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EUROPE AT DIFFERENT SPEEDS

ZOOMARK INTERNATIONAL 2013

10 MAY 2013

PAULA FLORES

HEAD OF PET CARE RESEARCH

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INDUSTRY PERFORMANCE

WESTERN EUROPE

EASTERN EUROPE

BRAZIL

FUTURE PROSPECTS


4

Living In Uncertain Times


Source: Euromonitor International from national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF), World

Economic Outlook (WEO)

+5.2%

+3.8%

+3.6%

2010 2011 2012

-0.6%

2009

+ 3.5%

2013



5

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2012 2013 2014 2015 2016 2017

% g

ro

wth

Real GDP Growth: 2012-2017

Emerging

Eurozone

The Troubles in the Eurozone




6

Pet Care Posts Good Growth


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

82.0

84.0

86.0

88.0

90.0

92.0

94.0

96.0

98.0

2008 2009 2010 2011 2012 2013

%

gr

ow

th

US

$ b

illi

on

Global Pet Care Retail Values: 2008-2013

Retail value sales Annual retail value growth (%)



7

And Pet Care at Different Speeds in 2013




8

US

Brazil

United Kingdom

Japan

France

Germany

Italy

Russia

Canada

Australia

0 5 10 15 20 25 30 35

US$ billion

Pet Care Top 10 Largest Markets by Retail Value

Top 10 Largest Markets in 2013




9

Global Pet Care Drivers


Humanisation Premiumisation



10





11



Saudi Arabia: Pet Facial Scrub Israel: Pet Head



12



UAE Iams Pro Active Health Launched 2012

Purina One Beyond South Africa Q1 2013



13



Dog Bakery in Canada Israel: Nature’s Variety Instinct



WESTERN EUROPE

EASTERN EUROPE

FUTURE PROSPECTS


15

Pet Care Sales by Region

Latin America

North America

Western Europe

Asia Pacific

Eastern Europe

North America and Western Europe are the Leaders

WESTERN EUROPE



16

Mature Western European Markets

WESTERN EUROPE

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

0

500

1,000

1,500

2,000

2,500

3,000

% C

AG

R

US

$ m

illi

on

Pet Care Retail Value Sales in Western European Markets: 2013

US$ million 2008-2013 CAGR



17

Strong Polarisation Across Europe

WESTERN EUROPE

-6

-4

-2

0

2

4

6

8

% g

ro

wth

Pet Care Value Growth in Western Europe: 2013



18

0 2 4 6 8

Turkey

Norway

Finland

France

% growth

Top Four Dog and Cat Food Markets 2013

Premium

Mid-Price

Economy

Best Performing Dog and Cat Food Markets

WESTERN EUROPE



19

With Humanisation Still Growing Strong

WESTERN EUROPE

Gimdog H von Gimborn GmbH Germany

Feline Young Adult Sterilised Hill's Pet Nutrition SNC France



20

-20 -15 -10 -5 0 5

Ireland

Spain

Italy

Greece

% growth

Top Four Less Performing Markets 2013

Premium

Mid-Price

Economy

Worst Performing Dog and Cat Food Markets

WESTERN EUROPE



21

With Private Label Becoming More Refined

WESTERN EUROPE

Select Gold Senior Fressnapf Germany

El Corte Inglés Spain



22

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012

%s

ha

re

Private Label Share in Spain: 2008-2012

Cat Food Dog Food

0

5

10

15

20

25

30

35

20082009 2010 2011 2012

% s

ha

re

Private Label Share in Germany: 2008-2012

Cat Food Dog Food

And Gaining Share

WESTERN EUROPE



WESTERN EUROPE

EASTERN EUROPE

FUTURE PROSPECTS


24

Eastern Europe: Vibrant Markets

REGIONAL OVERVIEW

0

1

2

3

4

5

6

7

0

500

1,000

1,500

2,000

2,500

3,000

% C

AG

R

US

$ m

illi

on

Pet Care Retail Value Sales in Eastern European Markets: 2008-2013

US$ million 2008-2013



25

0

2

4

6

8

10

12

Ukraine Russia Romania Bulgaria Poland Slovakia CzechRepublic

Pet Care Value Growth in Eastern Europe : 2013

Bright Prospects in 2013

