As pet ownership in India rises, the pet food market here is poised for growth. However, pet food manufacturers are still striving to bring about a change in the mindset of pet owners, most of whom prefer to feed their pets home-cooked meals, which are relatively inexpensive, rather than store-bought pet food.
Industry estimates show that the pet food market is growing at about 13-15% annually, with only 10-12% household penetration. According to Euromonitor International, the pet food category is worth Rs 2,284 crore; industry watchers say dog food accounts for nearly 85% of this market.
There is, undoubtedly, headroom to grow, which is why the category is attracting interest from a number of Indian and multinational players, as well as entrepreneurs. Mars Pet Nutrition, Indian Broiler Group (Drools), Stylam Sydney, Cargill Inc, Nestlé (Purina Petcare) and Himalaya Drug Co. are some of the leading brands in the category.
High cost: a pet peeve
India has an estimated 19 million pets, of which 80% are dogs. "The pet food market is witnessing a strong double-digit growth owing to an increase in pet humanisation; people are willing to spend more on their pets," says Neeraj Talele, associate, packaged food, Euromonitor International.
Pets may have come a long way in Indian homes - from being guard dogs to becoming family members - but pet owners still hold back when it comes to purchasing expensive pet food. "Packaged pet food for a medium-sized dog costs Rs 620 per week. Therefore, consumers invest in pet food for the first 12 months of the pet's life; and once the pet is an adult, the animal is put on a home-cooked diet to cut cost," says Dr Shashank Sinha, national sales director, Drools.
Low awareness about the high nutritional value of manufactured pet food and the high cost have resulted in pet food having a 'low calorific coverage' (share of stomach) among pets. Ganesh Ramani, general manager, Mars Pet Nutrition India, says the contribution of manufactured dog food, in terms of calorie consumption, is now in the mid-single digits.
According to industry watchers, most of the sales come from Mumbai, Delhi and Bengaluru, because of higher awareness in these cities. Brands are ramping up marketing efforts in tier II and III cities, where retaining consumers is a challenge.
Try and buy
Pet food brands don't tend to invest heavily in mainstream media for advertising; instead they are spending their marketing budgets on acquiring consumers through activations at events/ pet shows, sampling at vet clinics and pet stores, discounts, awareness drives, etc.
Consumer acquisition cost is consequently high in this category. Besides, as the number of target households is much narrower than in other categories such as FMCG, consumer acquisition is tougher in this category.
"The perception among consumers is that a high investment in buying pet food is risky because the pet may not enjoy the food, thereby wasting it. Therefore, we have introduced Rs 10 pouches for both cats and dogs," says Sinha.
Even established brands like Pedigree are mindful of pricing products right. "When we launched biscuit brand Biscrok in India last year, 50 gm packs priced at Rs 15 were introduced, so that pet owners would be encouraged to try the new product. We also have Pedigree available in 100 gm pouches for Rs 20," says Ramani.
Brands focus on supermarkets, grocery stores, and pharmacies in addition to veterinary clinics and pet shops for offline distribution. They also rely heavily on e-commerce to supplement distribution and sales.
According to Talele, "the fast-paced growth of pet food sales through e-commerce is one of the factors contributing to the deep market penetration." E-commerce is reducing barriers for pet food brands to amplify distribution in tier II and III markets. Brands are also roping in influencers and celebrities to spread the word. Actors Disha Patani and Jacqueline Fernandez endorse Drools. Pedigree, too, runs a consumer engagement initiative which is aided by influencer marketing.
There are also players operating in the niche category, catering to a section of hyper-aware consumers who don't mind spending. "There is a significant market for organic treats and natural products among high-end consumers in the metros," says Bhupendra Khanal, founder and CEO, Dogsee Chew, a niche pet food company.