Billion-dollar kibble

Interzoo 2018

Our petcare specialist was in Nuremberg for the industry’s major trade fair.

Interzoo 2018 drew record crowds this year, with nearly 2,000 companies exhibiting. Access to the Interzoo trade fair is limited to industry professionals. Thorben Wöltjen, Oaklins' petcare specialist, was there tracking innovations in the sector. He joined business leaders and entrepreneurs from 117 countries from around the globe who are guiding growth in a market with revenues that reached over US$100 billion last year. Thorben pointed out two key trends in global petcare.

The increased interest in healthy pet products is driving the growth of exclusive, premium and super-premium brands. “Pets have become part of the family and people decide very carefully what to feed them. As price and quality often correlate, many pet owners are choosing premium products and spending more per kilo each month. What’s more, many consumers are buying smaller dogs, which leads to a decrease in packaging size but to a further increase in price per kilo. So, it’s rather a growth of value rather than of volume that we see today,” remarked Thorben.

Continuous, resilient and positive development, the existence of niche markets and the possibility of earning high profit margins make the petcare sector an interesting market for financial sponsors and industrial players. In the first quarter of 2018 alone more than 20 major M&A deals have taken place in the sector.

There was a lot of talk when giant food manufacturer General Mills acquired Blue Buffalo, maker of natural treats and food products for dogs and cats, for US$8 billion earlier this year. It’s an example of another large transaction where a food manufacturer buys into pet food, following Smucker’s deal with Big Heart Pet Brands in 2015.

Along with an appetite for pet food is a demand for pet accessories. Another area to look out for is the increasing digitalization of online petcare supplies available to the public. Such innovations are boosting market share by quickly tracking consumer trends to stay ahead of the curve.

When searching for the next big wave in petcare, our specialist recommends keeping an eye on consumer demands in the USA and Canada. They tend to be the starting point for evolution in the industry. “What you see there you will see a year or so later happening in Europe and then moving into the Asian markets,” he tells us.

Thorben will be the keynote speaker at the International Pet Conference taking place this year in Budapest from 9–10 October. He would be pleased to speak with you about the potential of your petcare business and future investment and market opportunities.