HONG KONG PET FOOD INDUSTRY REPORT

Global Trade overview

Globally, the major dog and cat food importers are located in Western Europe and North
America, with the exception of Japan. Germany has been for a long time the world's
biggest importer of dog and cat food, and has recently positioned itself ahead of France
as the world's largest dog and cat food exporter. In 2017, Canada was the eighth-
largest exporter of dog and cat food.

In 2017, Canada exported US$525.3 million worth of dog and cat food. The United
States is still the number one destination, with a share of almost half of total Canadian
dog and cat food exports in 2017, but its share is declining. Russia follows, receiving
7.7% of Canadian dog and cat food exports in 2017. All other countries receive less
than 5% of Canadian dog and cat food exports, but some destinations are growing at
strong rates, including South Korea (with a compound annual growth rate of 46.1% over
2013-2017), France (36.9%), Hong Kong (35.2%), Spain (21.2%) and New Zealand
(2.8%).

Hong Kong is the world’s eleventh-largest market for imported pet food, and also the
hub for pet food trade in the region. The United States is the market leader with nearly
50% market share in the Hong Kong pet food market, which is expected to grow in
2020. For the first six months of 2020, Hong Kong imports of dog and cat food reached
nearly $80 million, an increase of almost 23% over the same period in 2019. The sales
of pet food are also expected to grow and reach $264 million by 2025.

In Hong Kong, pet food is mainly referred to dog and cat food, which accounted for 99%
of all pet food sales. In 2019, Hong Kong’s imports of dog and cat food reached $139
million, making it the world’s eleventh-largest market. The United States is the market
leader, with nearly 50% market share ($69 million) of dog and cat food imports into
Hong Kong.

Cats are gaining popularity, particularly in more densely populated areas. Typically seen
as less demanding than dogs, they are considered good companions. Gourmet
products for cats are key to driving growth as cat owners are also increasingly feeding
their cats with premium food (figures for premium cat food recently outperformed mid-
priced cat food). Treats and mixers also registered interesting growth, but mixers still
remain a niche category.

1 What are the top 5 dried cat food brand in Hong Kong, and which 3 products among these brands is
selling the most/most popular? What's special about the top brands / products (quality, marketing,
package, size etc...)?
Top Brands and Market Share

Name of Brand Manufacturer Market Share

%
Whiskas Mars Hong Kong Ltd 25.8%
Mon Petit Nestle Hong Kong Ltd 13.7%
Purina Friskies Nestle Hong Kong Ltd 12.4%
Purina Fancy Feast/Gourmet Nestle Hong Kong Ltd 7.6%
Purina Felix Nestle Hong Kong Ltd 4.0%
Royal Canin Mars Hong Kong Ltd 3.5%
Other Brands (20++ other brands) 33.0%

Company shares

Mars and Nestlé clearly dominate the global dog and cat food landscape, competing
with each other, far ahead from other competitors. The internationally known brand
Pedigree by Mars Inc. leads the dog food sector, followed by Blue Buffalo (Blue Buffalo
Pet Products Inc) and Purina Dog Chow (Nestlé SA). Mars also leads the cat food
sector with its emblematic Whiskas.

Whiskas (Top 3 Products)

Salmon & Shrimp Flavor
Product Info
WHISKAS® MEATY SELECTIONS™ has the perfect mix of chicken and turkey flavors
that your cat won't be able to resist. Plus, our recipe is protein-rich for lean muscles,
contains antioxidants for a healthy immune system, and helps support healthy joints.

Indoor – Chicken Flavor

Product Info
WHISKAS® INDOOR helps your adult cat stay healthy and active with a savory chicken
flavor she will love. Natural fibers gently move hairballs through your cat’s digestive
system. Our recipe includes natural fibers to help control hairball development and
reduced fat to help maintain a healthy weight**. High quality protein, fat and
carbohydrates provide 100% complete and balanced nutrition to keep your indoor adult
cat healthy and happy.

