They can be big or small, pedigrees or mutts, playful or aggressive … and they will stay this way, for while the crisis has had a negative impact on most markets in countries in the Americas, this has not been the case for the pet market.
In Latin America and The Caribbean, pet-related accessories and food are growing markets that have not yet reached their peak.
Pet owners, meanwhile, here and in the more mature North American market, have become more and more like parents to their pets; they have a relationship of love, a feeling that does not know of crisis and recessions.
* More food for the same pets, even in a recession;
* The trend towards “humanisation” spreads in Latin America;
* Eccentric pets of the virtual and the real world immune to the crisis.
* Pet Parents appearing with new needs. In the United States and Canada this is a trend that has been growing for many years now, but in Latin America, this is a novelty which implies many new needs and more consumption of products and services such as of gifts and toys, training schools, apparel and hairdressing;
* Not everything has been invented in the pet world. The crisis has greatly reduced the possibility of spending for millions in the Americas, but some still allow themselves to get enticed by eccentric articles, weird pets and innovations;
* The recession has made markets mature. The rise of unemployment and other consequences derived from the crisis have caused a sudden change in the way people spend their money. People now try to save and avoid unnecessary purchases. However, this does not mean that, suddenly, all markets have either matured or plummeted. In a great part of the continent, the dog food market is an ascending curve and sales keep on surprising;
* What type of buyers are Pet Parents? They can either be retiring baby boomers, families with small children or members of Generation X that leave their family homes late, but they all have something in common: for them, animals have almost the same rights as men, and deserve love, respect and attention, most of all.
Dogs and cats have been human companions for thousands of years. However, it was not until the 1860s that commercial pet food products appeared in stores. Almost a century and a half later, products have become diverse and the relationship between men and animals has changed: nowadays, pets are part of the family.
Food and accessories have become popular in North America, although from Mexico and downwards, dogs were fed with leftovers and rarely visited a vet, according to the Pet Food Institute. The situation, however, started to change in the 1990s, and pet care became trendy after the Millennium.
Euromonitor International data shows that North America has had the largest population of dogs, cats and other pets across the continent in recent years. In 2009, nearly 402 million pets lived in the United States, or more than one animal per capita.
This figure has been largely constant over the last decade, which it explained by the saturation of pets in homes (3.4 per household in 2009). Canada ranks second in the continent with 0.8 pets per capita.
In Latin America and the Caribbean, the trend is reversed: in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela today there is a population of 155 million pets, a considerable growth on the 116 million in 1999.
In both regions, however, markets have grown considerably in food for dogs and cats, medicines, accessories and services.
The credit crunch, while having an economic impact on the families who own pets, appeared in the middle of a developing trend seeing the greater humanization of pets and the expanded role of their caretakers. Pet Parents are a part of this trend, and will take care of their pets even in moments of crisis.
More food for the same pets, even in a recession
Can the crisis crumble expectations in a dynamic and growing market? In the case of pet food, it cannot. The recession has hit hard in many markets, except in this one: while the dog and cat population in the Americas remains almost stagnant, the amount of dog food sold on a daily basis has risen to an unprecedented level, especially in Latin America.
Maybe the owners are stressed out and are paying less attention to their pets, buying them more to compensate, or they feel prices of pet products have dipped while food prices have risen, but the fact is that consumers buy more and better food for their pets.
Chile's case is paradigmatic. According to Euromonitor International forecasts for 2011, Chilean households will spend US$90.4 on dog and cat food in real terms (at 2010 constant prices) surpassing Argentina (US$59.90) and Brazil (US$89.7).
In the pet food market, the main distribution channels are grocery retailers (with 54% of the market in 2009 in the USA and 67.8% in Canada), although the sales in specialised stores are also growing (sales through pet shops and superstores rose from US$8.8 billion to US$10.9 billion between 2005 and 2009 in the Americas, according to Euromonitor International data on retailing.)
What is surprising is that even in a recession, the market has been growing and will continue to do so at rates of 6.7% and 6.0% in Latin America and North America respectively in 2011.
In Latin American countries like Chile, the percentage of pet food prepared at home is still high -between 60% and 70%, although the percentage falls year after year, while sales of processed pet food sold through retailers grows.
“Latin America is far from the consumption that goes on in developed countries, for it is two or three generations behind in the understanding of pet care, starting with the proper nourishment, regular visits to the vet, exercising and safety … but we have come a long way,” according to Eduardo Baldrich, spokesperson of the Pet Food Institute (PFI), a US-based institution that represents pet food manufacturers.
He added that there is also a “growing trend towards the purchase of accessories and toys for pets, from collars for cats and dogs, to beds, balls, and hair accessories.”
The same happens in other countries. The Peruvian food company Alicorp expected to have ended 2009 with a 15% growth in their global sales, and 5% in Peru. Its General Manager, Leslie Pierce, recently told Reuters “2009 will have been a record year for the company, despite the effects of the international crisis”.
In Panama, the economic magazine Estrategia & Negocios quotes research that analysed the performance of 300 product categories during the crisis, and assures that among the few ones that have grown, there is the segment of “food and care for pets”, with a 15% expansion in 2009´s first quarter.
