Operating environment

Market outlook

Published in the Financial statements release October 2019 – September 2020

Musti Group operates in the Nordic pet care market, broadly defined as the sale of pet food, treats, products, services and veterinary care across Finland, Sweden and Norway. The market was estimated to be worth approximately EUR 2.9 billion (in 2019), with Sweden as the largest market, accounting for approximately EUR 1.2 billion, and Finland and Norway estimated to be similar in size, at approximately EUR 0.9 billion and approximately EUR 0.8 billion, respectively.

“Pet Parenting” refers to the tendency of people to treat their pets like family members. As a result of this trend, people are spending more on higher quality and more premium food, as well as a more diverse range of products and services. This underlying trend that drives the long-term structural growth of the pet care market remains robust, shifting spend towards higher quality nutrition, a more diverse range of accessories and wider adoption of services. The COVID-19 pandemic has affected market dynamics since spring 2020 mainly through an increased number of puppies and kittens, in line with historical evidence of developments during economic downturns, and increased temporarily demand in online channels.

The pet care market is resilient, underpinned by non-discretionary purchasing behaviour. Non-discretionary categories such as food, cat litter and veterinary services make up approximately 75% of total market spend and are characterised by repeat purchasing behaviour that is consistent through the cycle. Consumers display willingness to sustain spending on nondiscretionary pet care purchases even while expenditure on alternative categories has been affected.

Trends in the Nordic pet care market

Pet parenting

Pet parenting is a major development in pet care that continues to have a profound impact on the global pet care market. People are increasingly treating their dogs and cats like members of their family, spending more on higher quality and more premium food, as well as on a more diverse range of products and services. Musti Group estimates that Pet Parents occupy close to one third of the total pet owning population but account for one-half of the total market spend.

Global consumer megatrends

There are several global consumer megatrends that are highly visible across the pet care
market. These include increasing environmental consciousness, desire for convenience in shopping, increasing focus on health and wellness, supply chain transparency and increased demand for services.

Pet population growth and increased number of puppies

The number of pets in Musti Group’s operating markets has been seen to grow throughout the year as a result of an increased number of puppies. This development is driven by the ongoing strong pet parenting trend accelerated by the COVID-19 period and the increase in remote work. These trends form a solid foundation for market growth also going forward. The number of households and the Nordic pet population are expected to continue growing in the coming years.

Channel shift

The increasing prevalence of pet parents across the Nordic countries has led to a channel shift towards pet specialists. Recently there has been a strong shift towards online boosted by the effects of the COVID-19 pandemic on customer behavior.

Resilience of the Nordic pet care market

Consumers display a willingness to sustain spend on pet care through economic downturns, preferring to cut expenditure on alternative spend categories. In the Nordic countries this phenomenon has been clearly evidenced during the COVID-19 pandemic in 2020 as well as previously throughout the 2007–2009 economic downturn.

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