Kitten – Chicken & Turkey Flavor

Product Info
WHISKAS® KITTEN Chicken & Turkey Flavor recipe provides 100% complete and
balanced nutrition for growth, gestation and lactation. It’s protein-rich for lean muscles,
has added calcium for strong bones, and DHA for healthy brain development. The best
part? Kittens love it!
Mon Petit
Gourmet Mon Petit
Gourmet Mon Petit is tasty, complete wet food for adult cats in a handy mixed-pack.
Lots of different fish and meat varieties, all in a delicious sauce. Your cat won't get
bored and food stays fresh.

Purina Friskies (Top 3 Products)

Friskies Indoor Delights® Dry Cat Food
Product Info
Formulated to promote healthy weight and help control hairballs, with flavors of chicken,
salmon, cheese & garden greens.
Friskies Seafood Sensations Dry Cat Food
Product Info
Seafood-lovin’ cats love this mix of flavors of salmon, tuna, shrimp & seaweed.
Friskies Ocean Favorites Dry Cat Food
Product Info
With real, natural salmon and accents of brown rice and peas, you can turn every meal
into the catch of the day!

Purina Fancy Feast/Gourmet (Top 3 Products)

Paté
Product Info
Finely ground and delightfully smooth patés.
Natural
Product Info
Delicious, natural recipes with added vitamins, minerals and nutrients.
Variety Packs
Savory collections of your Fancy Feast favorites.

Purina Felix
Product Info
Everybody knows Felix brand cat food, the irresistibly tasty cat food for loveable,
mischievous little rascals. Available in a mouth-watering range of delectable flavours,
textures and formats. Something for everyone from kittens to senior cats including
tempting treats and milk. It’s hardly surprising that cats love the Felix brand.
Royal Canin
Bengal Adult
Product Info
ROYAL CANIN® Bengal Adult is exclusively formulated with the nutritional needs of
your Bengal cat in mind. By containing a high level of protein and an adapted fat
content, this food contributes to maintaining your Bengal's muscle mass in order to
sustain their highly active lifestyle. A highly digestible, high protein diet is best advised
to support healthy digestive function in your Bengal. That's why ROYAL CANIN®
Bengal Adult food contains L.I.P proteins (Low Indigestible Proteins) specially selected
for their high digestibility. It also includes prebiotics that help to support a balance in the
intestinal flora. Your Bengal's striking coat needs special attention and care in order to
keep it in top condition. ROYAL CANIN® Bengal Adult food contains specific amino
acids, vitamins, as well as omega-3 and omega-6 fatty acids to help maintain its glossy
coat and healthy skin.

Indoor Appetite Control

Product Info
ROYAL CANIN® Indoor Appetite Control is specially formulated with all the nutritional
needs of your indoor cat in mind. If your indoor cat has a tendency to overeat, then it's
important that its diet contains nutrients that help to control its food intake. ROYAL
CANIN® Indoor Appetite Control helps indoor cats to regulate their appetite in a natural
way, thanks to a balanced content of protein and fibres. The inclusion of highly
digestible protein in ROYAL CANIN® Indoor Appetite Control helps to reduce not only
the quantity of your cat's stools, but also the odour. Thanks to the inclusion of specific
fibres, including psyllium, ROYAL CANIN® Indoor Appetite Control also helps to
naturally stimulate intestinal transit, meaning that the occurrence of hairballs is
significantly reduced. ROYAL CANIN® Indoor Appetite Control also helps to support
and maintain the health of your adult indoor cat's urinary system.

Hairball care
Product Info
What are the key benefits of this targeted nutritional solution? Hairball Care is a
precisely balanced nutritional formula which naturally helps reduce hairball formation.
The exclusive Hairball Care complex is composed of a specific blend of dietary fibres,
including psyllium (rich in mucilage), and insoluble fibres to help naturally stimulate
intestinal transit. As a consequence, hair swallowed daily can be eliminated in the
faeces rather than building up in the stomach and being regurgitated.
Key Success Factors of Top Brands

Quality/Corporate Social Responsibility/Brand Awareness

Pets' welfare is a major concern for both the industry and pet owners. Most
manufacturers seem to have in place a scheme for donating and partnering with pet
rescue and adoption centers as well as promoting stray pet adoption. This is also
relevant for raising brand profile, particularly in less developed markets. For example, in
2017 in China, Pedigree organized a nationwide event for a public charity, "Help and
Treat Homeless Animals". The brand also sponsored the first charity ambulance
exclusively for homeless animals in China (Euromonitor International, 2018).

