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 A Euromonitor International Report
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hanging lifestyles in the form of the rise innuclear families and double incomehouseholds have encouraged the growthof pet ownership in urban areas of India.Increasingly, pets are being looked upon ascompanions and members of the family rather than as guard dogs for example. Pet ownershave started to take an interest in their pet’sdiet, health and grooming. A gradual shift towards prepared pet food has been observed.Pet owners are more willing to spend on petfood and pet care products than ever before.This trend has spawned an entire industry, witha growing emphasis on pet care.Most of the branded pet food is imported. Thegovernment’s reduction of the import duties onpet food in 2007 provides a boost to bothmanufacturers and importers.But the ban on imported pet food due to theoutbreak of Avian Flu in year 2006, whichcontinued through 2007, resulted in thereduced availability of pet food. A few foreignbrands such as Royal Canin and Bento Kronenescaped the ban, but others like US brands ProPac and Purina were impacted. On the otherhand, locally manufacturing looked up.According to Euromonitor International,veterinary clinics and pet shops remained aleading distribution channels for pet food andpet care products in 2007. But more and moreretail outlets and supermarkets startedemerging as viable distribution channels. Thishas reduced the influence of vets on consumerpurchasing decisions.In the days to come, with pets increasingly being  treated as companions and fashionaccessories, pet owners, especially in the urbanareas, are expected to spend more on theirpets.
Key Trends and Developments
Pet owners in India have traditionally relied onvets to provide them with guidance on taking care of their pets. The influence of vetsstretches beyond the realm of vaccines andextends to advice on pet food. Thus, over theyears, manufacturers have pitched theirproducts to vets, and focused on getting them torecommend products to pet owners. Most vetsin India sell pet food and pet owners traditionallypurchased pet food from vets. However, as petowners become more familiar with differentbrands of pet food and pet care, they areincreasingly becoming the decision makers andmaking their purchases elsewhere. This trendwas shown by veterinary clinics’ decreasing share of retail value sales of pet food and petcare products; its share decreased by slightlyover four percentage points between 2002 and2007. This gradual decline in share indicates
Pet Industry 
In India and China
MOST OF THEBRANDED PETFOOD ISIMPORTED. THEGOVERNMENT’SREDUCTION OFTHE IMPORTDUTIES ON PETFOOD IN 2007PROVIDES ABOOST TO BOTHMANUFACTURERSANDIMPORTERS.
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 that pet owners are slowly, but surely, becoming empowered in making their own decisionsabout pet food and pet food products and petwelfare in general.As the central advisory role of the vet ineveryday decisions regarding the pet welfaredeclines, over the forecast period,manufacturers will need to communicatedirectly with pet owners. Whilst it is difficult to target pet healthcare products and dietarysupplements directly to pet owners,manufacturers can start this process bypromoting their pet food brands through themedia and by increasing their distribution reach to pet shops, supermarkets/hypermarkets,other food stores and other non-food stores.Manufacturers should ensure that retail outletsselling pet food also offer pet accessories andgrooming products or services.The increasing number of pet shops andadvertisements for pet food brands, combinedwith the greater concerns about pet health andwelfare, are driving the shift towards preparedpet food. The number of advertising campaignsdirectly targeting pet owners is rising and mostadvertisements strive to communicate thebenefits of prepared pet food and its nutritionalvalue over homemade alternatives. The supportof vets for these campaigns has led pet owners to purchase prepared food for their pets.Indian consumers traditionally favoured freshlycooked over prepared pet food. Most petowners continue to give their pets homemadefood, while offering prepared food as a snack.Thus, the diet of pets in India is a combinationof prepared and non-prepared pet food.However, the perception that freshly prepared,homemade pet food is healthier and morenutritious is changing, as manufacturers andvets advocate the benefits of prepared petfood. Manufacturers have aggressively targetedvets with their products and many are using theprofessionals to recommend prepared petfood to pet owners. Effem India Pvt Ltd wasone of the first manufacturers to target petowners directly through media advertisementsand direct communications. Othermanufacturers are increasingly using advertisements in pet magazines and leaving promotional literature in veterinary clinics.These marketing strategies have increased the consumers’ general awareness andacceptance of prepared pet food.The frequent bans on imports of pet food haveaffected its availability in India. There are veryfew domestic manufacturers of pet food in Indiaand their main focus tends to be on dog treatsand mixers such as biscuits. Apart from Venky’sIndia Ltd and Tetragon Chemie Pvt Ltd, there areno other domestic manufacturers with a pan-India distribution. Moreover, Effem India is theonly multinational that has domestic productionfacilities. Thus, economy brands tend to beavailable during the bans but premium and mid-priced pet food tends to suffer as these arelargely imported. Since the development of petfood is at an embryonic stage in India, theirregular availability of brands has hampered thecreation of brand loyalty among pet owners.