In mature markets like Canada and the USA, some trends are driving the consumption of products for pets that have nothing to do with the products themselves, but with the distribution channels. An investigation by CNN Money showed that there are “Recession-proof stores” and mentions “pet stores that will probably continue to generate sales volume but their profits will contract”.
The article says that “even in a recession, dogs will be fed and kids will get their toys. This bodes well for pet supply stores and toy sellers”. One of the analysts considers that “Americans love their pets. Pets have to eat”, which is why specialised channels increase their earnings by tempting their clients with accessories.
The trend towards “humanization” spreads in Latin America
Can you imagine a world where pets are baptized in the town's church, where dogs and cats walk the streets claiming their rights, or where they take part in a marathon, awards included? Well, wait no more, in the Americas this world already exists.
Situations like these and many others show that there is a trend among Pet Parents to “humanize” their pets, who now practice activities with their “friends” which before were exclusively for human beings.
Animal Day, celebrated in April in several Latin American countries, reflects how in Latin America, the trend of treating these creatures as human beings, is rising and increasingly visible.
In Chile, for instance, a conservative society that conceived their animals as “companions”, two recent events showed how humanization is spreading. The first one concerned pressure from animal associations for a new law on dog tagging via microchip and a national register for dogs.
The law included an article that talked about “dangerous dogs”, although Congress had to eliminate it, for the owners of breeds like the Rottweiler sought equal “canine rights”, the newspaper La Tercera revealed.
For the paper, this is about a “change in behaviour”. The other event coincided with Animal Day, also dedicated to Saint Francis of Assisi. Dogs and owners walked in a religious procession, asking for peace and responsible care for pets.
In Mexico, since last year, dogs have enjoyed the privilege of their own holiday. It is called “Dog Fest” and it was celebrated on October the 11th. The idea is that pets should celebrate, while they promote their rights to be properly taken care of “both indoors and outdoors”.
The event became so popular that the Ministry of Health held a press conference to announce its support for the festival. In Venezuela, an “unusual¨” march was held to raise awareness about pet abuse: dogs and cats took part, alongside their owners, and there was more: iguanas, birds and horses also walked the streets.
Meanwhile, canine couture recently arrived in Brazil. Sao Paulo, Brazil's financial capital, celebrated its first Pet Fashion Week during April. Following the example of similar events in New York, Tokyo and elsewhere, it was regarded as a great success by Brazilians.
Local and global companies presented the latest trends in clothing and accessories for dogs and cats. The brand Manfred of Sweden presented the most valuable accessory at the show: a dog coat encrusted with 5,000 Swarovski diamonds. This item retails at US$21,000.
Eccentric pets of the virtual and the real world immune to the crisis
Other items that do not seem to have been affected by the crisis are gadgets and eccentric pet choices. Concerning animal species, for instance, in Latin America, “weird pets” are enjoying their best moment.
Last October, The Milenio newspaper of Mexico published an article on how “Exotic animals do not suffer from the crisis”, in which it pointed out that more and more people are demanding “snakes, tarantulas, iguanas, boa constrictors, pythons and even tigers”.
In this country, as in many others in the Americas, government authorisation of exotic pets is mandatory but in some cases, the authorities have found themselves “overwhelmed” by the number of requests. The newspaper confirms that “despite the economic crisis, people keep on investing large amounts of money to acquire pets and exotic animals”, and that “these need better care, for they end up spending more on accessories, cages, toys and other things.”
Additionally, the demand for cosmetic services for pets has increased despite the recession: “The concept is new and very successful, even though it is not a basic need”, explained Rubén Cavazos, of the Mexican Canine Federation
In the virtual world, Sony has created a sophisticated pet for its PlayStation III console called EyePet, which, according to experts, will outdo the experience with the once famous Tamagochi. It works with a video camera located inside the console, and through a technique known as Augmented Reality it allows the creation of a virtual pet, which interacts with its owners.
In the United States, where the demand and offer of pet-related products is huge compared to the rest of the continent, the eccentricities of celebrities encourage consumption in the high income sectors. This is the case of Angelina Jolie and Brad Pitt, who bought a custom made labyrinth for hamsters costing US$75,000, according to the tabloids.
This occurs in a moment when the so-called Zhu Zhu pet hamsters are invading the USA. They are innovative, realistic, interactive, plush, and artificially intelligent hamsters that talk and move around in their own play sets.
Concepts and feelings like “conscience”, “care” and “love” re emerge strongly in a moment where pets, besides being animals, have also become friends, companions and almost human members of the family which is why the latest marketing campaigns directed to pets talk about these trends.
In most of Latin America, the most famous ones are the Pedigree campaigns, which support shelters for abandoned dogs in almost ten countries all over America.
Leaving aside the market trends, in the Americas, Pet Parents are showing that with their pets, they enjoy a relationship based on love, friendship and care, a bond that does not break easily in times of crisis, at least not in most of the families in the Americas.
For further related articles, please visit Euromonitor International .
15 July 2010