The Rs 4,000-crore market grew at a CAGR of 30-35% over the past two years.
Love is no longer confined to red roses, chocolates or candle-lit dinner dates. Many Indians now have a different definition of love - which comes with four paws, a tail and a wet nose. They are now opening up their homes to pets.
While pets can eat some of the foods that humans can - their dietary requirements tend to be different from ours. This paved the way for the pet food industry in India.
The segment has seen steady growth over the last few years. According to a Mordor Intelligence report, pet food constitutes half of India’s total pet care industry, valued at a whopping Rs 8,000 crore annually.
The report also mentioned that dogs are the most popular companions - constituting 85 per cent of the pets in the country. North India accounts for the most number of pets, and South Indians like keeping cats and fish as pets.
The increase in pet food demand can also be attributed to that of pet ownership itself - which saw an uptick after the COVID-induced national lockdown in 2020. Individuals who opt to keep pets, also have more per capita disposable income.
Salil Murthy, managing director, Mars Petcare India, corroborates these points with numbers. Mars Petcare India has a majority market share in the pet food industry, with brands like Pedigree, Royal Canin and Whiskas under its belt. Murthy reveals that the Indian pet food industry is one of the fastest-growing in the FMCG sector.
Over an email, Murthy tells afaqs! that the CAGR of the pet food category, valued at Rs 4,000 crore in 2021, stood at 30-35 per cent over the past two years. The market grew 16 per cent in 2019 and over 20 per cent in the pandemic year of 2020. In 2021, it grew at around 30 per cent.
“This was because people were spending more time with their pets during the lockdown. They were adopting more of them and feeding stray dogs and cats, knowing that they were hungry or donating food to NGOs, and many such factors.”
According to data provided by Mars Petcare, in 2020, 85 per cent of the pet food market comprised dog food, and the balance was cat food. People clearly understood the need for better nutrition for their pets and started switching to manufactured food. This led to accelerated growth of the pet food market.
“With growth, there has also been an escalation in e-commerce sales, with the advent of new websites like Petsym, Heads Up for Tails and Shakehands. Over the past two years, we have not only introduced new products across the Pedigree and Whiskas ranges, but also launched the economy brand Chappi in India,” mentions Murthy.
When Mars Petcare entered the Indian market in 2004, Murthy reveals, there was little to no information, in terms of manufactured pet food.
“Even today, most pet parents prefer home-cooked meals over manufactured pet food, despite the fact that the latter provides complete nutrition. In recent years, brands have focused on category creation by educating pet parents about the benefits of pet food vis-a-vis home-cooked food.”
Nutritional requirements of pets vary from breed to breed, and also depend on the age of the dogs, whether it is a puppy, adult dog or a senior dog. Mars Petcare has a sub-brand of dog food, called IAMS dog food, which provides tailored nutrition based on the species and age.
“Pedigree also has different products based on the ages of dogs. People are also increasingly adopting cats, and Whiskas has become a leading brand in the category and a household name,” says Murthy.
Rana Atheya CEO and founder, DogSpot Meals and DogSpot.in - an e-commerce site for pet products, quips that the pet food industry is the only one where the customer is different.
He adds that most of the time, the consumer can’t give feedback on the food he or she has just eaten. It takes someone who knows dogs really well, to design food that is nutritious and healthy for them.
Atheya founded DogSpot Meals to address the ever-growing needs of the dog parent community for fresh and healthy food. DogSpot Meals is a ready-to-eat complete meal. Atheya tells us that the pouch format that is sold, makes it more convenient for pet owners - who don’t have to carry heavy packages of kibble or dry food. They also don’t have to worry about storing them.
“It’s not just in India, this demand for healthy food for pets, is a global phenomenon. Since the pandemic struck, we have seen that there’s at least 300 per cent increase in our sales,” says Atheya.
He also links the increase in demand for food and toys to the increase in the number of pets adopted during the pandemic. He adds that previously, pet food as well as treats used to be manufactured in another country and imported to India. We were heavily reliant on China, Thailand and Indonesia as source countries for imports, but that has changed now. Both Pedigree and Drools are manufactured in India, though imported pet treats are still very popular with the audience that frequents his website.
Drools CEO Shashank Sinha calls the brand a ‘made in India’ and ‘make in India’ one, and claims that manufacturing gives the company an added advantage - of the food being fresher, on an average. This also makes a difference to how the product is priced. Imported pet food attracts 22 per cent service tax - that cost is ultimately borne by the customer.
A three-kg pack of Drools puppy food costs Rs 899 and Mars Petcare’s product Pedigree is priced at Rs 600. These are the brands that hold maximum market share in India. Drools also works with celebrity endorsers like Hrithik Roshan, Kareena Kapoor Khan, Jacqueline Fernandes and Ananya Panday. It also sells gourmet food, which is promoted by chefs Sanjeev Kapoor and Vikas Khanna.
Sinha says that with the size of the category in India, pet food brands aren’t competing with each other. They’re competing with home-cooked food that pet parents whip up fresh for their four-legged friends.
“Palatability is an important factor for pet food because if the pet doesn’t like the taste, then it is loss of money for the owner, even if he has increased disposable income,” he explains.
Vineet Khanna, co-founder of Supertails, says that Gen Z and millennials have a completely different attitude towards pets. They see themselves as parents, not as pet owners, and are more willing to splurge to pamper their pets with food, treats and toys.
According to him, the biggest challenge that people face, while navigating the pet food market, is information. The sources of information include the Internet, veterinary doctors, pet shop owners, and other peer pet parents. But it can be confusing for first-time pet parents - who make up roughly 60 per cent of all pet owners in India.
“Europe has nearly 90 per cent penetration when it comes to packaged pet food, but that’s not the case in India, where pet food penetration is less than 10 per cent. The average lifespan of dogs and pets there is higher too,” adds Khanna.
The average size of consumption of home-cooked food comes up to around $4-5 billion, whereas the pet food market is valued at around $700-800 million, he concludes.
Anushka Iyer, Founder and CEO at wiggles.in also agrees that Gen Z and millennials are more likely to turn pet parents and become invested in their well-being. “As customers turn to Google, online communities & veterinarians for understanding their pets better, there is a need for education at scale,” she emphasises.
Most of the time when pet parents cook food for their pets - it turns out to be a version of a human meal. Iyer says when it comes to packaged food, there is a wide variety available in the market - from wet food to dry kibble, super premium to economic and complete meals to treats.
“We foresee more specialised and personalised diets driving the growth in the market, since every pet, like every human being, is unique with his/her own specific nutrition needs. Our products that are formulated in-house by our veterinary and R&D team to cater to different nutritional needs,” she signs off.