Nestle's Purina Petcare is said to have more than 500 scientists on staff, including food
scientists, nutritionists and veterinarians, while Mars conducts a series of studies via its
Waltham Centre to understand the ways in which interaction with animals can benefit
the lives of individuals and communities.

As consumers are seeking out natural and human-grade foods, they also expect the
same transparency in the manufacturing process of dog and cat food as in their own
diets. The most educated pet owners want to be able to discuss their ingredient
sourcing with manufacturers.

Functional pet claim

Consumers increasingly want highly functional and natural products for their pets. Once
considered as a premium, natural products are rapidly becoming part of the
mainstream.

Example of "Functional pet" claims associated with pet food products:

 Digestion and urinary tract

 Teeth and tartar prevention
 Immune system
 Joints, bones and muscles
 Heart and cardiovascular system
 Brain and nervous system
 No additives/preservatives
 GMO free
 Vitamin/mineral fortified

Nutritional component (listed on pack) of pet food products

The trend towards protein-rich products and other nutrient fortified products are clear in
recent pet food products such as:
  Protein rich
 Cereals contained
 Vegetables contained

Appetizing Products

Even though products marketed in the pet food sector primarily target the owners
through claims, functional ingredients and appealing packages, these top brands have
found a way to ensure that their products will be appetizing to the pets that will consume
it. They conducted research which in able them to develop and innovate in that sector.
According to a professor of animal science at Colorado State University, dogs and cats
use sensations, such as appetizing smells, to build their mental understanding of the
world and form memories, and that holds true for pet food. Dogs and cats love variety
and the smells and textures of a new food can help fulfil the animals' mental need for
novel experiences.

2 Who are the buyers? What are their profiles (jobs. age, gender etc). It will be great if you can provide
a few segments/categories

DOG AND CAT OWNERSHIP / SALES OF DOG AND CAT FOOD

Dog/Dog Cat/Cat
Food Food
Dog/cat ownership/population
Total no. of households in Hong Kong: 2,573,404 (est.)
No. of households keeping dogs/cats: 241,900 (9.4%) 　 221,100 184,100
No. of dogs/cats kept
For households keeping dogs/cats
No. of households keeping dogs (some also keep cats) 147,500
No. of households keeping cats (some also keep dogs) 103,500
Living in private housing 85% 63.8%
Living in public or temporary housing 15% 36.2%
Average household size keeping dogs/cats 2.9 2.9
Monthly medium household income (USD$) $4,653 　 $4,743
No. of dogs/cats kept per household 　
 One 　 67.6% 59.2%
 Two 　 21.8% 26.5%
 Three or more 10.6% 　 14.3%
Channel of obtaining 　
34.8% 19.9%
 Bought from pet shops 　
32.1% 33.4%
 Gifts from relatives/friends 　 17.8% 19.8%
 Adoption
Sales of dog and cat food (2020)
Sales by category
 Dog/cat treats and mixers 　 $3.6 million $11 million
 Dry dog/cat food 　 $151 million $7.3 million
 Wet dog/cat food $10.9 million $22 million
TOTAL　 $166 million $40.3 million
Total Distribution channels (according to sales value)
 Supermarket 　 32.5% 31.2%
54.3% 58%
 Pet shops 　
5.5% 7.8%
 E-Commerce
7.7% 3%
 Veterinary Clinics

3 What are the key buying factors for consumers in Hong Kong for cat food? I need some more specific
factors. for example, if you say "Quality", I need more elaboration. Do you mean the food contains
certain nutrition or it is certified by a renowned agency, such as FDA. etc

General trends

Pet "parents" are looking for better quality products and now believe that the food they
give to their pets should be as good as the food that they consume themselves.
Tightening regulations of The Agriculture, Fisheries and Conservation Department
(AFCD) of the Hong Kong government for Pet foods is also impacting buying behaviour,
highlighting the importance of food safety for humans and animals alike.

