Nestle has a new target group in India: your dog

New business.
New business.
Image: Reuters/Denis Balibouse
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One of the world’s largest food companies is now looking at pet food to expand in India.

Swiss consumer goods major Nestle S.A has set up Purina PetCare—its pet food business—in India, making it the company’s first such move to tap the growing population of pets in Asia’s third-largest economy.

This is the first time in its over 100-year presence in the country that Nestle has set up a separate company to run a business vertical here. The existing Indian subsidiary, listed on the bourses, has an annual revenue of Rs9,223 crore. Some of its marquee brands include Maggi and Kit Kat.

Purina will start by selling premium dog food brand, Supercoat, here. ”There is an increasing awareness about pet nutrition largely driven by increasing digitisation making it easier to gain knowledge and owing to the great efforts by leading veterinarians across the country,” the company said in a statement announcing the launch.

Currently, at 19 million, India’s pet ownership is expected to double in the next five years as more urban households afford pet care, according to company estimates. At between Rs1,500 crore and Rs2,000 crore, the pet food market is a small but growing one, dominated by companies selling premium products and packaged dog food.

“Increased focus on pet nutrition and health has boosted sales growth for pet care,” market research provider Euromonitor said in a June 2017 report. The growth is especially strong for “premium-priced brands (that) are registering value growth from a loyal consumer base who are particularly concerned about pet care and have the financial means to back this up.”

Purina will compete with companies such as Mars and Royal Canin, which dominate the pet food market that operates mostly through specialised stores and e-commerce. In 2015, Mars Inc, which sells the Pedigree brand of pet food in the country, said it will double its capacity and launch a new brand, besides adding more cities to its retail network. To expand its reach, Mars also launched lower pack sizes priced at Rs20 for 100gm.

Nestle’s move is part of its global drive to diversify its business. In India, it has relaunched its milk drink, Milo, besides flooding the market with new variants of its instant noodles. The Swiss company’s global mandate is to focus on healthcare, such as supplements, and its pet care business amid shifting consumer demand for such products.