ธ รก จอาหารส าหร บส ตว เล ยงของไทยและโภชนว ทยาการส ตว เล ยง. Beynen, A.C. 1,#

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1 บทความว ชาการ ส ตวแพทย มหานครสาร JOURNAL OF MAHANAKORN VETERINARY MEDICINE Available online: ธ รก จอาหารส าหร บส ตว เล ยงของไทยและโภชนว ทยาการส ตว เล ยง Beynen, A.C. 1,# 1 Vobra Special Petfoods, Veghel, ประเทศเนเธอร แลนด บทค ดย อ: การเต บโตของตลาดอาหารส าหร บส ตว เล ยงของประเทศไทยเป นไปอย างรวดเร ว ซ งเป นแรงกระต น เศรษฐก จของประเทศไทยผ านธ รก จอาหารส าหร บส ตว เล ยง ในป จจ บ นส ตว เล ยงท เล ยงด วยอาหารส าเร จร ปม ส ดส วนเพ มข นเร อยๆ ตลอดจนการเล ยงส น ขและแมวก ม แนวโน มมากข นด วย อาหารส าหร บส ตว เล ยงท จ าหน ายในประเทศไทยส วนใหญ ผล ตภายในประเทศไทย ในขณะเด ยวก นก ม การผล ตเพ อส งออกเน องจาก ประเทศไทยม ศ กยภาพในการผล ตมากกว าความต องการภายในประเทศ ส งผลให ผ ผล ตอาหารส าหร บส ตว เล ยงของไทยม อนาคตท สดใสส าหร บการขยายตลาดท งในและต างประเทศ ซ งการขยายต วของธ รก จอาหาร ส าหร บส ตว เล ยงมากข นเร อยๆ น จ าเป นต องน าหล กว ชาการทางโภชนาการของส ตว เล ยงมาประย กต ใช ควบค ไปด วยอย างแนบแน น ธ รก จอาหารส าหร บส ตว เล ยงของไทยต องพ ฒนาปร บส นค าอาหารโดยค าน งถ งประเด น ป ญหาท ส าค ญ ค อ ความแตกต างของส นค าในตลาด แนวโน มหร อท ศทางของโภชนาการ ความร ความก าวหน า ทางว ทยาการ และการลดลงของว ตถ ด บท ใช เป นประจ า นอกจากน ย งควรพ จารณาถ งการให ความร แก เจ าของ ส ตว เล ยงและความปลอดภ ยด านอาหาร ด งน นในสายงานธ รก จอาหารส าหร บส ตว เล ยงควรเพ มท มงานท ม ความเช ยวชาญด านโภชนาการส ตว เล ยงเพ อลดประเด นป ญหาด งกล าวข างต น และร กษาระด บการเต บโตของ ตลาดอาหารส าหร บส ตว เล ยง สถาบ นการศ กษาของไทยท ม การเร ยนการสอนทางด านการส ตวแพทย และ การเกษตรจ งควรส งเสร มการเร ยนร เก ยวก บโภชนาการส ตว เล ยงและสน บสน นการว จ ยในขอบข ายท เก ยวข อง ค าส าค ญ: อาหาร ส น ข แมว ธ รก จ แนวโน ม การศ กษา ประเทศไทย # ผ ร บผ ดชอบบทความ ส ตวแพทย มหานครสาร (2): address: beynen@freeler.nl

2 Thai Petfood Industry and Pet Nutrition Science Beynen, A.C. 1,# Vobra Special Petfoods, Veghel, The Netherlands Abstract: The Thai petfood market is among the fastest growing markets in the world. The encouraging outlook on Thailand s economy stimulates petfood sales. The percentage of pets fed on commercially prepared food will be increasing. An additional factor is the rising number of dogs and cats. Most petfood on the Thai market is produced domestically. The amount of petfood exported by Thailand-based manufacturers is much greater than the size of the local market. Given the growth of local, regional and global markets, perspectives for the Thai petfood manufacturers are bright. It is suggested that further growth of Thai petfood business requires an intimate alliance with pet nutrition science. The petfood industry has to develop products in the light of issues such as market differentiation, nutrition trends, scientific progress and shrinking inventories of common ingredients. Other points to be addressed are education of pet owners and control of food safety. To face the various themes and to maintain growth, the Thai petfood industry should increasingly team up with experts in pet nutrition. To meet the need of experts, veterinary and agricultural schools at Thai universities should enhance education in pet nutrition and facilitate research in this domain. Keywords: Food, Dog, Cat, Industry, Trend, Education, Thailand # Corresponding author J. Mahanakorn Vet. Med (2): address: beynen@freeler.nl Introduction Petfood business in Thailand is growing rapidly and will become more significant for employment and economy. More workers will be employed by petfood activities, both directly and indirectly. The growth of local sales value will increase mass and differentiation of retail distribution. Expansion of the Thai petfood market goes hand in hand with an increase in local petfood manufacture. The export of petfood by Thailand, which is greater than local sales, will gather more volume. Thus, the 104

