Pet Care in Belgium

Pet Care in Belgium

Report Summary Value growth in pet products despite economic turbulence Economic turbulence, which was present over the review period, had almost no effect on the sales of pet food and pet care products in Belgium. Belgian pet owners choose quality pet food and pet care over low prices. Premium dry dog food and premium dry cat food drove overall growth. In comparison, volume growth was negligible due to the maturity of pet care.

Natural and organic products fill the pet care environment In Belgium pet care market, growth in natural and organic pet food was evident toward the end of the review period, with more products offering complete nutritional quality food with natural and organic ingredients and products offering functional health benefits such as improved coat, teeth, joints and brain function. In addition, more products are being made available targeting specific breeds, age, size and lifestyle of the pets.

Two multinationals, Mars and Nestlé continue to lead pet care Belgium cat and dog food is dominated by two multinationals: Mars Belgium NV SA and Nestlé Purina PetCare SA NV. Whiskas, Pedigree, Cesar, Sheba, Perfect Fit, Frolic by Mars and Purina ONE, Friskies, Purina Pro Plan by Nestlé Purina PetCare are well known brands. As overall leaders, these companies also continued to innovate and introduce new products within the ever increasingly popular segments of dry dog and cat food. In 2011, Mars expanded its Perfect Fit and Whiskas ranges and introduced Perfect Fit Pro-Sterile, Pedigree Complete and Whiskas Indoor, Whiskas Simply respectively.

Supermarket/hypermarkets represents the majority of value sales Supermarkets/hypermarkets is set to continue to hold the majority of value sales, at 56% share of total pet care value sales in 2011. With its wide variety of product ranges from low-price products to premium and super premium products, pet care products and accessorises supermarkets/hypermarkets offers easy access to such products. Moreover, in some cities, supermarkets/hypermarkets forms a ‘one step away from home’ shopping solution, encouraging consumers to purchase pet food/pet care products whilst doing weekly and monthly shops for themselves. However, over the review period, the importance of pet super shops also increased. By providing a huge assortment of products at discounted prices and by offering promotional activities, pet superstores is a highly appreciated distribution channel by customers.

Positive outlook for forecast period Over the forecast period, positive growth is expected to remain for pet care in Belgium, with value expected to outgrow volume sales as premiumisation remains important. Clear winners in the growth

stakes remain premium dry dog and cat food as well as dog treats as pet owners rank the well being and health of their pets as increasingly high and the movement towards humanisation continues.

TABLE OF CONTENTS Pet Care in Belgium - Industry Overview EXECUTIVE SUMMARY Value growth in pet products despite economic turbulence Natural and organic products fill the pet care environment Two multinationals, Mars and NestlĂŠ continue to lead pet care Supermarket/hypermarkets represents the majority of value sales Positive outlook for forecast period KEY TRENDS AND DEVELOPMENTS Pet products maintain a good performance Mars Belgium NV and NestlĂŠ Purina PetCare continue to lead Supermarkets/hypermarkets dominates distribution but pet superstores gains share Customers prefer natural and nutritional ingredients Positive growth atmosphere MARKET INDICATORS Table 1 Pet Populations 2006-2011 MARKET DATA Table 2 Sales of Pet Care by Category: Volume 2006-2011 Table 3 Sales of Pet Care by Category: Value 2006-2011 Table 4 Sales of Pet Care by Category: % Volume Growth 2006-2011 Table 5 Sales of Pet Care by Category: % Value Growth 2006-2011 Table 6 Pet Food Company Shares 2006-2010 Table 7 Pet Food Brand Shares 2007-2010 Table 8 Dog and Cat Food Company Shares 2006-2010 Table 9 Dog and Cat Food Brand Shares 2007-2010 Table 10 Penetration of Private Label by Category 2006-2010 Table 11 Sales of Dog and Cat Food by Distribution Format: % Analysis 2006-2011 Table 12 Sales of Dog and Cat Food by Category and Distribution Format: % Analysis 2011 Table 13 Sales of Pet Care by Distribution Format: % Analysis 2006-2011 Table 14 Sales of Pet Care by Category and Distribution Format: % Analysis 2011 Table 15 Forecast Sales of Pet Care by Category: Volume 2011-2016 Table 16 Forecast Sales of Pet Care by Category: Value 2011-2016 Table 17 Forecast Sales of Pet Care by Category: % Volume Growth 2011-2016 Table 18 Forecast Sales of Pet Care by Category: % Value Growth 2011-2016

DEFINITIONS Summary 1 Research Sources Pet Care in Belgium - Company Profiles Beaphar Belgium Bvba in Pet Care (Belgium) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND PRODUCTION

