Spotlight on Brazil: Pet owners prioritize health despite challenging economics
According to Mintel, 91% of Brazilian pet owners say that investing in their pet's health is a priority for them.
"In Brazil and around the world, we are seeing pet owners prioritize the health and wellbeing of their pets more and more,” Kate Vlietstra, director, food and drink research at Mintel, told FeedNavigator.
She said one manifestation of this trend is owners turning to more natural formulations, including homemade options, to give their 'fur babies' healthy meal choices.
“We also saw that between 2019 and 2023, the percentage of pet food launches in Brazil that featured a natural category claim such as free from added/artificial colorings/preservatives rose from 49% to 68%,” she said.
Besides demand for less-processed and more-natural pet food options, Vlietstra highlighted growing momentum for fresh food, driven by increasing attention to food processing, as a key wellbeing trend in Brazil.
New market report
Mintel’s observations align with those outlined in a new Global Agricultural Information Network (GAIN) report on the Brazilian pet food industry.
The report finds that natural nutrition is an area that has caught the attention of pet owners wanting to offer better food and quality of life to their pets, and reported that natural lines generally include chicken breast and gizzards, eggs, collagen, vegetable and grain.
It also identifies a shift to a more preventative strategy to pet health, saying: “In the past, natural nutrition was only sought when pets had health problems that demanded specific nutritional care. However, this scenario is changing, and pet owners are adopting healthier pet food prior to the development of specific diseases.”
According to this report, during 2023, the Brazilian pet industry (which includes pet food, accessories, and medication) grew by 12% in 2023 - making it the third highest growth pet market in the world, after the US and China. The industry generated US$9.42bn in revenue, which represented 5% of global pet industry revenue, of which 78% (US$7.35bn) was pet food - 4% more than the previous year.
Growth defies economic logic
The report acknowledged that this growth was surprising, given the country’s economic climate: Brazil had a population of 203 million people in 2022 and 60% of people earned the minimum monthly wage of R$ 1212 (US$234.88) per month or less. The unemployment rate in Q1 2024 was 7.9% and GDP is expected to grow by 2.1% this year, with inflation forecast at 4%.
“When observing the macroeconomics scenario in Brazil, one would imagine that the pet industry would face challenges in growing, as this type of spending could be considered disposable consumption, for high-end consumers,” according to the report’s author.
However, economic hardship is no deterrent to pet ownership, which grew by 3.6% in 2022 to 167.6 million pets, according to the Brazilian Association of the Pet Products Industry, Abinpet. Dogs are the preferred pet, accounting for 40% of the population.
International trade
Between January and May 2024, Brazil exported US$43m or 37,700 metric tons of pet food - a 13% increase on the same period last year. The top five destinations were Colombia, Uruguay, Chili, Bolivia, and the United Arab Emirates. Imports for January to May 2024 totaled US$7.8m from eight countries, higher than for the equivalent period last year.
Two challenges facing companies who export to Brazil are pet food taxation and product registration legislation, according to the report.
“When compared to other countries, the pet products industry is heavily impacted by taxes; Brazilian companies pay up to 51% in taxes, whereas in Europe the tax is about 19%, and in the US 7%,” noted the report’s author, adding that this was a challenge for exporters as well.
However, if a proposed tax reform for a simplified value added tax (VAT) comes to fruition, this could mean tax breaks for pet food.
In terms of product registration, currently, the law requires the Brazilian company that is importing the pet food to register it with the Brazilian Ministry of Agriculture and Livestock (MAPA). Exporters have raised concerns about this practice, on the grounds that it could compromise confidential information, and MAPA is said to be working on an update to the legislation that will make the exporter responsible for registration.
