A Tale of Two Regions

Pet Care in Western and Eastern Europe

• Overview

• Western Europe

• Eastern Europe

• Prospects

OVER THE PAST 5 YEARS

2.7%CAGR

GLOBAL RETAIL VALUE SALES

$109billion

$13.5 billion

REAL TERM GROWTH

Value Drives Developed Markets

0%

1%

2%

3%

4%

5%

6%

7%

-1% 0% 1% 2% 3% 4% 5% 6% 7%

Ret

ail v

alu

e %

CA

GR

(USD

co

nst

ant,

fix

ed 2

01

7 e

xch

ange

rat

es)

Retail volume CAGR%

Pet Food Retail Value Growth 2012-2017

Eastern Europe

Western Europe

Asia Pacific

Australasia

North America

Middle East and Africa

Latin America

Western Europe

• 24% of total

• 0.0% volCAGR 2012-2017

Eastern Europe• 7% of total

• 2.3% volCAGR 2012-2017

Volume Sales Differ Significantly

0

1000

2000

3000

4000

5000

6000

7000

8000

2012 2013 2014 2015 2016 2017

00

0 T

on

nes

Total Volume Sales of Pet food in Europe 2012-2017

Western Europe Eastern Europe

Eastern Europe

Global Pet Care Sales 2017

WE EE NA LATAM APAC AUS

5 bn US$

Eastern Europe Pet Care Value Sales

Dog Food Cat Food

Other Pet Food Pet Products

Western Europe

Global Pet Care Sales 2017

WE EE NA LATAM APAC AUS

28bn US$

Western Europe Pet Care Value Sales

Dog Food Cat Food

Other Pet Food Pet Products

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mill

ion

an

imal

s

Dog Population Shifts in West and Eastern Europe

Western Europe Eastern Europe

Diverging Dog Trends

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mill

ion

an

imal

s

Cat Population Shifts in West and Eastern Europe

Western Europe Eastern Europe

But Similar Cat Preferences

Pet Care Retail Value Sales 2017

Russia

Poland

Czech Republic

Hungary

Romania

Ukraine

Slovakia

Bulgaria

Russia Dominates Eastern Europe

4% CAGRValue Sales 2012-17

Pet Care Retail Value Sales 2017

UK

Germany

France

Italy

Spain

Finland

Denmark

Greece

Balance in Western Europe

2% CAGRValue Sales 2012-17

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2013 2014 2015 2016 2017

% v

alu

e gr

ow

th

Retail Value Growth 2013-2017

Bulgaria Czech Republic Hungary Poland Romania Russia Slovakia

Eastern Europe Growth

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2013 2014 2015 2016 2017

% v

alu

e gr

ow

th

Retail Value Growth 2013-2017

Denmark Finland France Germany Greece Italy Spain United Kingdom

Western Europe Growth

• Slide divider WE

-1%

0%

1%

2%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Economy Mid-Priced Premium

USD

mill

ion

(c

on

stan

t, f

ixed

20

17

exc

han

ge r

ates

)

Dog and Cat Food, Western Europe

2017 sales 2012-2017 CAGR

Premium Drives Sales

Treats Rule

0

1

2

3

4

5

6

7

8

9

10

0

500

1000

1500

2000

2500

Cat Treats Dog Treats

% C

AG

R

US$

mill

ion

Dog and Cat Treats in Western Europe 2012-2017

Innovation in Western Europe

Hugo & Celine by Hugo & Celine ABTom&Co Snac’o Olijf by Aniserco SA/NV

Sources: https://catalogue.tomandco.be; http://www.hugoandceline.com

Delicate Textures

Sheba Soup by Mars (UK)

Natural Goes Mainstream

And So Does Raw

Freshpet In Tesco (pets at Home) Wainrigths expands into raw

Stepping Up Credentials

Naturals by Bozita GmbH (Germany)

Stepping Up Credentials

Beco Pet Food UK

Customisation and Subscription

• Slide divider EE

0%

1%

2%

3%

4%

5%

6%

7%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Economy Mid-Priced Premium

USD

mill

ion

(c

on

stan

t, f

ixed

20

16

exc

han

ge r

ates

)

Dog and cat food, Eastern Europe

2016 sales 2011-2016 CAGR

Opportunities Across All Price Bands

0

1

2

3

4

5

6

7

8

9

10

0

20

40

60

80

100

120

140

Cat Treats Dog Treats

% C

AG

R

US$

mill

ion

Dog and Cat treats in Eastern Europe

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Bulgaria Poland Russia Slovakia

Share of Prepared Cat Food

2011

2016

Prepared Food Penetration

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Bulgaria Poland Romania Russia

Share of Prepared Dog Food

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Val

ue

gro

wth

(at

co

nst

ant

20

16

pri

ces)

Growth in Disposable Income per Household 2011-2016

Opportunities exist, despite Russian crisis

Price Competition in Hungarian Mid-Priced Cat Food

HUF179/USD0.61100 g

HUF115/USD0.39100g

Price Competition in Czech Premium Dog Food

CZK1599/USD6212 KG

CZK899/USD3515 KG

Replicating Human Food Packaging

Chetveronogiy Gurman Brilliant Line by Chetveronogiy Gurman OOO

Sources: www.mealberry.ru; own photo

Consumer Education in Lithuania

Cats cannot resist our Whiskas food. Each meal is carefully balanced and contains all necessary nutrients, vitamins an minerals. Besides, they are tasty!

Prospects

Health

Convenience

ValueIndulgence

Sustainability

Lifestyle

Major Food Trends

Don’t Say Diet

Portable

Breakfast

Affordable Luxury

Single

Origin Food

Flexitarians

Anti-Big Food

Health And Lifestyle Blend

Technology Conquers All

-2

0

2

4

6

8

10

15 to 16 16 to 17 17 to 18 18 to 19 19 to 20 20 to 21 21 to 22

Pet Care Growth by Region 2017-2022

Western Europe Eastern Europe North America Latin America

Australasia Middle East and Africa Asia Pacific

Global Overview

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

40,000.0

45,000.0

2017 2018 2019 2020 2021 2022

Dog and Cat Food Future Prospects 2017-22

Economy Mid-Priced Premium

Internet Retailing Set For Strong Growth In All Regions

PET CARE OVERVIEW

0

2

4

6

8

10

12

14

16

0

0.5

1

1.5

2

2.5

NorthAmerica

WesternEurope

Asia Pacific EasternEurope

LatinAmerica

Australasia Middle Eastand Africa

% C

AG

R

Val

ue

sal

es,

USD

bn

Pet Care Internet Retailing Sales 2016 and CAGR 2016-2021

2016 value sales 2016-2021 CAGR %

THANK YOU FOR LISTENING

Paula Flores

Head of Pet Care Research

paula.flores@Euromonitor.com

60-61 Britton Street

EC1M 5UX

London