LIST OF CONTENTS AND TABLES Dog Food in Taiwan - Category analysis... 1 Headlines... 1 Trends... 1 Competitive Landscape... 2 Prospects... 3 Category Indicators... 4 Table 1 Dog Owning Households: % Analysis 2006-2011... 4 Table 2 Dog Population 2006-2011... 4 Table 3 Dog Food Prepared vs Non-prepared Gap: % Analysis 2006-2011... 4 Category Data... 4 Summary 1 Dog Food by Price Band 2010... 5 Table 4 Sales of Dog Food by Category: Volume 2006-2011... 5 Table 5 Sales of Dog Food by Category: Value 2006-2011... 5 Table 6 Sales of Dog Food by Category: % Volume Growth 2006-2011... 5 Table 7 Sales of Dog Food by Category: % Value Growth 2006-2011... 5 Table 8 Sales of Premium Dog Food by Category: Value 2006-2011... 6 Table 9 Dog Food Company Shares 2006-2010... 6 Table 10 Dog Food Brand Shares 2007-2010... 7 Table 11 Dog Treats Brand Shares 2007-2010... 7 Table 12 Forecast Sales of Dog Food by Category: Volume 2011-2016... 8 Table 13 Forecast Sales of Dog Food by Category: Value 2011-2016... 8 Table 14 Forecast Sales of Dog Food by Category: % Volume Growth 2011-2016... 8 Table 15 Forecast Sales of Dog Food by Category: % Value Growth 2011-2016... 8 Dog Food in Taiwan - Company Profiles... 10 Fwusow Industry Products Co Ltd in Pet Care (taiwan)... 10 Strategic Direction... 10 Key Facts... 10 Summary 2 Fwusow Industry Products Co Ltd: Key Facts... 10 Summary 3 Fwusow Industry Products Co Ltd: Operational Indicators... 10 Company Background... 10 Production... 11 Summary 4 Fwusow Industry Products Co Ltd: Production Statistics 2010... 11 Competitive Positioning... 11 Summary 5 Fwusow Industry Products Co Ltd: Competitive Position 2010... 11 Uni-president Enterprises Corp in Pet Care (taiwan)... 12 Strategic Direction... 12 Key Facts... 12 Summary 6 Uni-President Enterprises Corp: Key Facts... 12 Summary 7 Uni-President Enterprises Corp: Operational Indicators... 12 Company Background... 13 Production... 13 Summary 8 Uni-President Enterprises Corp: Production Statistics 2010... 14
Competitive Positioning... 14 Summary 9 Uni-President Enterprises Corp: Competitive Position 2010... 14 Pet Care in Taiwan - Industry Overview... 15 Executive Summary... 15 Market Size Booms Due To Higher Volume Growth and Increasing Unit Prices... 15 Pet Demographic Shift Leads To Retail Sales Change... 15 Premium Segment More Resilient During Price Hikes... 15 Segmentation the Key To Drive Future Growth of Mid-priced Products... 15 Superstore and Internet Retailing the Major Growing Distribution Channels... 15 Key Trends and Developments... 16 Humanisation Trend Fuels Growth Despite Decreasing Pet Population... 16 Higher Raw Material Prices Lead To Non-stop Increase in Retail Prices... 17 Pet Superstores Pose Threat To Small-scale Pet Shops... 18 Internet Gains Importance in Retailing and Marketing... 19 Market Indicators... 20 Table 16 Pet Populations 2006-2011... 20 Market Data... 20 Table 17 Sales of Pet Care by Category: Volume 2006-2011... 20 Table 18 Sales of Pet Care by Category: Value 2006-2011... 20 Table 19 Sales of Pet Care by Category: % Volume Growth 2006-2011... 21 Table 20 Sales of Pet Care by Category: % Value Growth 2006-2011... 21 Table 21 Pet Food Company Shares 2006-2010... 21 Table 22 Pet Food Brand Shares 2007-2010... 22 Table 23 Dog and Cat Food Company Shares 2006-2010... 23 Table 24 Dog and Cat Food Brand Shares 2007-2010... 24 Table 25 Penetration of Private Label by Category 2006-2010... 25 Table 26 Sales of Dog and Cat Food by Distribution Format: % Analysis 2006-2011... 25 Table 27 Sales of Dog and Cat Food by Category and Distribution Format: % Analysis 2011... 25 Table 28 Sales of Pet Care by Distribution Format: % Analysis 2006-2011... 26 Table 29 Sales of Pet Care by Category and Distribution Format: % Analysis 2011... 26 Table 30 Forecast Sales of Pet Care by Category: Volume 2011-2016... 26 Table 31 Forecast Sales of Pet Care by Category: Value 2011-2016... 27 Table 32 Forecast Sales of Pet Care by Category: % Volume Growth 2011-2016... 27 Table 33 Forecast Sales of Pet Care by Category: % Value Growth 2011-2016... 27 Definitions... 28 Summary 10 Research Sources... 28
