Overview
In 2007, the Italian pet products market continued to grow, increasing by over 5 percent in value. The leading factors for this growth are mainly three: decrease in tendency for home-cooked food for pets, although it still represents 44% of pet food consumption in Italy; the increasing importance of the role of pets in Italian families; and the pro-active role of distribution, both through the grocery store channel (supermarkets and hypermarkets) and in specialized pet shops, including garden centers, which are devoting more space to pet products.
In Italy, there are now 60 million pets in a country of 58 million people. In particular, Italy occupies a top position among European countries regarding dog and cat populations. Cats are the most common pets in Italy. According to the most recent estimates, there are 7.5 million cats and 7 million dogs in Italy. Assalco’s data states that there are 4.6 million families with at least one dog and 4.5 million with at least one cat, while 5 million families have other types of pets.
The role of pets in Italy has changed over the years. Pets have come to be considered as real friends, and even as psychological aids. This new role has several causes: a lower birthrate, changes in the family structure, a higher number of singles, an increase in regard for animals, and a longer average human life span. This increase in the number of pets within Italian households translates into greater care and into higher expenses, both from the nutritional and health point of view and the accessories and services provided.
The market for industrial or commercial pet food has also increased greatly in recent years. This growth is mainly related to a greater demand for specific types of pet food. The industry has been developing new lines of pet foods that meet very specific needs related to the age (for young, adult and older animals), lifestyle (high-energy or light diets), and health condition (for diets that prevent allergies or address certain diseases) of pets. In short, dog and cat food is becoming more and more “customized”.
In 2007, cat food in Italy represented 38% of the pet food market and was valued at $915 million, a 4.6% increase over the previous year. Dog food on the other hand, while it represents only 25% of the market, was valued at $616 million, an increase of 6%. In particular, premium cat and dog food registered the highest increase, respectively +5% and +7%. For cats, the consumption of wet pet food is still predominant, with 40 percent of the total market in value compared to 18 percent for dry food. For dogs, on the other hand, the share in value of wet food is 18 percent and 20 percent for dry food. The snacks and treats segment for both cat and dog count for 4 percent of the total market size. There is also an increasingly more targeted segmentation of pet food, especially in the dry food division. Pet food is targeted at pets according to age, needs (such as overweight or specific intolerances) and to size and breed. The evolution of this trend is a new type of food, whose added value is the prevention and treatment of some diseases.
According to the U.S. Census Bureau of the U.S. Department of Commerce, U.S. exports of animal feed to Italy recorded a 75% increase in 2007: $30.7 million versus $17.4 million the year before. More recent data show that U.S. animal feed exports to Italy in the January-October 2008 period totalled $27.1 million, an increase of 4% over the same period in 2006. Although these data reflect the good performance of the euro in the past two years, the high quality standards of the U.S. pet food, especially the premium and specialty food, in addition to the increased market needs, are the main reasons of this extraordinary export data. Despite the economic global turndown, this sector seems to be holding up rather well.
Apart from pet food, other non-food pet products tend to boast higher margins and are becoming more interesting to large-scale distribution, although Italian consumers still prefer to purchase litter, accessories, hygiene products, supplements and medicines from specialized shops. As owners enjoy spoiling their pets more and more, the percentage of sales of accessories and the search for increasingly personalised products are also increasing. Two sub-segments that are performing particularly well are the upscale, luxury products and the reasonably priced products. The pet care and comfort products segment, which accounts for one-fifth of the market, is worth about $650 million.
Best Prospects/Services
Dry cat food and super premium dog food continue to display the best sales trends in Italy. Positive trends are also assured for snacks and smart treats, especially for nutraceuticals, snacks that are made to ensure a greater nutritional balance for animals.
The trend of expenditures for accessories and services is also increasing, in particular with regard to pet-care products. These trends indicate that in the next few years the market will also see an expansion in the pet care and complementary products segment, as well as in the products for pet healthcare.
The market is showing a fast development with greater attention to design and segmentation of products. Nail polish, fur dye, deodorant, and sun creams, anti-stress sprays are just some of the products launched successfully. It is interesting to see that in the fish segment some companies have also committed greater effort towards product innovation.