COMPETITIVE POSITIONING Summary 3 Beaphar Belgium Bvba: Competitive Position 2010 Laroy Duvo NV in Pet Care (Belgium) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND AND PRODUCTION COMPETITIVE POSITIONING Maxi Zoo Belgium in Pet Care (Belgium) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND PRODUCTION COMPETITIVE POSITIONING Tom & Co in Pet Care (Belgium) STRATEGIC DIRECTION KEY FACTS COMPANY BACKGROUND Private Label

COMPETITIVE POSITIONING Summary 8 Tom & Co: Competitive Position 2010 Cat Food in Belgium - Category Analysis HEADLINES TRENDS In 2011, the overall current value growth for cat food is predicted to be 4%, which will be on a par with the current value CAGR of the review period. There will be no great change in the trends seen in the sales of cat food over the review period. Dry cat food and premium variants continued to outperform.

COMPETITIVE LANDSCAPE In Belgium, cat food continues to be dominated by two major international players: Mars Belgium and Nestlé Purina PetCare with 21% and 20% value shares respectively. No major change to this scenario is expected over the forecast period. Most product development is likely to continue in the area of premium dry cat food, where the emphasis will remain on products for specific needs, age-related or for the active or indoors cat. Mars and Nestlé are expected to be fundamental in driving innovation in these areas.

PROSPECTS Over the forecast period, overall cat food sales are expected to see a constant value CAGR of 2%. Key behind this positive performance will be premium dry cat food which is expected to achieve a constant value CAGR of 4%. Wet cat food has struggled to achieve similar growth to that of dry cat food as many consumers prefer the convenience of dry cat food; however, growth is still evident, albeit at a lower level. Positive growth of wet cat food has also stemmed from new or improved product launches such as single serve portions, which cater for consumers’ desire for convenience and easy use packs.

CATEGORY INDICATORS Table 19 Cat Owning Households: % Analysis 2006-2011 Table 20 Cat Population 2006-2011 Table 21 Cat Food Prepared vs Non-prepared Gap: % Analysis 2006-2011 CATEGORY DATA Summary 9 Cat Food by Price Band 2010 Table 22 Sales of Cat Food by Category: Volume 2006-2011 Table 23 Sales of Cat Food by Category: Value 2006-2011 Table 24 Sales of Cat Food by Category: % Volume Growth 2006-2011 Table 25 Sales of Cat Food by Category: % Value Growth 2006-2011 Table 26 Sales of Premium Cat Food by Category: Value 2006-2011 Table 27 Cat Food Company Shares 2006-2010 Table 28 Cat Food Brand Shares 2007-2010 Table 29 Cat Treats Brand Shares 2007-2010 Table 30 Forecast Sales of Cat Food by Category: Volume 2011-2016

Table 31 Forecast Sales of Cat Food by Category: Value 2011-2016 Table 32 Forecast Sales of Cat Food by Category: % Volume Growth 2011-2016 Table 33 Forecast Sales of Cat Food by Category: % Value Growth 2011-2016 Dog Food in Belgium - Category Analysis HEADLINES TRENDS In 2011, dog treats and premium dry dog food are expected to drive growth in dog food in current value terms achieving 6% and 5% growth respectively. Sophisticated dog food innovation tailored according to the pet’s age, gender, and breed continued to attract pet owners. Moreover, growing availability of innovative products such as meals based on gourmet recipes, natural ingredients and functionality are helping to expand overall value.

COMPETITIVE LANDSCAPE The competitive landscape for dog food in Belgium is very concentrated. Mars Belgium and Nestlé Purina PetCare lead, accounting for 28% and 14% share of total dog food value sales respectively in 2010. There was little change to these two companies’ shares over the review period and it is expected that they will continue to hold the largest proportion of the category moving forward. This reflects the level of brand loyalty that these companies enjoy with the leading brands of Pal and Pro Plan respectively as both companies continue to innovate in line with demand.

PROSPECTS In Belgium, over the review period, premium dry dog food and dog treats showed the best performances and boosted overall dry dog food sales. Over the forecast period, these two segments will continue to perform well and show a static growth in constant value terms. This growth will also affect overall dog food sales positively over the forecast period, even if the decline in the sales of wet dog food and dog mixers is likely to offset this to some degree. The overall CAGR value growth for the forecast period is likely to be positive as Belgian pet care was considered to not be affected by the economic climate. Belgian consumers are expected to continue to be willing to spend money to provide quality food and care for their pets.

