The European pet food market has continuously expanded during recent decades. This can be explained by a long lasting growth in pet ownership, by the decreasing use of table scraps and the general trend toward convenience foods. In the past years the situation in Western Europe has changed and the growth rate of the market has slowed down in many countries so that a mature market situation has developed. The market split into different segments.
Pet owners’ demands for premium products and sophisticated accessories for their animals have led to an increase of sales in those sectors. On the other hand, it is obvious that other pet owners have a requirement for pet foods that fulfil the nutritional needs of the animal at reasonable prices. This trend has been strengthened by the unfavourable economic situation of the last years.
Another important aspect for the pet food market is the fact that the European Community has expanded and will expand in the future. The applicant countries offer promising opportunities due to the lower level of calorie coverage by prepared pet food and the expected growth of the markets. But even in the old member states of the European Union there exist considerable differences among the countries. Although the standard of living in those countries is more or less comparable, there are obvious differences in the habits of keeping pets and the traditions of pet feeding that affect the market. Europe is not uniform. The European countries differ in population density of dogs and cats, the calorie coverage by commercial pet foods and the balance between commercial foods and the traditional ways to feed pets with table scraps.
The European pet population in 2004
The number of households with pets is estimated by the European Pet Food Industry Federation (FEDIAF) to have reached 55 million. The number of cats is higher than the number of dogs; and estimates are that 47 million cats and 41 million dogs are kept in the Western European countries (FEDIAF, 2004). A population of 35 million pet birds, 9 million aquaria and 36 million other pets, mainly rodents and small mammals, but also reptiles, must be considered as another important segment of the market. Over the last years, certain trends have been observed. The number of dogs tends to be stable or in some countries slightly decreasing while the number of cats is increasing. Based on a total number of households in Western Europe of 155.6 million, it can be estimated that 21% keep dogs and 20% keep cats with an average number of 1.1 and 1.4 dogs and cats, respectively (FEDIAF, 2004). The number of cats has increased and the trend to keep more than one cat per household is observed in many countries (ZZF, 2001). This trend reflects the popularity of cats as a ‘lifestyle adapted’ pet, and may also be explained by the recommendations to facilitate socialisation by keeping more than one cat, especially in households where cats must stay alone over longer times during the day. The trend for the number of dogs to decrease can be explained by the fact that lifestyles of pet owners have changed. In addition, the selection of dogs as pets has also been subject to other influences. External factors have had great impact on the public opinion towards the role of dogs as pets. In recent years it has become obvious that keeping dogs as pets is a very sensitive topic for the public.
Discussions have come up on the role of dogs in urban environments regarding problems for public hygiene. Additional controversies developed after some unfortunate accidents with dogs that induced a negative picture of ‘dangerous’ dogs and dog-keeping in general in the media. For instance, in Germany a discussion along these lines developed after a series of bite attacks by dogs was picked up by the media including one severe accident that killed a young child. This unfortunate event focused public opinion transiently but strongly against ‘aggressive’ and ‘dangerous’ dogs and consequently induced a general discussion on dog keeping. This had a negative impact on the number of dogs, as documented by the statistical data (Table 1) of the German Kennel Club (VDH, 2003). These figures show the trend of the dog population in Germany, which is one of the five countries (together with France, the United Kingdom, Italy and Spain) in Western Europe with strong economic impact on the feed industry.
Table 1. Number of puppies registered by the German Kennel Club.
VDH, 2003; 2004
The stable or negative trend in the dog population is also observed with regard to dog breed and dog size preferences. In Europe the number of small sized dogs (<10 kg BW) was estimated to be 34%, the medium and large sized dogs make up 37 and 29% of the total population (Euromonitor, 2001). The southern countries (France, Italy, Spain, Portugal) have a certain preference for smaller dogs, while other - especially the northern - countries seem to prefer larger breeds. This preference is seen in Germany, Belgium, Netherlands, Denmark, Norway, Sweden, Austria, and Switzerland. However, the number of large dog breeds is decreasing and a shift in the dog population can be expected towards smaller breeds in many of these countries.
