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Brazil's Pet Owners Opt for U.S. Pet Food
By Shackford Pitcher
Brazil is not the largest export market for U.S. pet foods, but sales are expanding at a phenomenal rate in this South American country, jumping from $54,000 in 1992 to over $7 million in 1996.
At this time, only a quarter of the country's 22-million dog and cat population (70 percent are dogs) eat manufactured pet foods. However, the growth rate of the pet food sector is expected to continue between 15 and 25 percent each year.
This rapid expansion has attracted the attention not only of U.S. suppliers, but of firms already producing pet food in Brazil.
Imported pet foods now make up a large proportion of pet food retail sales in Brazil, and the United States is the largest overseas supplier. Local companies broaden their product line by importing attractively priced products.
As Brazilian companies expand their production lines with sophisticated products, U.S. exporters might find difficulty in maintaining their market share.
Thus far, U.S. export sales to Brazil have risen along with the dramatic increase in all retail pet food sales in Brazil. Pet food promoters believe the volume of pet food sales in their country is second only to the United States.
In 1990, retail dog food sales were estimated at $22.8 million. By 1995, sales had increased four times to $88 million. Though less in volume, cat food sales spiraled up more sharply, rising from $5 million in 1990 to $37.5 million in 1995.
Advertising has played a big part in creating product demand. In 1995, pet food suppliers paid advertising costs of $5.9 million on dog food and $3 million on cat food. This investment has paid off in spectacular sales increases of the products.
Crunching the Pet Food Numbers
Brazil's National Association of Feed Manufacturers (ANFAR) reported production of 450,000 tons of pet food in 1996. This volume doubled the amount reported in 1994, the first year statistics were kept.
In 1996, annual sales were estimated between $255 million and $330 million.
Relatively few companies dominate the market. Guabi Pet/Mogiana, a local company, claims a market share of 21.5 percent. U.S. companies Effem (a Mars subsidiary), Purina and Cargill share another 36 percent of the country's retail sales.
Several companies hoping to advance their market share have announced expansions and new products:
Economy brands account for 50 percent of the market, followed by standard dry product. Sales of premium pet food lines, now with an 8-percent market share, have seen the biggest increases. Only 2 percent of sales are the superpremium lines.
Premium pet foods are sold by pet stores and veterinary clinics. Pet stores and farm stores also carry the economy and standard lines.
There are several sources to track detailed information on retail sales and market share: supermarket surveys by Nielsen Marketing Services; the periodicals, Dogs and Cats, Revista Nosso Cão and Cães e Cia; and ANFAR's bulletin, Pet News. Some companies (like Cargill) mail bulletins to veterinarians, breeders and pet owners.
Exporting Requirements
Exporters must register with the Brazilian Ministry of Agriculture (MAA). This registration is handled by the Brazilian importer/distributor.
Imports from Brazil's Common Market (MERCOSUL) partners--Argentina, Uruguay and Paraguay--are duty free. Chile, a MERCOSUL associate, enjoys preferential access.
While packaging can be in the country of origin's language, an accurate and easily understood Portuguese label must be affixed to the product and include metric units, composition and a validity date (shelf-life).
Sniffing Out the Market
One of the best ways for U.S. firms to become familiar with the Brazilian pet food market is to visit or participate in the annual trade show--Pet Fair--held in São Paulo every December. The 1997 dates for the fair are December 3-5; it will be held in the Expo Center Norte. One word of caution for exhibitors: It is very important that product information be in Portuguese, not Spanish.
Pet food has been a notable feature in the past. In last year's show, 15 of the 51 exhibitors taking part in the show included Brazilian and foreign pet food manufacturers. Almost 8,000 visitors attended the show.
Want More Details?
A complete market brief is available from:
Trade Assistance and Promotion Office
Ag Stop 1052
1400 Independence Ave., SW
Washington, DC 20250-1052
Tel. (202) 720-7420
Fax (202) 690-4374
E-mail: fasinfo@fas.usda.gov
Further information about the Pet Fair trade show and other foreign shows is available from:
Trade Show Office
(same postal and e-mail addresses as above)
Tel. (202) 690-1182
Fax (202) 690-4374
The author is the Agricultural Counselor with the FAS Office of Agricultural Affairs in Brasilia, Brazil. Tel.: (011-55-61) 226-3159; Fax (011-55-61) 226-6784; E-mail: AgBrasilia@fas.usda.gov .
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