When the pandemic prevented Atlanta-based investment analyst Nancy Razzouk, 29, from seeing her husband for months, she found the perfect solution to the loneliness: Bruce, a golden retriever.
Ms Razzouk admits she spoils Bruce. He eats sugar-free pet yoghurt, home-made ice cream and receives toys from a subscription service. But if the recession cuts into Ms Razzouk’s income, “I will scale back if I need to,” she said.
The £104bn global petcare market has boomed during lockdown. Companies from the world’s largest foodmaker Nestlé to UK retailer Pets at Home have benefited as lonely householders adopted animals in record numbers. Now, however, there are fears that the economic crunch caused by coronavirus will crimp that growth.
“In any market [in a recession] we see people managing their spend through either looking at cheaper products, trading to private label alternatives or shopping in cheaper stores,” said Tesni Steele Jones of market researchers Kantar.
The American Pet Products Association in a June survey found over a quarter of owners view pet supplies as discretionary and plan to curtail purchases to save money — though the rest said their pet spending was recession-proof.
Chewy, a US online pet goods retailer listed last year, has been a focus for optimism, especially as investors sought pandemic-proof business models: Chewy’s share price has risen some 180 per cent since March as sales have climbed. At Nestlé, the Purina petcare division has been the largest contributor to its growth this year.
Peter Pritchard, chief executive of Pets at Home — whose shares are up 40 per cent this year — said: “More people’s working lives are more home-centred, and that facilitates their ability to have a pet. That’s probably been the structural change that’s taken place through the pandemic.”
Petcare was growing strongly before the pandemic. Over the past decade the size of the global market has expanded by an average 5.8 per cent a year, according to Euromonitor, more than double the rate of the confectionery market, for example. In China, the world’s second-largest petcare market, the average annual growth rate was 20.7 per cent.
This has led consumer goods companies such as Nestlé and Mars to pour resources into the sector. US food group General Mills jumped in with the $8bn acquisition of pet foodmaker Blue Buffalo two years ago.
Bernard Meunier, chief executive of Nestlé Purina Petcare for the EMENA region, said: “The pet population is growing around the world at a slow but regular pace. There is also . . . this humanisation trend at play, for pets to be considered more as part of the family.”
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