There are around 20 million pets in Spain, with around half of all households providing a home to at least one animal: dogs make up the majority (around 5.4 million) followed by cats (3.8 million).
And this pet population is rising hand in hand with the sector that is growing to meet their needs – last year it was worth around €2.2 billion, and it is increasing at around three percent annually.
Banfield, owned by the Mars Group, is the world’s largest chain of animal care products, with some 900 veterinary centers and shops in the United States. In Spain, where it has a turnover of €200 million, it is the second-biggest seller, after Spanish multinational Affinity. The third is Nestlé.
In Spain we spend €1,100 a year per pet, while in the UK that figure is €2,500, and in the US, €3,500” José Luis Blázquez, Openvet
The trend in Spain is toward the integration of services and products. “This is a response to changing ideas about pets,” says Aly Meyers, the head of Mars Spain. “Twenty years ago in Spain, the majority of dogs were used for guarding premises. Today, they are part of the family, there are more of them than cats, and spending on both in Spain is beginning to move toward that of the leading economies of Europe.”
Spanish households spent just over €1 billion on pet food last year, €896 million of it on products for cats and dogs. “The sale of dry food is shifting in favor of tinned food, which has more added value, in the same way that dry foods are increasingly made from organic products,” says Meyers.
In a bid to capture a share of this growing market, supermarkets are now producing their own, low-cost pet foods. “Dog and cat foods have grown much more than any other item in the household shopping basket,” says Cristina Rojo, head of customer services for pet food products at market research firm Nielsen. “It is now one of the top 15 products. The big stores sell around half of all pet food bought in Spain.”
Twenty years ago in Spain, the majority of dogs were used for guarding premises. Today, they are part of the family” Aly Meyers, Mars Spain
Spain’s 4,000 animal care shops and 6,000 vets selling pet food are increasingly under pressure from online sellers. They are suffering from the competition posed by chains that can compete in terms of price due to their economies of scale. “I saw the business opportunity as a buying center for the smaller shops six years ago,” says Elisa Reyna, the owner of pet product distributor Petuky. “I have grown by 40 percent a year, and now turn over €5.8 million. I have 1,000 clients and want to reach all the small shops.”
Competition is tough, and the big chains have big services offering more services. Kiwoko is the biggest in Spain, with 55 shops, each with a surface area of between 500 and 1,000 square meters, located in shopping malls. “We grew by 50 percent and in 2015 turnover will pass €40 million,” says Kiwoko head Álvaro Gutiérrez. “We are investing our profits in opening new shops, one a month in the last two years, and a total of 18 for 2015. We provide all kinds of services and aim to be the Spanish equivalent of [sportswear chain] Decathlon for animals.”
Openvet has similar hopes of capturing a bigger share of this lucrative market. Its store franchises have an area where dogs and cats can be looked after for short periods, and the company also has 24-hour veterinary treatment centers. “We’re headed toward consolidation, because Spain has the highest number of pet centers in the developed world, and it just isn’t viable,” says company chief José Luis Blázquez. “Only 18 percent of Spanish veterinary centers turn over €450,000 a year. The Spanish market is still underdeveloped in terms of the number of animals and spending. We spend €1,100 a year per pet, while in the United Kingdom that figure is €2,500, and in the United States, €3,500.”
Spain’s leading department store, El Corte Inglés, also plans to carve itself a share of Spain’s pet-care market over the coming two years. “We will be opening a department in our Princesa branch in Madrid,” says an El Corte Inglés spokeswoman. “It will consist of around 300 square meters that will include a vet and kennel area that will encourage people to adopt abandoned animals. We will sell insurance, food and all kinds of accessories and other products.” The chain says it aims to offer a wide range of products, “that are normally only to be found in specialist shops. We will also employ experts to advise customers.”