Transcript TO VIEW GREGORY WATINE`S PRESENTATION

IVPD Congress
04/05/2009
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Objective
2
What % of Sales in your practise comes from Retail?
4%
8%
21%
38%
60%
50% - 59%
40% - 49%
30% - 39%
29%
20% - 29%
For 58% of vet clinics, retail constitutes more than 40%
of their revenues
Vet Med Retail Survey – Dec 2009
3
The South African Pet food Market
A – Pet Population
B. ... Important potential
on nutritional market
 7 million dogs
 1.5 million cats
Total calories needs
Total dry petfood
247, 000 T
Health Nutritional dry :
17000T
SPT
42000 T
4
 Dog and  Cat
Calorie Conversion
Comparison:
Calorie Conversion
W. Europe
= Calories from
Prepared Petfood
as % of
Total Calorie
Requirement
of Pet Population
 Catalyst
57
S Africa
41
21
5
67
Calorie Conversion correlates to Income per Head
Calorie Conversion
100
%
 Dog
90
 Cat
UK
Developed
Markets
80
70
France
USA
60
Germany
50
Brazil
40
UAE
30
Kuwait
KSA
S Afr
20
10
Poland
Turkey
India
0
 Catalyst
GDP/head
(nominal)
in $
0
10000
20000
30000
6
40000
50000
60000
Only 18% of households own a Dog in SA
% Owners of dogs or cats (2005)
and spend circa R110 per month
60%
Hungary
USA
50%
Romania
New Zealand
40%
Latvia
Kazakhstan
Belgium
Lithuania
Estonia
Poland
Slovenia
Canada
Bulgaria
30%
Netherlands
Portugal
Ukraine
Chile
Croatia
Argentina
Ireland
Italy
Australia
France
United Kingdom
Austria
Switzerland
Czech Republic
Slovakia
Brazil
Thailand
Spain
Finland
Mexico
20%
South Africa
Philippines
Japan
Greece
Germany
Russia
Colombia
Venezuela
10%
Taiwan
Malaysia
South Korea
Morocco
Hong Kong
Singapore
Turkey
Vietnam Indonesia China
Costa Rica
Lebanon
Egypt
India
Peru
0%
0
5000
10000
Saudi Arabia
Kuwait
15000
UAE
20000
25000
7
30000
35000
GDP/head
in $ (at PPP)
40000
45000
Summary
• The South African Pet Food market is emerging
• Pet ownership should increase with GDP per capita
• Responsible pet ownership increases $ spent/pet
• Opportunity for the veterinary profession to accelerate
the market potential
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The South African Pet food Market Specifics
B – Numerical Distribution
A – Market by Channels
• Vet Clinics: 700
Total dry Value market share (%)
• Vet Shop: 150
• Pet Shops: +/-250
10%
25%
Vet/Breeder
Total Value market share (%)
Supermarkets
Coops/POS
15%
65%
Nutritional Health
Premium
15%
70%
9
Standard/Eco
What’s new in the South African Pet Food Business (1)
• For the 1st time in 2008, Grocery grew
faster vs Specialised Trade.
+27% in Grocery vs +17% in SPT
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What’s new in the South African Pet Food Business (2)
• Premiumisation of the Grocery Channel
(products)
-8%
Cat Food Sales - Vet Market - in Tones
5000
4000
3000
2000
1000
0
2003
2004
2005
2006
11
2007
2008
What’s new in the South African Pet Food Business (3)
• Premiumisation of the Grocery Channel
(Service)
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What’s new in the South African Pet Food Business (4)
• Retail Price increase in all channel
+/- R 23.5/kg
+/- R 22.75/kg
+/- R 27.5/kg
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The Specialised Trade will need to change too!
Vets Petfood Retail relies for >50% on “Premium”
products
Vet Food Sales Mix - 2008
40%
Mainstream Vet
Health Nutrition
60%
But their “premium” product market is at risk…
14
Analysis of the Value Chain differences: SPT vs Grocery
Grocery
SPT
RRP VAT excl: 150 ZAR
Vet average Markup: 35%
The
Solution?:
RRP: 117 ZAR
Retail Markup: 17%
WRP: 111 ZAR
Distribution Costs:
15%
WRP: 100 ZAR
Distribution Costs: 6%
WRP: 94 ZAR
COGS: 97 ZAR
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Key Success Factor: Differentiation
Differentiation in Products: Health Nutrition
The right precise nutritional answer for the specific nutritional
requirements of each dogs and cats
Differentiation in Service: Advice, Expertise, Merchandising…
16
7
Differentiation according to the consumer expectations
CONSUMER
Nutritional sensitivity
Low
Pre-sold products, Price,
convenience
Grocery
Wet food (canned)
Standard dry
High
PURCHASE PROCESS
PLACE OF PURCHASE
PRODUCT
Pull Business
Advice, service. expertise
Prescribers (Breeders + Vets)
Specialized Distribution
Dry, technical, nutritional food, precise
Push Business
Market Size
Europe : 6 b€
USA : 6.5 b€
Market Size
Europe : 2 b€
USA : 3 b€
Growth Rate : -10% to +5% / year
Growth Rate : +8 to +15% / year
Royal Canin 03/93 : +28,4% / year
Pedigree, Wiskas, Friskies, locals…
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Royal Canin, Eukanuba
Hill’s