Cat food as growth driver in Europe

The pet care category has not been hit that drastically by the economic recession. Value growth across Europe after the first quarter of 2013 is still positive, however it is slowly declining compared to the year ending Q4 2012. While we observed a positive development for value growth at +2.9 per cent at the end of the last year, the increase for the entire category is now lower at 2.7 per cent compared to the same time period a year ago. Although the entire category growth is currently not as strong as it was in past quarters, its trend is once again far better than that of other consumer packaged goods (CPG) categories.* The value growth stated for pet care is clearly driven by an increase in prices rather than an increase in volumes. Price inflation in all countries and strong development of more premium sectors affect the big picture and push value sales. In addition to higher values, we see decreasing volume sales resulting from a dynamic trend towards smaller packaging. These two ends of the story lead to a very polarised picture of shopper behaviour within the category - on the one hand, consumers tend to buy smaller packaged premium products e.g. snacks or tiny single serve cans in order to indulge their pets. On the other hand, the difficult economic situation in several European countries forces consumers to watch their budget - convenience products by low-priced brands and private labels attract their attention.Cat food is on fireIn all countries analysed, cat food still functions as the main growth driver for the entire category, showing fastest growth amongst the different pet food segments (+€132 mio, France and UK both nearly at +€50 mio). The huge success of single serve feeding with wet cat food is reflected in the trend towards smaller packaging and higher prices. We can observe that especially the pouch format has leveraged wet cat food to a whole new level - small packs that are sold at very high prices compared to cans or flexi trays. Although dry cat food also contributes to cat food growth, the wet segment is where growth is coming from. Major brands launch many new products onto the market, while their point of innovation is clearly on premium tastes, small sizes or new, user friendly packaging.Snacks are a dominant featureWhen comparing different trends and trying to find out what actually works within the category, you can see that success stories are exactly the same in the countries mentioned above. Wet cat food is the largest…