DOG FOOD IN TAIWAN - CATEGORY ANALYSIS HEADLINES Dog food registers a vibrant current value growth of 7% in 2011 Premiumisation continues as dog owners continue to humanise their pets, regarding them as family As production costs increase, unit prices are driven upwards to NT$122 per kg Mars Inc ranks first in dog food with a 26% current value share in 2010 Dog food is expected to grow at a constant value CAGR of 2% over the forecast period TRENDS Dog food is expected to deliver a vibrant sales performance in 2011 by registering 7% current value growth. This healthy growth is attributable to the rising popularity of premium brands which are perceived to be more nutritional options for pets. In addition, heightening production costs and raw material costs also place upward pressure on the retail selling prices of dog food. Wet dog food will continue to see negative volume growth of 2% in 2011. Persisting beyond 2010, more dog owners are observed to switch from wet dog food to dry dog food. Firstly, the rise in the retail selling prices drives more consumers to trade down from the more expensive wet dog food which costs NT$147 per kg to the dry dog food costing a much lower NT$113 per kg in 2011. Apart from being more cost-friendly than wet dog food, dry dog food is easy to store and handle. Hence, on the contrary, dry dog food will experience a 3% volume growth in 2011. Total dog population will decline marginally in 2011, continuing on with the trend which persisted over the entire review period. Apart from the heightening costs needed to take care of a dog, many working families also find it too time-consuming. With regards to the different breeds, small dogs under 9kg are still growing in number as many find them more affordable and easier to care for. In addition, increased urbanisation leading to smaller houses also reflects less space for pet owners to rear a medium or large dog in Taiwan, with too little room for them to roam within the house. Prepared food percentage for dogs continues to increase, and is expected to rise by one percentage point over 2010 to reach 39% in 2011. Convenience remains a key reason behind the growing switch to prepared food as working people in Taiwan have increasingly less time to care and prepare food for their pet dogs. In addition, prepared food is perceived to contain nutrients specifically catering for dogs. Therefore, more dog owners begin to opt for prepared food for their pet dogs instead. This switch contributes to the anticipated positive volume growth of 2% in dog food, despite the declining dog population in Taiwan in 2011. With the better care that dog owners are giving their pet dogs, the average life expectancy of dogs has generally increased over the years. There are a larger number of senior dogs requiring dog food specially tailored to the nutritional needs of elderly dogs. As a result, wet dog food for senior dogs grew from a value share of 3.5% in 2009 to 3.8% in 2010. Similarly,
dry dog food for senior dogs also grew from 18.7% current value share in 2009 to 18.9% in 2010. As dry dog food grows in popularity compared with wet dog food, flexible plastic packaging becomes increasingly common on store shelves in comparison to metal food cans and aluminium trays which are typically used to package wet dog food. Regarding pack sizes, single meal packs are more popular for wet dog food as it spoils quickly once packaging is opened. On the contrary, large pack sizes for dry dog food are a popular choice among consumers as its unit price is lower compared to smaller pack sizes. It is also easy to store and keep. As the humanisation trend becomes more prominent, pet owners begin to seek food that is ideal for their pets health conditions, in a similar way to how they care for themselves. For example, if their dogs are obese, they will purchase dog food tailored to keep the dog lean and control its weight. Apart from obesity, other health conditions typically covered by dog food manufacturers include sensitive skin, sensitive stomach, oral care and joint care. COMPETITIVE LANDSCAPE In 2010, Mars Inc continued to lead with a 26% value share. This stronghold is contributed by its portfolio of well-established brands including Pedigree, Royal Canin, Cesar and Choice covering both premium and mid-priced dog food. In second and third places were local manufacturer Uni-President Enterprises Corp and global firm Hill's Pet Nutrition Inc with 16% and 14% current value shares in 2010 respectively.