Premiumisation

The humanization of pets drives a trend towards super-premium products, focusing on

quality ingredients, including a greater interest in nutrients and protein, as well as claims
related to social and ethical concerns, such as animal welfare and environmental
sustainability (Euromonitor International, 2018). Innovations go from human-grade
quality food to exotic flavours. In March 2016, for example, Blue Buffalo launched
Bayou Blend dog treats featuring alligator and catfish protein.

Health and wellness

Recent trends which characterize the human food market have also trickled down to pet
food in several markets, including the adoption of a wider notion of pets health and
wellness, as shown by the diverse dieting regimes and the vast array of popular
functional pet claims associated to foods that are allegedly good for digestion, for the
skin, for the teeth, etc. (Euromonitor International, 2018).

The seniorisation trend tackles the fact that pets are living longer and have specific
needs in terms of more functional foods.

Mission-based marketing
Pet owners are interested in supporting pet food manufacturers that have demonstrated
a commitment to social causes and organizations. The so-called mission-based
marketing is one of the strongest trends in dog and cat food according to a pet food
industry analyst. Consumers want to know what a pet food company stands for
ideologically (Petfoodindustry.com, 2018).

4 What are the major channels by preference? online, super market, vet? If it is online, I would like to
know what are the sites, including platforms and DTC websites.

Market Share

Total Distribution channels (according to sales value) Dog Food Cat Food
Supermarket 　 32.5% 31.2%
Pet shops 　 54.3% 58%
E-Commerce 5.5% 7.8%
Veterinary Clinics 7.7% 3%

To check out the other brands, you can visit the websites (pet or pet food section) of the
two largest supermarket chains in Hong Kong. Each of the chains operate over 260
outlets across Hong Kong and the two chains combined account for over 60% market
share of all supermarket sales. The website of the largest e-shopping mall in Hong
Kong – HKTV Mall, will also show the dog and cat food on offer via e-commerce. Their
websites show the more common dog and cat food widely available in Hong Kong and
their retail prices (retail prices in HK$ and US$1=HK$7.8):

Wellcome Supermarket
Website: https://www.wellcome.com.hk/wd2shop/en/mobile/html/shop/pets.html#/
hs_dept_id=504&hs_aisle_id=520

ParknShop
Website: https://www.parknshop.com/en/pet-food-care/lc/210000

HKTV Mall
Website: https://www.hktvmall.com/hktv/en/main/search?
q=:relevance:street:main:category:AA11960000000
TOP PET SHOP IN HONG KONG

Pet Pet Organic

An online shop dedicated to quality and eco-friendly products, Pet Pet Organic is a one-
stop-shop for your furry friend. They carry food, toys, snacks, and care items for dogs
and cats.

Website: https://www.petpetorganic.com/

Holistic Pet Help

Holistic Pet Help is a pet health shop focused on high quality products for cats, dogs
and horses that have been imported from the USA and Canada. This shop in the New
Territories can also be found at markets around Hong Kong.

Room 127, 4th Floor, Venus Industrial Building, 45-51 Tai Lin Pai Road, Kwai Chung,
New Territories, Hong Kong. +852 9095 6513. Also available at markets around Hong
Kong.

Wise Pet
Wise Pet focuses on holistic pet health and high quality pet products. Their easy to use
web site (side note they have the most adorable images of all the sites on this list)
allows you to quickly select everything from a fountain for your cat to a raincoat for your
pup.

Online or visit their showroom. 21N, Block 2, Goldfield Industrial Building, 144-150 Tai
Lin Pai Road, Kwai Chung, New Territories, Hong Kong. +852 2652 2337.
https://www.wisepet.com/

Pet Project.HK
From the same group as Life Project.hk, Pet Project.HK is an online pet mega store
stocking food, treats, grooming suppliers, furniture, clothing, and other accessories. In
addition this site does come in English which can make shopping a bit easier for expats.

Vetopia
Vetopia is your online one-stop-shop for everything you need for your best friend. They
have food, grooming supplies, cleaning supplies, tick and pest control, toys and
accessories for dogs and cats as well as fish, reptiles, birds and other small pets. They
have multiple brands that offer organic and natural products treats and food.
https://www.vetopia.com.hk/