Regarding the age structure of dogs in Western Europe, it is estimated that 9% of the dogs are younger than two years and 16% older than 10 years. The number of older animals in the United Kingdom (23%), the Netherlands (21%), France (18%), and Germany (17%) is above the European average. Lower numbers are seen in Portugal (7%), Norway (11%), Italy and Spain (12%) (Euromonitor, 2001).
In contrast to the dog population the number of cats has increased steadily in recent years. This development has huge economic consequences for the related industries. Data on the total cat population in Europe differ, but in most countries of Western Europe the number of cats is considered to be either stable or increasing. France, United Kingdom, Italy and Germany are the countries with the biggest cat populations (Euromonitor, 2001). Regarding the number of cats per household, differences are obvious.
The estimated average number of cats in Western Europe is 1.4 per household. Households with more than one cat are seen more frequently in Austria (2.2), Switzerland (1.8), Belgium (1.8), Norway (1.8), Spain (1.7), the United Kingdom (1.6), and Italy (1.6). Regarding the age of domestic cats, 26% of the total cat population is younger than two years and 18% is older than 10 years. Countries with a higher population of older cats are the United Kingdom (29%), the Netherlands (23%), Germany (22%), Sweden (21%), and Switzerland (19%).
The situation in the application countries and in Eastern Europe is difficult to predict because no statistical data have been documented in the public literature. Assuming that the density of dogs and cats is comparable to Western Europe, it can be expected that these countries offer a dynamic and promising area for future economic activities. The markets for pet food and care products are relatively undeveloped and the use of prepared pet food is much lower compared to the Western European countries.
Demographic and social factors
Several facts must be taken into consideration when speculating about the future of the European pet food market. The current population dynamics in Europe show negative trends in many countries. Birth rates have slowed or are decreasing, and the median age of the population is increasing. In many countries a trend toward urbanisation with higher numbers of households and lower numbers of persons per household is observed. In addition, lifestyles have changed. Individualization is important for many young people, and the length of time a person is out of the house over the day or for longer periods has increased.
Traditionally, mobility has been lower in many countries of the European Union compared to other parts of the world, but due to the changes in economic conditions and lifestyles of young people, it has increased in recent years. Statistical data are available to support these assumptions. Taking figures for Germany as an example (ZZF, 2001), most pets are kept by owners aged 35-49 years (39% of all pets) with a clear relation to the number of family members. Pets are often kept in families with at least one child (46% of all pets), lower frequencies are found in single households (22%) and with couples without children (32%).
Based on a recent statistical evaluation in Germany (ZZF, 2003) with 30,500 interviews, this trend must be interpreted in light of some new aspects. According to this investigation, couples without children and singles represent on a household basis 60% of cat owners, 59% of dog owners, 58% of the pet bird owners and 48% of the aquarium owners. Singles seem to prefer cats as pets, dogs are only second choice. This fact is important, because in Germany and in other countries it can be expected that the number of households, either singles or couples without children, will increase and will make up about 72% of the total number of households in 2010. It can be expected that the number of cats will be increasing in the next years because cats are more suitable for this household structure than are dogs. The population of dogs, pet birds, and also of small mammals, which is currently still expanding, will probably decrease. These important demographic trends are comparable in many other member states.
On the other hand, changing lifestyles of pet owners have other effects on the development of pet markets. Importantly, these demographic changes also affect the position of the animal in society. Humanisation of pets is obvious, and can be explained by the demographic changes bringing pets into a specific role as social partners. This development has been noted and further supported by the marketing strategies of pet food and supplier companies. Seeing pets as beings with equal or at least similar requirements as humans means that many owners are willing to spend more time and money to indulge their animals.