PROSPECTS Dog food is anticipated to experience a 2% constant value CAGR over the forecast period, representing a slowdown when compared to the 8% constant value CAGR experienced over the review period. This slowdown is due to the expected decline in the dog population over the forecast period. However, as more consumers are speculated to shift from non-prepared food to prepared food, growth remains on a positive trend over the forecast period.
CATEGORY INDICATORS Table 1 Dog Owning Households: % Analysis 2006-2011 % households 2006 2007 2008 2009 2010 2011 Households owning a dog Euromonitor International from official statistics Table 2 Dog Population 2006-2011 '000s of animals 2006 2007 2008 2009 2010 2011 Dog Population Euromonitor International from official statistics Table 3 Dog Food Prepared vs Non-prepared Gap: % Analysis 2006-2011 % total consumption Prepared dog food Non-prepared dog food Total dog food 2006 2007 2008 2009 2010 2011 Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources CATEGORY DATA
2010/11 2006-11 CAGR 2006/11 TOTAL Dog Treats and Mixers Dry Dog Food Wet Dog Food Dog Food Table 8 Sales of Premium Dog Food by Category: Value 2006-2011 NT$ million Premium Dry Dog Food Premium Wet Dog Food Premium Dog Food 2006 2007 2008 2009 2010 2011 Table 9 Dog Food Company Shares 2006-2010 % retail value rsp Company 2006 2007 2008 2009 2010
Total 100.0 100.0 100.0 100.0 100.0 Table 10 Dog Food Brand Shares 2007-2010 % retail value rsp Brand Company 2007 2008 2009 2010 Total 100.0 100.0 100.0 100.0 Table 11 Dog Treats Brand Shares 2007-2010 % retail value rsp Brand Company 2007 2008 2009 2010
Total 100.0 100.0 100.0 100.0 Table 12 Forecast Sales of Dog Food by Category: Volume 2011-2016 Tonnes Dog Treats and Mixers Dry Dog Food Wet Dog Food Dog Food 2011 2012 2013 2014 2015 2016 Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 13 Forecast Sales of Dog Food by Category: Value 2011-2016 NT$ million Dog Treats and Mixers Dry Dog Food Wet Dog Food Dog Food 2011 2012 2013 2014 2015 2016 Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 14 Forecast Sales of Dog Food by Category: % Volume Growth 2011-2016 % volume growth Dog Treats and Mixers Dry Dog Food Wet Dog Food Dog Food 2015/16 2011-16 CAGR 2011/16 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 15 Forecast Sales of Dog Food by Category: % Value Growth 2011-2016
% constant value growth Dog Treats and Mixers Dry Dog Food Wet Dog Food Dog Food 2011-16 CAGR 2011/16 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Number of employees Removed Removed Removed Euromonitor International from company reports, company research Company Background Uni-President Enterprises Corp is the flagship unit of Taiwan s largest food and consumer goods conglomerate Uni-President Group. The company engages in the manufacture, processing, marketing, and sale of various soft drinks, foods, flour, and animal feeds in Taiwan as well as in the Greater China area. The company was founded in 1967 and has been listed on the Taiwan Stock Exchange since 1987. Production
PET CARE IN TAIWAN - INDUSTRY OVERVIEW EXECUTIVE SUMMARY Market Size Booms Due To Higher Volume Growth and Increasing Unit Prices Taiwan s pet care market recorded healthy growth in 2011, thanks to a stable economic outlook and increasing average spend per pet. Although the total pet population continues to decline, the on-going premiumisation and humanisation trends help to drive up total volume sales. More consumers choose to purchase prepared pet food due to better knowledge of pet care. Total market sales are further boosted as unit price is still trending upwards, albeit at a slower pace compared to previous years. Pet Demographic Shift Leads To Retail Sales Change