3 petfood industry becomes increasingly important for the Thai agricultural sector. This paper addresses the relationship between petfood industry and pet nutrition science. It is advanced that the expected strong growth of the petfood industry in Thailand should be supported by experts in pet nutrition. The need of experts requires the promotion of pet nutrition science at Thai universities. Thai petfood market Thailand ranks number four on the list with fastest growing dog and cat food markets in the world (Taylor, 2011). Until 2015, predicted annual amount of growth is on average 8.3% and sales volume will reach US$ 456 million. The estimated number of dogs in Thailand in 2004 was 6.90 million (MapXL Inc., 2013), the number of cats being about half (Keomahakarl, 2007). For comparison, France had 8.15 million dogs in 2004 and until 2015 the dog and cat food market is anticipated to grow annually by on average 1.6% at a volume of US$ million (Taylor, 2011; MapXL Inc., 2013). Thailand has more rural and stray dogs that are not going to contribute to the petfood market, but the comparison with France points at a huge potential for petfood sales. This is further substantiated by the assessment that the numbers of dogs and cats in Thailand are still growing and that only about 10% of total dog or cat food consumption consists of industrially prepared products (Keomahakarl, 2007). About 50% of the Thai dog and cat food market, when expressed as value of retail selling price, is in the hands of three players: Effem Foods Thailand, Nestlé Purina Pet Care and Charoen Pokphand Group (Keomahakarl, 2007). The major dog food brands are Pedigree and Alpo from Effem and Nestlé Purina, respectively. Charoen Pokphand Foods brings dog food brands such as CP, A-Pro, Smart Heart and Big Boss. Although growing rapidly, the market share of private label brands is still small (Keomahakarl, 2007). About 95% of the petfoods on the Thai market is produced locally (Keomahakarl, 2007). Effem, which falls under the Mars Inc. multinational concern, produces petfood in Pakchong, Nakonratchasima. Nestlé Purina Pet Care (Nestlé SA) has a petfood plant in Amata City, Rayong and Perfect Companion Co. Ltd. (Charoen Pokphand Group) manufactures petfoods in Kaengkhoi, Saraburi. Major imported brands are Eukanuba and Iams from P&G Pet Care (Procter & Gamble Co.), but the contribution of imported petfood to the Thai market is only about 5% (Keomahakarl, 2007). A small segment of imported foods is taken by the veterinary therapeutic diets from Royal Canin (Mars 105

4 Inc.) and Hill s Pet Nutrition (Colgate- Palmolive Co.). The Thai import regulations for petfood are very strict, relating to the BSE-free status of the country. Imported petfoods must be free of ingredients of ruminant origin. The petfood market in terms of retail selling value is about four times larger for dog than for cat food (Keomahakarl, 2007). Petfoods may be categorized according to form such as dry, extruded foods or wet, canned foods. Dry foods contain about 10% water and generally are rich in starchcontaining ingredients. Canned foods contain about 80% of water and are mainly based on animal materials. For dogs foods on the Thai market, the percentages of dry and wet products, as based on the retail sales, are about 80 and 15% and for cat foods they are 60 and 40% (Keomahakarl, 2007). The petfood market for dogs includes about 5% as treats (Keomahakarl, 2007). Petfood sales go thorough different outlets. In Thailand, about 50% of the retail selling value is sold by pet shops, 40% by supermarkets and 5% by veterinary clinics (Keomahakarl, 2007). The fraction of pet shop sales is somewhat greater for dog food, whereas supermarkets sell a higher percentage of cat food (Keomahakarl, 2007). More than half of the national petfood spending through the veterinary channel takes place in Bangkok (Keomahakarl, 2007). Market developments The main driving factor for growth of the petfood market in Thailand is its economy. The overall economic prospect is propitious (International Monetary Fund, 2012). More spending ability will cause a steady move from the use of table scraps to industrially produced convenience foods with health claims. Furthermore, the increase in pet ownership (Keomahakarl, 2007) most likely is among the population segment that is able and willing to buy commercial petfood. During the next phase, as the market matures and sales flatten, distinct segments may arise with economic and superpremium foods on the extreme ends of the scale. By then, most receptive consumers have already been drawn to high-end petfoods. Economic petfoods are reasonably priced while meeting the nutritional requirements of dogs and cats. Premium and superpremium foods are more expensive and generally bear health claims as based on the addition of special (functional) ingredients. Within the premium foods there is differentiation by targeting on age and breed of pets. There are life-stage products for growing, adult or senior animals. There also are all-breed and breed-specific foods. In a maturing market, the share of veterinary, therapeutic diets will grow. Below, the 106