Pet food industry and market expectations
The market for pet food and related products is mature in most Western European countries. Volumes of dog food are falling in several countries, inducing a general fall of pet food volumes, but not necessarily on a sales basis. FEDIAF estimates the total number of pet food companies in Europe at 450 and the current volume of all pet food is estimated at 5 million tons with an estimated sales value of 8.5 billion € (FEDIAF, 2004).
The growth rate of the pet food industry was 3% over the last three years (2001- 2003), which is a reasonably good result compared to stagnation or negative growth rates in other industries. The number of employees in the pet food industry was 21,000 persons working directly in the industry. Another 30,000 persons are estimated to work indirectly for this industry. The significance of the pet food industry for the total agricultural sector is becoming increasingly important. The yearly purchase of agricultural by-products in the European Union was 2.75 million tons (FEDIAF, 2004).
Manufacturers will have to continue to be innovative, because innovation will be an important feature of successful companies. However, in recent years moderate increases in quantity have been accompanied by falling returns in the market for ready-mixed pet food (Siessegger, 1997). The distribution and retail channels have changed significantly in the past years. Traditionally, pet food was either sold in grocery stores or in many European countries by small, traditionally structured ‘over-the-counter shops’.
Many of these offered a good standard of products and had a specific strength in advising customers. On the other hand, small shops have lost significant market share all over Europe due to the competitive price situation. The relative significance of grocery stores and specialised pet food markets has increased. The small solitary shops have and will probably maintain a certain niche with higher priced products and with products that need more explanation for the consumers. Another specific target group for this sector is non-experienced owners that need more continuous advice. While the volume of pet food has reached a certain plateau in Europe, the situation in the individual member states differs. It has become obvious that customer demands are increasingly orientated toward premium products, treats, and in the segment of complete diets toward dry food in dogs (Figure 1). Similar trends can be observed for cats.
Pet owners have different and specific expectations that pet food should fulfil. Consumers have a demand for high quality standards in each price segment. Safety, nutritional adequacy and health promoting effects of pet food products are an important issue. ‘Healthiness’ is a major aspect for many consumers, especially those who are prepared to pay higher prices for premium products. Another group of consumers do not consider health aspects a priority, but they expect that the pet enjoys eating a specific product or that they themselves are enjoying feeding the specific product to their pet. A third group of pet owners is mainly interested in getting access to reasonable products at economic prices. All will expect not only high nutritional value and adequacy, but also high palatability and digestibility of the food.
In many of the western European countries issues have been raised around the ethical aspects of pet food. Since the BSE crisis certain raw materials are no longer used by the pet food industry and have been discarded from the pet food chain earlier than from the human food chain. The ingredients of animal origin must be approved by the veterinary service and must be fit for human consumption, otherwise they cannot be used for pet food production. In the higher price segment it is expected by consumers that manufacturers conduct additional controls in their plants to assure optimum quality of the ingredients.
Future developments are difficult to predict, but it can be assumed that the trends of the last five years will continue: a considerable and growing part of the consumers will demand premium quality and will be prepared to pay adequate prices. Quality, safety and nutritional adequacy will be an ongoing issue for this group.
Functionality of pet food is debated and will result in new products, but in this aspect the European perspective seems to differ from other parts of the world. In Europe, the use of dietary supplements is less common in humans and therefore consumers are less willing to use functional supplements for pets. On the other hand, many benefits of functional pet foods will be appreciated: palatable treats with specific functionality, products with proven efficacy in the promotion of well-being, health and longevity, and products of natural origin.
Figure 1. Market trends of moist, semi-moist, dry pet food, mixers and treats for dogs in the United Kingdom (PFMA, 2004).
Author: JÜRGEN ZENTEK
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FEDIAF. 2004. www. fediaf.org/ pages/figure.html. Accessed 02/22/2004.
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Siessegger, A. 1997. The German market for readymixed pet food. Der deutsche Markt fur Heimtier- Fertignahrung. Kraftfutter 3:108-109.
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Institute of Nutrition, Department of Veterinary Public Health and Food Science, Veterinary University of Vienna, Austria