Daily Research News Online no. 1917 - British Passion for Pets

British Passion for Pets

October 8 2002

A new report on petcare and petfood retailing from Mintel highlights the increasing incidence of humanising Britain's pets. The report points towards 'child substitution' and sees the trend of single person households and affluent empty nesters lavishing treasured pets with premium pet foods.

The market for pet foods, products and services in the UK has shown strong growth of nearly 25% between 1996 and 2001 to reach £3.37 billion, with sales forecast to reach £3.54 billion in 2002. This increase reflects the growing trend towards higher-priced added-value food products, growth in OTC vitamins and medicines, flea treatments, and in purchases of more specific pet accessories.

Spend on pet food amounted to around £1.68 billion in 2001, much of the growth is due to the continued trend towards the purchasing of both added-value and singe-serve premium pet foods. New packaging formats include a single food portion in a foil tray rather than a can, avoiding the need to keep half-full tins of cat food in the fridge. Lifestage foods have also recently been introduced, catering for puppies and kittens and for pregnant and geriatric dogs and cats.

Rising vets' fees and the increasing sophistication of veterinary treatments for small animals mean that pet owners are increasingly conscious of the importance of having pet insurance. British consumers have bought in to the concept of pet insurance, with 22% of pet owners of the belief that it is important to have pet insurance. Nevertheless, trade observers estimate that only 12% of dogs and cats are currently insured.

In terms of the total petfood and petcare retailing market, pet insurance has seen the fastest growth in the last five years. Sales of pet insurance increased by some 55% between 1996 and 2001 to reach £148 million. The market for vets' fees has continued to grow faster than inflation over the period 1996-2002. Vets' fees are not subject to any legislation and the increasing sophistication of treatment and the need for vets to invest in more expensive technical equipment has been a driver in the increase of fees. This process has been made easier by the increase in pet insurance policies. Consumers who have pet insurance are less concerned by the high prices charged by vets for consultations and treatment. Dog owners are most likely to pay for pet insurance, although the profile of those who have insured their pets is changing as cat ownership overtakes dog ownership. Future growth in pet insurance will come from increased targeting of cat owners and owners of smaller pets such as rabbits. 'TV programmes such as Animal Hospital and Vets in Practice have also helped by showing the range of treatments vets can provide and the often successful results of complicated treatments and operations' comments Mr Dominique Allport, Retail Analyst.

The most worrying factor for pet retailers and manufacturers is that the total number of cats and dogs in the UK has declined in the last ten years, down from 14.2 million in 1991 to 13.6 million in 2001. Dog ownership has steadily declined in the last ten years while cat ownership has increased, reflecting the influence of lifestyle pressures on pet owners, such as lack of time to look after dogs and exercise them properly. Cats are seen as more low-maintenance pets than dogs as they are more independent and can be left on their own while their owner is at work. Ownership of fish and birds has seen little real growth, but small animals such as rabbits, hamsters, guinea pigs and mice have become increasingly popular, again because they are perceived to be easy and cheap to care for. Many people are now keeping indoor rabbits as a more convenient alternative to a cat as they do not sharpen their claws on the furniture, are affectionate and good company and can be litter-trained.

Exclusive research questioning some 1,006 pet owners highlights Britain's passion towards their pets. Over a fifth of pet owners buy gifts for their pets including Christmas and Birthday presents, this rises to almost 40% of 20-24 year olds. Those pets living in Yorkshire and the North East are among the most spoilt with around a quarter receiving presents.

When it comes to diet, the British are particularly discerning in terms of dog food. Just 17% of British women believe that supermarket own-label pet food is as good as equivalent branded lines, which falls to 14% of men. Meanwhile a fifth of Britain's pet owners believe that supermarkets should offer more premium branded pet food, this rises to almost 30% of Londoners. In addition, 18% of respondents would like to be able to buy tailored petfood.

Those pet owners living in London demonstrate the greatest concern over their pets' health, with almost a fifth of these consumers saying they would pay slightly more for healthier varieties of pet food. Just 7% of pet owners admit to feeding their pet the same food as they eat, which rises to 14% of those aged 65 and over.

Children are an important factor in household ownership of pets, especially children aged between 10 and 14. However, the total child population is projected to fall by almost 5% over the next five years, which is likely to have a negative effect on the pet care and pet food retailing sector. The impact of the 11% growth in single person households forecast between 2002-06 is harder to judge. On the one hand, this is likely to favour increased pet ownership, as pets provide a degree of companionship for those living alone, but many single households lack the space or the time to care for a pet properly, especially if it is a dog. So far, the increase in single person households has been accompanied by an increase in cat ownership and a decline in dog ownership. Households with three or four members are more likely to own pets, but their numbers are forecast to show no increase over the next five years.

Taken together, these demographic factors are not particularly positive for the pet care and pet food retailing sector as they are likely to favour cat ownership rather than dog ownership. This will be significant, as dogs currently account for a wider range of pet food and pet care products than cats.

Nevertheless, as long as personal disposable income continues to grow and consumer confidence remains high, there is scope for the overall market to increase by continued new product development, especially in the areas of new, premium-priced pet foods and in the expansion of the pet gifting and pet treat markets. The pet insurance market is also likely to increase in value as vets' fees continue to rise, although there is a danger that the rising cost of medical treatment may also become a long-term limiting factor on the level of pet ownership.

'Pet manufacturers and pet retailers will have to work harder in future to maintain growth momentum in the pet care and pet food retailing sector, with lifestyle and demographic factors both pointing to a further decline in dog ownership. Cat ownership seems likely to continue to increase, as these independent animals are easier to look after for people living on their own or leading a busy life' comments Dominique Allport.