The downward trend of total pet population in Taiwan is mainly driven by the diminishing population of medium and large-sized dogs. At the same time, continued urbanisation and smaller living spaces led to the increasing population of cats and smaller dogs. Cat-related products register the strongest growth and the trend is likely to continue into the forecast period. In addition, the life expectancy of pets is prolonged due to better pet care and medical treatment. The phenomenon is reflected in decreasing sales of puppies and kittens and increasing contribution from senior dogs and cats. Premium Segment More Resilient During Price Hikes During the review period, the premium segment outperformed Taiwan s pet care market. As unit prices continued to rise, products positioned in the higher price band proved to be more resilient. The message is well received by manufacturers and importers. More high-end products, especially organic pet food or those that use natural ingredients have been introduced to the Taiwan market. Some manufacturers which focus on mid-to-low price bands also plan to expand their product offering and penetrate higher price segments. Segmentation the Key To Drive Future Growth of Mid-priced Products In recent years, mid-priced products saw slower growth as the market continues to polarise. Many industry participants are adopting more nimble strategies and more extensive product offerings to retain or attract new customers. In particular, some mid-priced brands start to launch more breed-specific, age-specific and size-specific pet food products, which were only available in premium-positioned brands in the past. Superstore and Internet Retailing the Major Growing Distribution Channels Although the local economy has bounced back from the bottom, consumers have learned how to shop more smartly and their purchase behaviour is reshaping the competitive landscape of distribution channels. Pet superstores and internet retailing are taking shares from vet clinics and small-scale pet stores, which used to be the major distribution channels in Taiwan.
Manufacturers and importers are also discovering the importance of the online community and started to use online marketing more frequently. KEY TRENDS AND DEVELOPMENTS Humanisation Trend Fuels Growth Despite Decreasing Pet Population Current Impact Outlook
Future Impact Higher Raw Material Prices Lead To Non-stop Increase in Retail Prices Current Impact Outlook
Future Impact Pet Superstores Pose Threat To Small-scale Pet Shops Current Impact Outlook
Future Impact Internet Gains Importance in Retailing and Marketing Current Impact Outlook
Future Impact MARKET INDICATORS Table 1 Pet Populations 2006-2011 '000s of animals Dog Population Cat Population Bird Population Fish Population Small Mammal Population Reptile Population 2006 2007 2008 2009 2010 2011 Euromonitor International from official statistics MARKET DATA Table 2 Sales of Pet Care by Category: Volume 2006-2011 Tonnes Dog and Cat Food Other Pet Food 2006 2007 2008 2009 2010 2011 Note: Pet Care volume sales not calculable at total market level Table 3 Sales of Pet Care by Category: Value 2006-2011 NT$ million 2006 2007 2008 2009 2010 2011
Dog and Cat Food Other Pet Food Pet Food Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Pet Care Note: Pet Care volume sales not calculable at total market level Table 4 Sales of Pet Care by Category: % Volume Growth 2006-2011 % volume growth 2010/11 2006-11 CAGR 2006/11 TOTAL Dog and Cat Food Other Pet Food 0.7 1.0.9 Note: Pet Care volume sales not calculable at total market level Table 5 Sales of Pet Care by Category: % Value Growth 2006-2011 % current value growth 2010/11 2006-11 CAGR 2006/11 TOTAL Dog and Cat Food Other Pet Food Pet Food Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Pet Care 7.3 7.8 5.7 Note: Pet Care volume sales not calculable at total market level Table 6 Pet Food Company Shares 2006-2010 % retail value rsp Company 2006 2007 2008 2009 2010
