Private Labels take a bite out of Europe’s pet food market giving retailers 34% share of €10.8 billion market

In a recent press release, the PLMA International Council reported that general growth in the market share of store brands was to be observed in 17 European countries. This is revealed by updated data from Nielsen IQ, which was commissioned by the PLMA. According to this, the value share increased by comparison with the previous year across all product groups by 1.7 per cent to 38.1 per cent in total. In 16 out of 17 countries, there was a rise in retailer's brands, with a slight decline only being registered in Switzerland. Considered from a global perspective, European countries continue to be among the biggest markets for private labels.

New data from Circana, the leading advisor on consumer complexity and formerly IRI and The NPD Group, reveals that retailers have capitalised on the growing pet food category by launching more private label products. They increased their share of the €10.8 billion category by 18% (€3.6 billion) during 2022 across Europe's six largest markets (France, Italy, Germany, Spain, UK, and Netherlands). In the last quarter of 2022, this growth accelerated to 25% as pet owners continued to trade down from their favourite brands.

Private labels now have 34% value share of the pet food category across Europe. It is especially high in Germany and Spain, where a wider range is available in discounter channels. Across total FMCG, private labels now make up 38% of value sales in Europe (€229 billion).

Value sales of pet food have grown across Europe by 5.4% over the last four years to reach €10.8 billion in value sales. During 2022 that growth rate almost doubled to 12% (compared to 5.9% annual growth in 2021) driven by inflation and an explosion of pet ownership[1]. Innovation in pet food rose by a tail wagging 39% in 2022 compared to 2021 as more people took ownership of pets. 

Ananda Roy, Global SVP, Strategic Growth Insights, Circana said, 'Led by manufacturers and retailers in the UK and Italy, there has been a lot of innovation around breed and age-based nutrition. This health and wellness focus taps into the boom in new pet ownership that started during the pandemic and allows manufacturers to follow the life of these pets as they grow. Other innovations include the use of human food ingredients such as vegetables and pulses as a source of high protein, low fat and balanced nutrients especially where traditional ingredients may cause allergies or sensitivities.

As a result of the innovation boost, new product launches in pet food accounted for 9% of total pet food sales (for private labels and national brands). New product launches contributed a substantially higher percentage of sales in Germany (28%) and the Netherlands (11%) than the other European countries.

Intense inflationary price increases (of around 12%) did not lead to the same declines in volume sales seen in across total FMCG (-1.1% for total FMCG in 2022) or other categories such as food, where consumers were forced to cut back on consumption as the cost of living crisis became embedded. Unit sales of frozen food for example declined by -4.1% and chilled -4.1%. Instead, pet food experienced a small uplift in unit sales of +0.4% (and 1.6 percentage points for private labels), suggesting that this category is resilient to inflationary turbulence.

Households continued to buy their favourite pet food brands at the beginning of the cost of living crisis, even while they were switching to private labels. Eventually the availability of as good quality private labels and intense cost pressures have seen a growing number of shoppers switching from their favourite national brands.

'Pet food has traditionally been dominated by trusted national brands, so the strides retailers have made developing as good as quality alternatives that appeal to consumers' very real need to lower the cost of their shopping basket are remarkable,' added Roy. 'It highlights, once again, the growing regard for private labels; more consumers perceive them as being innovative and as good or better than many of the national brands that they compete with. The quality of private label pet food in particular, with specialised nutrition or the inclusion of high quality human food ingredients, differentiates private label significantly.'

Other highlights of the analysis were: 

• UK and Germany led value sales growth. Value sales of pet food grew by +12.7%) in the UK and +11.3% in Germany, which in addition to other markets added €1.1 billion to the category.
• Price inflation was highest in the UK and Spain – With an average price inflation of 12% across the EU6, the highest in the UK and Spain (c15% over 2021 prices).
• Pet treats and toys grew by +13.1% in 2022, compared to the previous year, adding €50 million to the total €0.4 billion value sales as families looked for ways to show their love to their furry friends.

Pet facts:

During the last decade, the number of European households owning one or more pets has increased by approximately 20 million to 91 million households according to the European Pet Food Organisation.

About Circana

Circana is the leading advisor on the complexity of consumer behavior. Through unparalleled technology, advanced analytics, cross-industry data and deep expertise, we provide clarity that helps almost 7,000 of the world's leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand and outpace the competition. Learn more at www.circana.com.

by All pet Food