by 4.9%

last year and this year by 3.5%. Private label still maintain their 18.7% value share of the

market, but have dropped from being 29.4% cheaper (last year) to 28.0% cheaper this year.

• With value growth better than unit growth and volume growth, the category is still moving

towards smaller, more expensive products.

• Cat litter value sales declined by 0.1% during the latest year.

Source: IRI retail databases; Period ending 30 March 2014



Millions

15.9

2.3

0.7

0 5 10 15 20

Dog Food

Cat Food

Pet

Accessories

- 11.5

-15 -10 -5 0

Other Pet

Food

.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 Q1 2014

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