EASTERN EUROPE



26

0

500

1,000

1,500

2,000

2,500

2007 2008 2009 2010 2011 2012

US

$ m

illi

on

Russian Pet Care Retail Value Sales: 2008-2013

Cat Food Dog Food Pet Products

Buoyant Russian Market with Plenty of Potential

REGIONAL OVERVIEW



27

0

200

400

600

800

1,000

1,200

1,400

2007 2008 2009 2010 2011 2012

US

$ M

illi

on

Russian Dog and Cat Food Sales by Price Platform: 2008-2013

Economy Mid-Price Premium

Russian market accounts for nearly 60% of Eastern European sales

Many consumers trading up from economy

International brands hold good brand equity

Russian Consumers Opt for Mid-Priced Pet Food

REGIONAL OVERVIEW



WESTERN EUROPE

EASTERN EUROPE

BRAZIL

FUTURE PROSPECTS


29

0

1

2

3

4

5

6

7

8

Brazil Mexico Argentina Venezuela Chile Colombia

US

$ b

illi

on

Latin American Pet Care Retail Values by Major Market: 2008 vs 2013

2008 2013

Latin American Pet Care: A Rising Global Star

REGIONAL OVERVIEW



30

0

10

20

30

40

50

60

70

80

90

100

Cat Dog

%

ho

us

eh

old

s

Proportion of Brazilian Households Owning a

Dog/Cat 2013

2008 2013

0

10

20

30

40

50

60

70

80

90

100

Cat Dog

% n

utr

itio

n

Brazilian Pet Nutrition 2013

Prepared Unprepared

Growing Pet Ownership Rates Means Plenty of Untapped Potential

REGIONAL OVERVIEW



31

0

10

20

30

40

50

60

70

80

90

100

2007 2012

Pe

rc

en

tag

e

Brazilian Distribution Channels: 2008-2013

Pet Shop

Other

Hypermarket

Supermarket

Concentration in modern grocery creates opportunities for “mass” premium brands

Premium Pet Care brands also favoured by strength of:

Pet shop

Pet superstores

Latent Potential Further Strengthened by Distribution Channels

REGIONAL OVERVIEW



32

Leading Pet Care Companies in Brazil

REGIONAL OVERVIEW

Mars 26%

Nestlé 17%

Total Alimentos 8%

Nutriara 8%

Mogiana 6%



GLOBAL TRENDS

REGIONAL OVERVIEW

FUTURE PROSPECTS


34

Globally Priorities Will Shift Up to 2016

FUTURE PROSPECTS

• 66% of global GDP growth generated in emerging markets

• 88% of the global population lives in emerging markets

• Annual disposable income grows rapidly in emerging markets



35

0

10

20

30

40

50

60

70

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

% o

f w

orl

d G

DP

Emerging and Developing Countries Developed Countries

Power Shift to Emerging Markets Will Continue

FUTURE PROSPECTS

Global GDP Contribution in PPP Terms: 2000-2020



36

What Does the Future Hold for Global Pet Care?

FUTURE PROSPECTS

0

20

40

60

80

100

120

2012 2013 2014 2015 2016 2017

US

$ b

illi

on

Global Pet Care Retail Value Prospects: 2012-2017

Cat Food Dog Food Other Pet Food Pet Products



37

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

US

$ b

illi

on

Pet Care Absolute Retail Value Gains by Region: 2013-2018

Emerging Markets Remain Key to the Future of Pet Care

FUTURE PROSPECTS



38

0.0 0.5 1.0 1.5 2.0

Poland

South Korea

Argentina

Venezuela

Thailand

Taiwan

China

Russia

Mexico

Brazil

US$ billion

10 Strongest Growing Emerging Pet Care Markets by Retail Value: 2013-2018

Emerging Markets Remain Key to the Future of Pet Care

FUTURE PROSPECTS



39

In developed markets austerity continues to bite

Premiumisation set to intensify in most markets

But private label will become an increasing threat

Emerging markets will remain key to the future of pet care

Final Conclusions

FUTURE PROSPECTS


THANK YOU FOR LISTENING

Paula Flores

Global Head of Pet Care Research

[email protected]

mailto:[email protected]

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