Country report: Mexico – Increased product penetration in rural areas is key to industry growth

Mexico has seen a positive sales trend that is mainly due to a steady increase in the penetration of balanced pet food for dogs and cats. This has led to double-digit growth in volume and market value.

Pet food production was 1.4 million tons in 2021, a 6.5% increase on 2020. Market value is estimated at $2.3 billion (+8.5%). Important gains in recent years were in wet food and the cat food market. Considering market conditions and consumer trends, animal nutrition manufacturers association CONAFAB expects similar growth over the next 4-6 years.

Maturity and growth

The industry estimates a dog population of 30 million and almost 10 million cats. A mature Mexican pet food market could be between 2.5 and 3 million tons annually, depending on the prevalence of bigger breeds, the number of pets in a household and other lifestyle-related factors.

Current market conditions indicate its growth potential. Low market penetration, such as in rural environments, is perhaps one of the most key factors for sustained growth. Another is the increased sense of responsibility for owning a pet and a stronger emotional pet-owner bond, especially in large cities, that provide market segmentation opportunities and demand for value-added products.

E-commerce for high-end products

Until 2019, online sales were less than 2% of all transactions in Mexico, but during the pandemic the online channel experienced the greatest growth.

It is not yet clear whether this marketing channel will increase enough to gain the same relevance as supermarkets and convenience stores, which have an estimated weight of 35% of the total. Remaining sales from the pet market are currently made up of the wholesale channel (30%) and direct distribution from the manufacturer to the convenience store (20%).

Low-end product segments have the biggest share of the Mexican market (50%) and this is not likely to change in traditional marketing channels in the near future. Super premium food represents 5% of the market. CONAFAB anticipates that high-end products will consolidate in the online channel and low-end products will remain in traditional channels.

Export potential

Mexican industry exports have grown exponentially, exceeding import volume for the first time in 2021. 73,716 tons of food were exported, almost 2,000 tons more than imports. In contrast, import value was $154.7 million, almost double that of exports, as imported products are chiefly super premium.

Over the last 3 years, Mexican products have been shipped to 33 countries worldwide. This is partly thanks to 15 fair trade agreements that Mexico has signed with over 50 countries around the globe. If certain regulatory issues can be resolved, Mexico will continue to have significant export potential.

Unusual consumer trends

Market research conducted after the height of the COVID pandemic reveals interesting trends in consumer habits. A CONAFAB study showed that, in 2021, pet owners mostly spent money on pet food (60%), followed by healthcare and vet visits (14%), grooming products (8%), and other services such as aesthetics and grooming (7%).

While family expenditure on pet care and well-being has increased, another interesting development is the emotional bond between pet and owner strengthening to unusual levels for Mexico. And if your pet is considered a family member, you worry less about the price of meeting its needs.

Animal welfare legislation

Animal welfare is increasingly on the social, economic and political agenda, with a number of legislative initiatives to promote responsible pet ownership and pet well-being.

Currently, the industry is working on aspects relevant to the growth and development of the pet market, such as a regulatory framework, market penetration and quality guarantees. The CONAFAB division AMASCOTA, formed by dog and cat food manufacturing companies, works alongside the affiliated companies that represent almost 95% of the total market.