Total 100.0 100.0 100.0 100.0 100.0 Table 7 Pet Food Brand Shares 2007-2010 % retail value rsp Brand Company 2007 2008 2009 2010
Total 100.0 100.0 100.0 100.0 Table 8 Dog and Cat Food Company Shares 2006-2010 % retail value rsp Company 2006 2007 2008 2009 2010
Total 100.0 100.0 100.0 100.0 100.0 Table 9 Dog and Cat Food Brand Shares 2007-2010 % retail value rsp Brand Company 2007 2008 2009 2010 Others 23.7 23.7 21.8 21.3 Total 100.0 100.0 100.0 100.0
Table 10 Penetration of Private Label by Category 2006-2010 % retail value rsp Pet Care Pet Food Pet Products 2006 2007 2008 2009 2010 Table 11 Sales of Dog and Cat Food by Distribution Format: % Analysis 2006-2011 % retail value rsp 2006 2007 2008 2009 2010 2011 Store-Based Retailing - Grocery Retailers - - Supermarkets/ Hypermarkets - - Discounters - - Other Grocery Retailers - Non-Grocery Retailers - - Pet superstores - - Pet shops - - Veterinary clinics - - Other Non-Grocery Retailers Non-Store Retailing - Homeshopping - Internet Retailing - Direct Selling Total 100.0 100.0 100.0 100.0 100.0 100.0 Table 12 % retail value rsp Sales of Dog and Cat Food by Category and Distribution Format: % Analysis 2011 CF DF Store-Based Retailing Grocery Retailers Supermarkets/Hypermarkets Discounters Other Grocery Retailers Non-Grocery Retailers Pet superstores Pet shops Veterinary clinics Other Non-Grocery Retailers Non-Store Retailing Homeshopping Internet Retailing Direct Selling
Total 100.0 100.0 Key: CF = Cat Food; DF = Dog Food Table 13 Sales of Pet Care by Distribution Format: % Analysis 2006-2011 % retail value rsp 2006 2007 2008 2009 2010 2011 Store-Based Retailing - Grocery Retailers - - Supermarkets/ Hypermarkets - - Discounters - - Other Grocery Retailers - Non-Grocery Retailers - - Pet superstores - - Pet shops - - Veterinary clinics - - Other Non-Grocery Retailers Non-Store Retailing - Homeshopping - Internet Retailing - Direct Selling Total 100.0 100.0 100.0 100.0 100.0 100.0 Table 14 Sales of Pet Care by Category and Distr bution Format: % Analysis 2011 % retail value rsp PF PP Store-Based Retailing Grocery Retailers Supermarkets/Hypermarkets Discounters Other Grocery Retailers Non-Grocery Retailers Pet superstores Pet shops Veterinary clinics Other Non-Grocery Retailers Non-Store Retailing Homeshopping Internet Retailing Direct Selling 0.0 0.0 Total 100.0 100.0 Key: PF = Pet Food; PP = Pet Products Table 15 Forecast Sales of Pet Care by Category: Volume 2011-2016
Tonnes Dog and Cat Food Other Pet Food 2011 2012 2013 2014 2015 2016 Note: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Pet Care volume sales not calculable at total market level Table 16 Forecast Sales of Pet Care by Category: Value 2011-2016 NT$ million Dog and Cat Food Other Pet Food Pet Food Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Pet Care 2011 2012 2013 2014 2015 2016 Note: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Pet Care volume sales not calculable at total market level Table 17 Forecast Sales of Pet Care by Category: % Volume Growth 2011-2016 % volume growth Dog and Cat Food Other Pet Food Note: 2015/16 2011-16 CAGR 2011/16 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Pet Care volume sales not calculable at total market level Table 18 Forecast Sales of Pet Care by Category: % Value Growth 2011-2016 % constant value growth Dog and Cat Food Other Pet Food Pet Food Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Pet Care 2011-16 CAGR 2011/16 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources