Operating environment

Market outlook

Published in the Financial Statements Release October 2021 – September 2022

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 3.4 billion (in 2021), with Sweden as the largest market, accounting for approximately EUR 1.4 billion, Finland approximately EUR 1.0 billion and Norway approximately EUR 1.0 billion.

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 pet care market was positively affected by the Covid pandemic over 2020 and 2021, mainly through increased adoption of puppies and kittens and to some extent higher spending on discretionary categories, such as accessories. Puppy adoption rates began normalizing from these peak levels over 2022, while still above long-term averages. The pandemic period resulted in a step-up of Nordic pet ownership rates which increases the addressable market size for future years as the pandemic gains are expected to have a long tail effect.

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

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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