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Key Areas

Executive Summary

Table of Contents

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KEY AREAS

THE MARKET

• Review of the overall UK Pet Market and trends since 1994 - food, accessories, vet/insurance fees, kenneling etc. Current performance by sector and future prospects forecasted to 2004.
• Assessment of the Pet Accessory Market - developments since 1993. Market performance in 1999 and future prospects up to 2003.
• Factors influencing growth - pet population since 1993, changing mix of pet ownership, cultural and social influences, new product developments, changing retailing trends influencing product awareness etc.

THE PRODUCTS

• Pet Accessories by product groups, trends, forecasts and factors influencing market developments, key growth sectors.
• Storage and Feeding Products - market size and share in 1999 - Analysis of baskets, bedding, hutches and cages, tanks and aquariums etc. - a review of size, product trends and influencing factors.
• Care Products - market size and share in 1999. Analysis of grooming equipment, maintenance products, hygiene products, health and vitamins etc. - a review of size, product trends and influencing factors.
• Toys – market size and share in 1999. Analysis of dog, cat, reptile, fish, bird and small animal toys, a review of size, product trends and influencing factors. An assessment of training, activity, interest and utility toys.
• Collars, leads and utility products - market size and share in 1999, a review of product trends and influencing factors.
• Review of the miscellaneous items e.g. cat flaps, letter box cages etc.

SUPPLY AND DISTRIBUTION

• Analysis of major suppliers - market shares, product strengths, market positioning, distribution, strengths etc.
• Review of fragmented supply structure - potential for rationalisation/acquisition.
• Analysis of major distribution channels - shares by major channels, growth of pet superstores.
• Changes in supply and distribution structures in recent years and forecasts of future trends - new channels emerging.

FUTURE PROSPECTS/GENERAL

• Age distribution of population, pet ownership levels, disposable income levels, number of households etc.
• Future developments within pet products - implications for suppliers.
• Changing consumer requirements - increasing product awareness, value-added products, etc.
• General Economic influences on the market.
• Retailing trends for pet products.

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EXECUTIVE SUMMARY

In 1999, the UK market for Pet Products was worth an estimated £3.4 billion at retail prices, within our definition of the market, which represents a 6 percent increase over the previous year. The market can be divided into 4 key sectors - pet food, accessories, vet/insurance fees, kennelling.

The pet industry has generally experienced underlying growth in recent years, although the early 1990s were marginal growth years.

Key factors influencing overall performance of the market are consumer confidence, PDI levels, household pet ownership levels, mix of pets owned, new product developments and changes in retailing.

There is substantially more information freely available for pet owners concerning the health and care of their pet. This approach has been adopted through magazines, television programmes, trade associations, manufacturers and retailers.

This development has coincided with the growth of high-profile pet superstores based in ‘out-of-town’ sites, which sell animals and a wide range of accessories and provide a welcoming environment, particularly for the younger members of the family. This awareness of pet products stimulates desire amongst potential consumers, and increases the probability of repeat visits.

These out of town stores offer an extensive range of products for a wider selection of animals than most independent Pet shops. They are also stimulating the ‘gift market’ by offering starter pack products and impulse purchasing. As a result, the pet retailing industry has experienced a change towards being more competitive in product range, price and selection and consequently the independent pet stores are under threat in terms of their market share.

The overall Pet Market can be divided into the following sectors - Pet Food, Pet Accessories, Veterinarian/Insurance Fees and Kennelling expenses.

Although the Pet Food market is estimated to be worth around £1.65bn, with a market share of approximately 48 percent, it is considered to be a mature market. Within the overall food sector, there has been a decline in the sale of dog food, however, this has been offset by growth in the cat food and treats sector, reflecting the changing mix in pet ownership.

The second largest sector within the Pet Market can be attributed to veterinarian and insurance services worth approximately 27 percent of the market. Pet insurance is envisaged to expand within the long term future, reflecting growing concern for pet welfare and the range of treatments available.

1999 has witnessed a continuing growth for the Pet Accessories market which accounts for approximately 13 percent of the overall market. The market size for Pet Accessories is estimated to be worth around £420m at retail prices in 1999, an increase of approximately 6 percent from the previous year.

The sector has maintained an underlying growth which can be attributed to a combination of factors including the number and mix of pets purchased. In addition, many leading manufacturers have extended their product portfolios, in order to meet consumer demands, as well as stimulate consumers to trade-up to higher quality accessories.

Consequently, there has been a wide range of new products developed particularly within the care and toy products sectors, which account for approximately 28 percent and 34 percent respectively of the UK market.

Within the care product sector, maintenance products such as litter, aquatic chemicals and hygiene products have a relatively larger share of approximately 42 percent. Grooming equipment and health care vitamins and tonics each account for the remaining 30 percent and 28 percent of the market sector, which are estimated to be worth around £37m and £34m respectively. It is a highly fragmented sector, with an increasing product range, particularly in the healthcare sector.

The ‘toy’ market is estimated to be the largest sector and worth around £150m in 1999. A large proportion of the market is geared towards dogs, cats and caged birds, and more recently there seems to be a trend towards training and utility toys rather than leisure/fun-based products. The product range is extensive and includes scratching posts, tunnels/wheels, tank equipment, rubber toys etc.

Storage and feeding products maintain a share of approximately 25 percent in 1999, with an emphasis on Baskets and Bedding which accounts for £35m of this sector. Hutches and cages have a market share of around 15 percent and 24 percent respectively. Brand identity tends to be lower in these sectors, with a high level of non-brand ranges supplied by hutch/cage specialists.

Collars, leads, harnesses and utility products is a sector generally attributed towards the dog market. In 1999 this sector was estimated to be worth £48m, approximately 13 percent of the market. This sector has been greatly influenced by changing legislative demands and consumer expectations in recent years, however, a number of manufacturers have produced a wider range of products to meet customer demands, and stimulate ‘trading up’.

Consumer expectations are relatively high, and with a highly fragmented market, there is no shortage of alternative products from which to choose. Competition is therefore, extremely intense for manufacturers, with several companies diversifying into other markets and product sectors.

In terms of the supply structure, the market is highly fragmented with many companies specialists within certain sectors of the market. The leading suppliers in the market are Armitage, Pedigree Petfood, Bob Martin, Hartz etc, but they only account for around 15 percent of the market collectively.

The key change in terms of distribution has been the rapid growth of pet superstores. While independent pet stores account for around 37 percent of the pet accessory market, superstores account for over 27 percent and growing. Grocery Multiples offer a more limited range but still account for an estimated 12 percent share, while DIY Multiples are a small distribution channel except for Focus Do It All, with a strong presence in pet products.

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TABLE OF CONTENTS

LIST OF TABLES AND CHARTS

Text © 2000 AMA Research

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Last updated by Jacob van Eldik 26th February 2000