Latin America is emerging as one of the most dynamic regions for the pet care industry worldwide. It is expected to rank second in terms of per capita expenditure growth during the forecast period (2023-2028), with an annual growth rate of 5% at constant prices. Although the region’s average spending still lags behind advanced markets, its steady growth is remarkable, highlighting the increasing relevance of pets to Latin American families. Furthermore, Latin Americans’ average spending on pets exceeds the global average by 22%.
This explosive growth is in line with a series of trends that are changing the market landscape, not only from the perspective of the products offered but also from the dynamics of the competitive landscape itself. These short-term trends must be considered by any brand that wants to stay relevant in the market.
The new profile of someone’s best friend
Since Latin America has the second largest share of its population living in large cities (over one million), only after North America, the growth rate of apartment households is almost double that of individual housing units in last few years. This has led to the growing adoption of cats and smaller dogs, to become families’ new favorite companions. The small dog and cat populations in Latin America recorded a respective CAGR of 8% and 7%, from 2018 to 2023, while the large dog population only increased at a 1% rate.
Humanization as a growth driver of the indulgence and premium categories
The humanization of pets has grown over the past few years, especially in the post-pandemic era, where consumers spend time at home helping to strengthen their emotional bond with pets. In Latin America, 74% of owners consider their pets beloved members of the family, marking the highest share for any region, extending consumer health and wellness trends to them, as well as quality time and moments of entertainment.
This can be seen in the growth of domestic animals.
Dog treats in Latin America see a CAGR of 10% from 2018 to 2023, second only to the Middle East and Africa; it reached 19% for cat treats, indicating significant dynamism and growth opportunities for small and large competitors in a relatively small market
Source: Euromonitor International
Mars and Nestlé are the leading brands in this category, with a combined 60% share.
From claims to product design, brands are adapting to attract consumers looking for natural products
Along with the humanization trend, there is a greater demand for natural pet food products, which suppliers have quickly responded to with strategies that include packaging and product redesign. Consumers want to see unprocessed ingredients in their pets’ diets and are willing to pay more.
Products with claims such as natural and organic are, on average, 49% and 81% more expensive across the region
Source: Euromonitor International Via’s e-commerce tracking tool
An example of new brands launched into the market that capitalized on this trend includes Melvin’s BARF in Mexico, a premium frozen dog food brand that offers meat in the shape of burger patties. Another example is the launch of Naturalis Lifebites from ADM in Brazil, a new GMO-free line with packaging that mainly shows the ingredients of the formula in their most natural shape, while minimizing the space of kibble representation. Both examples make it clear that their appearance is related to the formula.
The pursuit of a more sustainable life is reflected in sustainable packaging
The trend towards a more sustainable life is growing worldwide, and Latin America is no exception. Consumers are looking for healthier products due to current health and wellness trends, but they are also looking for products with a lower environmental impact that are more in line with their value system. In Latin America, using sustainable packaging is one of the top sustainable practices sought by consumers.
In addition, according to Euromonitor International’s Voice of the Consumer: Sustainability Survey 2023, Latin America is the region that most looks for “recyclable” and “recycled” claims on its packaging, with 57% and 60% of consumers, respectively.
Benefits of e-commerce as a growth driver
Due to its convenience and ease, e-commerce has gained worldwide relevance, especially since the pandemic. However, it was also boosted in Latin America by greater internet access, smartphone penetration, and the growing trust in this channel within the region, positioning Petz as the most important online pet food retailer in Brazil, and Mercado Libre in Mexico in 2023.
According to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023, 41% of consumers are primarily motivated to use this channel by the ability to find better prices, while 35% of consumers value free shipping, and 33% value different brands. available.
Read our article Driving Premiumization in Pet Care Through Value Propositions to see how pet humanization has led to the premiumization of the industry, and visit our E-Commerce page to closely monitor the development of this channel in Latin America.