CATEGORY INDICATORS Table 34 Dog Owning Households: % Analysis 2006-2011 Table 35 Dog Population 2006-2011 Table 36 Dog Food Prepared vs Non-prepared Gap: % Analysis 2006-2011 CATEGORY DATA Summary 10 Dog Food by Price Band 2010 Table 37 Sales of Dog Food by Category: Volume 2006-2011 Table 38 Sales of Dog Food by Category: Value 2006-2011 Table 39 Sales of Dog Food by Category: % Volume Growth 2006-2011 Table 40 Sales of Dog Food by Category: % Value Growth 2006-2011 Table 41 Sales of Premium Dog Food by Category: Value 2006-2011

Table 42 Dog Food Company Shares 2006-2010 Table 43 Dog Food Brand Shares 2007-2010 Table 44 Dog Treats Brand Shares 2007-2010 Table 45 Forecast Sales of Dog Food by Category: Volume 2011-2016 Table 46 Forecast Sales of Dog Food by Category: Value 2011-2016 Table 47 Forecast Sales of Dog Food by Category: % Volume Growth 2011-2016 Table 48 Forecast Sales of Dog Food by Category: % Value Growth 2011-2016 Other Pet Food in Belgium - Category Analysis HEADLINES TRENDS Other pet food sales benefitted during 2011 from the growing popularity of smaller pets. Sales of other pet food in Belgium are predicted to grow by 4% and 1% in current value and volume terms in 2011.

This can be mainly attributed to the increasing population of small mammals, with rabbits, guinea pigs and hamsters being especially popular amongst children. Overall growth levels expected for 2011 will be marginally higher than the review period current value CAGR of 3% giving continuity in the performance of this category.

COMPETITIVE LANDSCAPE Vitakraft SA NV and Supreme Petfoods BV dominate other pet food in Belgium with 15% and 12% value share, respectively in 2011. Vitakraft SA NV leads in both bird food and is ranked second in small mammal/reptile food, where it manufactures a wide range of specialist food and treats for different species of small mammals. Supreme Petfoods core business leads small mammal food and it attracts the consumer’s attention by giving the product ranges pet’s names such as Russell Rabbit or Harry Hamster. There is not expected to be any major changes in the competitive environment in 2011 given the brand awareness enjoyed by the two major players mentioned and they can be expected to continue to develop their product ranges.

PROSPECTS Over the forecast period, other pet food sales are expected to show around 1% value growth, driven by small mammal/reptile food, growing by a constant value CAGR of 3%. Bird and fish food which are expected to show respective constant value CAGRs of -2% and -1%, will affect the overall growth of other pet food adversely.

CATEGORY INDICATORS Table 49 Other Pet Population 2006-2011 CATEGORY DATA Table 50 Sales of Other Pet Food by Category: Volume 2006-2011 Table 51 Sales of Other Pet Food by Category: Value 2006-2011 Table 52 Sales of Other Pet Food by Category: % Volume Growth 2006-2011 Table 53 Sales of Other Pet Food by Category: % Value Growth 2006-2011 Table 54 Bird Food Brand Shares 2007-2010

Table 55 Fish Food Brand Shares 2007-2010 Table 56 Small Mammal/Reptile Food Food Brand Shares 2007-2010 Table 57 Forecast Sales of Other Pet Food by Category: Volume 2011-2016 Table 58 Forecast Sales of Other Pet Food by Category: Value 2011-2016 Table 59 Forecast Sales of Other Pet Food by Category: % Volume Growth 2011-2016 Table 60 Forecast Sales of Other Pet Food by Category: % Value Growth 2011-2016 Pet Products in Belgium - Category Analysis HEADLINES TRENDS In 2011, the pet humanisation trend continued to positively affect the development of pet product. Pet owners are willing to provide their pets with the best products available. Elaborate beds, clothing, treats shaped like human food are just a few examples to show that animals are being considered not just animals but as cherished family members. With such consideration, Belgian pet owners are prepared to allocate a reasonably high budget for pet food and pet care products and services. The main selling points of such products continue to be health, hygiene, convenience and aesthetics.

COMPETITIVE LANDSCAPE In Belgium, pet products is very fragmented. While private label dominates with 36% value share, others held 31% value share in 2010. This is due to the diversity of products in the category, with many local and small companies present. Cat litter in particular shows a strong private label presences where it enjoys 49% value share, which can be considered as a reflection of pricing levels which offers the consumer great value-for-money.

PROSPECTS Over the forecast period, pet products is expected to achieve a constant value CAGR of 2%. Cat litter is predicted to show a good performance but it might suffer from its increasing commodity status. Strong private label presence in this segment and hard discounting will also have an adverse effect. On the other hand, the increasing popularity of concepts such as agglomerating or anti-odour products and bio degradable and room for innovation will drive cat litter over the forecast period.

CATEGORY DATA Table 61 Sales of Pet Products by Category: Value 2006-2011 Table 62 Sales of Pet Products by Category: % Value Growth 2006-2011 Table 63 Sales of Pet Healthcare by Type: % Value Breakdown 2006-2011 Table 64 Forecast Sales of Pet Products by Category: Value 2011-2016 Table 65 Forecast Sales of Pet Products by Category: % Value Growth 2011-2016

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