A CORNUCOPIA OF IDEAS?

The most recent Global Pet Forum – convening in Prague earlier this year – had a most challenging theme: "expanding the pet market - and your piece of the pie!"

The challenge was twofold: expansion and cooperation.

Why? The industry has seen slow growth over the last years; therefore expansion most likely has not been more than "retain the share we have in the market we know". Individual company plans may have been aggressive, but much more to oust competition than to grow the market. And, expanding the market is not something that can be done by individual companies anymore. A collective approach to expansion needs to be considered.

Ideas for collective approaches were presented during the Forum. As were trends in the market. Initiatives were discussed, but the common denominator was the question: "how do we get all noses pointing in one and the same direction?"

Perceived controversies are the relationship between manufacturers and retailers; as well as the relationships between manufacturers and distributors. On the surface their objectives may coincide – all geared towards expanding the market - but as soon as shareholders' value emerges as one of the individual objectives, most of the hope for collectivity – if not all – is lost.

In some geographical markets petfoods are in their growing-stage; say the earlier phase of maturity. When observing what the activity of both manufacturers and retailers really is about, one cannot but wonder if the short-term is the only thing that counts. In a growing market there is room (and also the necessity) for collectivity to popularise the use of products, in this case foods. If only to have a massive base once that market starts plateauing. By explaining the positive effects on health and wellbeing of the animal that industrially prepared foods have. A collective approach provoke market-expansion. It is of course up to the manufacturer and retailer to work on getting (more than) their fair-share of the growth. However, instead of investing in expansion the industry now seems to invest in destruction. Too early in the development of the market (again, this relates to petfoods) price has become the focal point. This implies that funds available for a collective approach are gradually melting away; the focus again becomes a selfish one!

One can argue that private label has a negative influence on the expansion of the market. They tend to replace branded alternatives at a lower value-base, but are not to be seen as drivers for market-growth. Nobody will buy a dog because the food gets cheaper!

Furthermore private labels put margins under pressure, certainly for the manufacturers. This implies that resources available to expand the market (new product development being one of them because genuinely new products provide an impetus for market-growth) are likely to decrease.

All-in-all the industry doesn't lack ideas to expand the market; it's the translation of these ideas into meaningful concepts that needs to get more focus! Wherever and whenever possible on a collective basis to have the optimum use of resources available.

Expansion of the pet market is a long-term game; entering this game with a short-term gain objective will prove to be counter-productive and nothing will have changed vis-à-vis the current status quo.

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