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South Africa’s pet care industry expands

January 2, 2022
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Why this is important to Wisconsin businesses: More South Africans are adopting pets, and that has spurred growing sales in all aspects of pet care.

With the COVID-19 pandemic keeping people home more, many South Africans have found new companionship by welcoming pets to their families. The rise in pet ownership has boosted sales of pet care products, an industry with revenue of $460 million USD (R7.1 billion) in South Africa. South Africa has 9.1 million pet dogs—more than twice as many as Australia—and about 2.4 million cats. Neighboring countries such as Namibia and Botswana also have large pet populations, making regional distribution of pet care products an important aspect of the business.

Food for pets is the largest market segment in the pet care sector, with sales of approximately $95 million USD (R1.5 billion). South Africa has 23 midsize and large companies that manufacture animal feed, mostly for livestock, but several of those create lines of food for pets, too.  Another 10 companies focus solely on pet foods, so demand is high for protein, vitamin and mineral content.  Firms selling into the pet food ingredient sector are encouraged to look at this market. Finished imported pet food sales totaled approximately $40 million USD (R614 million) in 2016, according to one study. Additives and ingredients, as well as specialized food requirements, are in demand in this market, which typically is price-sensitive.  It is important for Wisconsin firms to note that price, quality and differentiation are significant factors in the pet food sector.

Pet health care is another key growth area. South Africa is currently ranked 13th in global sales of animal health products. Most health care devices and products are imported from the U.S. or Europe, and most of the main multinational pharmaceutical companies (including Bayer, Merial, Novartis and Pfizer) are represented in South Africa. According to MarketResearch.com, the South African veterinary pharmaceutical market was valued at $42 million USD (R6.4 billion) in 2015 and was forecast to reach $66 million USD (R10.1 billion) in 2021, indicating strong growth. The pet segment is a small portion of the total amount spent on veterinary care, but is growing in relative significance.

The sophisticated pet market is reflected in the large number of pet shops (both chains and independents) and supported by a wide range of magazines, online resources and clubs. There are more than 500 veterinarian businesses—a directory is available at www.petz.co.za. They are a key point of purchase for a large number of pet owners for food, health products and toys. Major retailers are competing more aggressively as well. Most notably, last year, Checkers, a large South African grocery chain, opened the Petshop Science chain. Woolworths, another large grocery chain, has also grown its pet goods offerings, adding toys and medications. Among the wholesalers, the largest is Lakato, with a 60% share of the animal health market (by value); most of its products are pet foods, and Lakato sells exclusively to veterinarians.

Online sales also are growing in significance. A wide range of sites has appeared in recent years.  Specialty pet services are commonly advertised online if an owner is looking for a pet sitter, training, security or alternative health care.

The pet sector has been showing strong growth over recent years, and opportunities abound to enter the South African market with well-differentiated products for Wisconsin exporters with a good grasp of the industry landscape.

 

 

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