Operating environment
Market outlook
Published in the interim report October 2019–June 2020.
Musti Group (Musti) 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. According to Euromonitor, the market is estimated to be worth approximately EUR 2.8 billion, 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 820 million and approximately EUR 790 million, respectively.
The rise of “Pet Parenting” refers to the increasing 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. Musti believes it is able to continue its strong performance, as it is focused on the high-quality products and services the Pet Parents seek.
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 76 per cent of total market spend and are characterised by repeat purchasing behaviour that is consistent through the cycle. Consumers display a willingness to sustain spending on pet care through economic downturns, preferring to cut expenditure on alternative spend categories.
Musti believes that the trends driving the pet care market, such as the pet parenting megatrend and pet population growth, will remain robust also after the COVID-19 pandemic. It has been proven that historically the amount of puppy registrations has increased during economic downturns. This has been evident for example in Finland in the 1990s recession and during the financial crisis in 2008–2009.
Trends in the Nordic pet care market
Pet parenting
Pet humanisation 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 a more diverse range of products and services.
Global consumer megatrends
There are several other global consumer megatrends that are highly visible across the pet care market. These include increasing environmental consciousness, desire for convenience at shopping, increasing focus on health and wellness, supply chain transparency and increased demand for services.
Pet population growth
The number of households continues to grow (forecasted at a CAGR of 0.9% to 2023; from 9.8 million to 10.2 million Nordic households). The Nordic pet population is expected to continue growing at a slightly slower CAGR of 0.7% to 5.4 million pets in 2023 (3.2 million cats and 2.2 million dogs).*
Market development and channel structure
A key characteristic of the pet care market is the stable, recurring nature of purchases. The increasing prevalence of pet parents across the Nordic countries has led to a channel shift towards pet specialists (including online stores).
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 was clearly evidenced throughout the 2007–2009 downturn.
*Source: Musti Group’s offering circular 31 January 2020
