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How Are Startups Disrupting The Rs 3500cr Petcare Space?
While these sectors have seen growth, there are many sectors that have not been looked into and are yet to realize their potential. One such industry is the pet care start-up space.
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The last one and a half years have seen a rise in investment and finance across the edtech and healthcare start-up space. While these sectors have seen growth, there are many sectors that have not been looked into and are yet to realize their potential. One such industry is the pet care start-up space.
Is there real potential for pet care startups?
India is a country with 28-29 million pets and accounts for a market of INR 3500 cr in this sector. Petcare is the fastest-growing category in the FMCG sector with 30-35% growth in the last two years. Speaking about the same, Ganesh Ramani, MD, MARS Petcare India notes, “We believe that this growth has been driven by urbanization and emerging nuclear families combined with changing pet ownership and pet care perspective with pets going from being just security to becoming family members.” The pandemic further propelled the adoption of cats and dogs which catapulted the sale of pet food and pet care products. This has in turn increased the rise in pet specialty stores and presence on e-commerce platforms with increased reach.
Further with hybrid working - where people are still partially working from home, it allows them to spend more time with their pets and indulging in more and more pet care products. This has led to the development of a diverse range of pet food and pet care products. “Mars Petcare has been cognizant of evolving needs of pet parents in these changing times and thus introduced products ranging from kibble and treats for dogs and cats and also litter for cats.”, says Ramani about how he is coping with the increase in specific market demands.
Why is it growing now?
The pandemic has accelerated this industry, with pet parents spending a lot more time with their pets during the lockdown. The work-from-home phases have additionally seen that many people, especially those who live alone, have adopted pets over the last few months. A lot of pet parents have moved to their native cities taking their pet along or adopting a pet in their hometown, which further contributes to the rest of urban and smaller towns growing faster. Better pin code reach of online players and rise in e-specialty pet stores has also aided the overall reach.
Presenting an interesting take on this, Rashi Narang, Founder and CEO ‘Heads up for Tails' notes, “Animal companions offer people with comfort, hope, and so much loyalty. They help with our mental health and keep us grounded. I think that people discovered this during the pandemic and so, more families have pets now.” The psychological aspect of pets as companions has given people an additional incentive to invest in them as family and not an appendage to their domestic ecosystem.
Which verticals are growing now?
Talking about which verticals are specifically growing, the nutrition of pets holds utmost importance, especially during the pandemic. "Petfood is the fastest growing FMCG product in India and is no longer a niche segment. The Petfood sector which has reached INR 3500 crores is outperforming others in the FMCG landscape. MARS Petcare retained a strong lead in the pet food and care industry as of 2019 and maintained its position in 2020 and have gained market share in 2021 outpacing the category growth which is expected to be around 35 - 40%.”, says Ramani.
As per industry experts, the sales in pet food have soared by over 20% in 2020 and 35-40% & in 2021. More than 15% of the pet food sales are contributed by e-commerce as against an FMCG industry benchmark of 4-7%. With the sector growing there has been an escalation in e-commerce sales due to the introduction of e-specialty stores such as Petsy, Heads Up for Tails, and Shakehands. “In the last two years, we have not only introduced products across the Pedigree and Whiskas but have also expanded the brand portfolio at both ends – IAMS in the Super premium segment and Chappi in the economy segment.”, adds Ramani.
What will happen next?
As the consumers become more aware of what is good for their pets, they will be holding brands to account for the quality of their products and services. “As a brand, HUFT is looking to produce more sustainably and mindfully. We have a whole range of natural, effective anti-ticks and flea products that we’ve brought out which focus on organic ingredients and natural pest repellents. We also have sustainable toys, bedding, and more.”, adds Narang.
Sustainability, be it of sourcing ingredients, the manufacturing and disposal process is of pivotal importance across domains. The pet care industry is not far behind. With ESG and CSR the buzzwords, it is worthwhile for them to take into account the same.
Despite the promise and potential this industry shows, unfortunately, validated information on growth numbers is not available. Petcare to startups is what the sunrise industry is to the organized sector, a rising star yet to realize its full potential.