Pet Food and Pet Care Products:Forecast Value Sales % Growth by Region 2005/2010
From 2004, imported pet food was negativelyaffected by legislation in the form of bans onimports from certain countries. In 2006-2007, the import ban due to the rise of Avian Fluaffected US-based manufacturers severely.There was a breakdown in the supply chain formajor brands such as Eukanuba, Purina, and ProPac, as these are imported from the US. On theother hand, brands such as Bento Kronen andRoyal Canin, which are imported from Belgiumand France, respectively, escaped the ban and their availability was not affected. Thus, theirregular availability of major imported brandshas clearly affected the development of petfood in India.
THE FREQUENTBANS ONIMPORTS OF PETFOOD HAVEAFFECTED ITSAVAILABILITY ININDIA. THEREARE VERY FEWDOMESTICMANUFACTURERSOF PET FOOD ININDIA AND THEIRMAIN FOCUSTENDS TO BE ONDOG TREATS ANDMIXERS SUCH ASBISCUITS.
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The import ban on pet food continued in 2007and shows no sign of letting up. The availability of major brands such as Purina, Pro Pac, Sportmix,and Iams remained in doubt throughout the firsthalf of 2007, with imports stuck at Indian portsdue to the blanket ban on stocks from countriesaffected by Avian Flu. The cost pressures areexpected to mount on importers over the forecastperiod, as they suffer from the loss of sales andby having to pay for the stock that is held at theports. Whilst the major manufacturers andimporters formed an association in order tolobby the government on the import ban, theindustry is hopeful that a positive outcome willbe achieved in the short term.Import restrictions leading to the irregularavailability of pet food will hamper thedevelopment of pet food in India. The irregularavailability of pet food is also expected toprevent the major manufacturers from creating brand loyalty for their brands. In order togenerate brand loyalty and drive expansion, theregular availability of pet food and gooddistribution networks are key issues formanufacturers. In order to overcome the importrestrictions, manufacturers such as Purina PetCare India Pvt Ltd would do well to shift theproduction of their brands to India, as Mars Inchas done in the past by establishing Effem Indiain the country. In addition, manufacturers shouldcontinue to lobby the government, but given thelatter’s position this strategy is unlikely to createa long-term solution to the import restrictions.
Indian Market: Waiting to be Tapped
The Indian pet foods market is a young, growing market and there are a few major players thatare active in it. Imports currently constitute 40percent of the total pet foods market in India,with the US being one of the dominantsuppliers. The pet foods market has beengrowing at an average annual rate of 10-15percent for the last few years. Consumption of branded pet foods is currently concentrated inurban towns and major cities and much of thedemand for branded dog food is generatedalmost wholly from the urban population, whichis the key target segment for marketing andpromotional initiatives.India has a large number of pet dogs and cats.In fact, a recent survey concluded that there are3.6 million pet dogs in the six major cities alone.
Pet Food and Pet Care Products:Forecast Value Sales % Growth by Region 2005/2010
IMPORTRESTRICTIONSLEADING TO THEIRREGULARAVAILABILITY OFPET FOOD WILLHAMPER THEDEVELOPMENTOF PET FOOD ININDIA. THEIRREGULARAVAILABILITY OFPET FOOD ISALSO EXPECTEDTO PREVENT THEMAJORMANUFACTURERSFROM CREATINGBRAND LOYALTY FOR THEIRBRANDS.
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