The pet-food market in India is on the brink of significant expansion, according to a recent report by Mordor Intelligence. It anticipates growth from ₹7,130 crore in 2024 to a staggering ₹15,685 crore by 2029, marking a remarkable compound annual growth rate (CAGR) exceeding 17%. This contrasts sharply with the United States, where pet expenditure surged to ₹15.43 trillion (approximately $186 billion) in 2023. Clearly, India’s pet market is still in its infancy, with ample room for growth. A noteworthy observation is that Mars Inc., known primarily for its chocolates, generated over 65% of its sales from its pet care segment in 2023, underscoring the lucrative nature of this industry.
The growth in pet ownership in India is poised to further steer sales in the pet-food sector over the coming decade. Various trends are shaping this burgeoning landscape, including:
Key Trends in India’s Pet-Food Market
- Premiumization: There is a clear shift towards high-quality and organic pet-food options, as owners increasingly prioritize their pets’ nutrition and health.
- E-commerce Demand: The rise of digital platforms is making pet food more accessible across India, emerging as a vital driver of market growth.
- Pet Humanization: Paralleling trends in the Western world, Indian pet owners are increasingly treating their pets as family members, leading to greater expenditures on premium and specialized products.
With these trends in mind, let’s explore some of the prominent pet-food stocks in India that stand to gain from this expanding market.
Leading Players in the Indian Pet-Food Market
Nestlé India
Nestlé India is a powerhouse with a market capitalization of ₹2.61 trillion. As a subsidiary of the global consumer food giant, it operates across various product categories, including nutrition and beverages. Recently, Nestlé made a strategic acquisition of Purina Petcare India for ₹125.3 crore, marking its entry into the pet-food sector. Purina is recognized for its premium dog and cat food products, creating opportunities for higher-margin sales.
With an extensive distribution network of over 10,000 distributors, Nestlé aims to enhance brand awareness and market presence. The company’s sales saw phenomenal growth from ₹9,101 crore in 2012-13 to ₹24,394 crore in 2023-24. Even though the pet care segment contributes minimally to overall revenue, its long-term potential could significantly impact the company’s future growth trajectory.
Mankind Pharma
Established in 1995, Mankind Pharma has established itself with a market cap of ₹1.03 trillion. With 25 manufacturing facilities and products sold through 13,000 stockists, Mankind plans to venture into the pet-food business with its recently launched PetStar Dog Food. This move aims to build a comprehensive pet-care ecosystem, providing food, supplements, and grooming products tailored to India’s evolving pet community.
The company’s revenue has increased significantly, from ₹3,918 crore in 2017-18 to ₹9,212 crore in 2023-24. With a notable operating margin of 25%, shares have surged over 85% since their IPO in May 2023.
Emami
Emami Ltd, valued at ₹32,897 crore, is a significant player in the personal-care sector. This year, Emami acquired a 30% stake in Cannis Lupus Services India Pvt. Ltd, a pet-care startup, marking its entry into the pet-food market. Emami aims to launch a line of chemical-free and ayurvedic products for pets, targeting consumers seeking natural alternatives for pet health.
Emami’s sales have experienced steady growth, climbing from ₹1,595 crore in 2012-13 to ₹3,578 crore in 2023-24. This established FMCG player is well-positioned to leverage its brand equity and distribution channels to gain traction in the pet-food sector.
Avanti Feeds
Lastly, Avanti Feeds Ltd, valued at ₹8,487 crore, has made its mark in the aquaculture industry as the leading shrimp feed manufacturer. In 2023, the company announced plans to diversify into pet-food manufacturing and trading, intending to produce various pet care products, including pet foods and health items.
Sales have skyrocketed from ₹626 crore in 2012-13 to ₹5,369 crore in 2023-24. Avanti’s diversified portfolio and intent to tap into the pet-food market signal substantial growth potential for shareholders.
Conclusion
Investing in pet-food stocks can offer a promising opportunity in an industry that tends to be resilient during economic downturns. As seen with grocery essentials, pet owners typically maintain their spending on pet food regardless of economic cycles. The uptrend in pet ownership, rising middle-class incomes, and a willingness to spend on premium products suggest that the future of India’s pet-food market is bright.
While the pet-food segment remains nascent for these companies, there is significant potential for growth. Leveraging international trends, these businesses could enjoy substantial long-term benefits.
Note: The analysis presented here is intended for informational and educational purposes only. If considering investments, consulting with a financial advisor is strongly recommended.
The author has over 15 years of experience in finance and writing, coupled with academic qualifications from Mumbai University and T.A. Pai Management Institute.
Disclosure: The author does not hold stocks in the companies discussed in this article.