5 various types of petfoods are described in more detail. Petfood export The Thai petfood industry relies heavily on export. The USA dog and cat food market is the largest in the world, accounting for over one third of the global sales of about US$ 55 billion at retail. For the USA market, Thailand is the second source for import (Anonymous, 2011). The landed cost of the total USA import of dog and cat food is about US$ 480 million/year, which equals about US$ 2,400 million of retail value. Thailand has an USA import market share of 25% (Anonymous, 2011) and the size of the local Thai petfood market is US$ 456 million at retail (Taylor, 2011). It follows that Thai export to the USA is about 30% larger than the total local market. Canned food and treats are the major export constituents. Clearly, Thailand also exports petfood to countries other than the USA. For the Canadian market, Thailand is the third source for import (Agriculture and Agri-Food Canada, International Markets Bureau, 2011). Thailand only contributes 1% to total petfood import into Canada, but the volume seems to go up rapidly (Agriculture and Agri- Food Canada, International Markets Bureau, 2011). In the not too distant future, the growing petfood markets in (South-East) Asia may become increasingly important for the petfood industry in Thailand. The BSE-free status of Thailand and its nearby location, implying low transportation costs, provide significant advantages. Certainly, the experienced Thai petfood manufacturing operations are in a favorable position for times to come. In the future, the USA may remain an important export destination for petfood produced in Thailand. Despite the economic turndown in the USA, the petfood market in this country maintains respectable retail value gains (Taylor, 2011). Pet owners are not cutting back as petfood reinforced itself as an essential item for consumers (Taylor, 2010a). The market is saturated in terms of pet ownership and the percentage of pets consuming commercially prepared food. Continuous differentiation and premiumization are driving growth in the well-established USA market. The ongoing development of enhanced petfoods creates further market segmentation with pet health as the focus. In addition, nutrition trends and the development of coupling products drive USA market growth. Nutrition trends are discussed below. Types of petfood Dogs and cats can be fed industrially produced, complete diets that are considered suitable for all phases during 107

6 their life. Legally, complete foods without further qualification must provide for all the energetic and nutritional needs for all life stages. Thus, a given dog may be fed such a complete food from the puppy into the senior phase. Complete foods are typically found in the economy segment. Food differentiation towards various types and degrees of animal individuality is a continuous trend in pet nutrition. Examples of individualization are the availability of lifestage and breed-specific foods. Life-stage nutrition for dogs and cats is justified by scientific data on age-dependent nutrient requirements and risk of disease. Dogs of different breeds, but of identical age, can have different nutrient requirements or different sensitivity to the negative effect of high intakes of certain nutrients. Breed also is a predisposing factor for the development of nutrition-related diseases. With adequate knowledge of the breed differences it is possible to formulate either all-breed or breed-specific, life-stage diets that promote optimum health. However, current knowledge on special nutritional characteristics, if any, of many breeds of dogs is absent or at the most scarce. Generally, the lines of all-breed, lifestage foods also comprise adult foods with special functional claims such as intestinal health, joint support, urinary-tract care, skin and coat condition, weight control, immunity 108 and behavior benefits. Functional petfoods are assumed to be more than a vehicle for a balanced block of nutrients. These petfoods generally contain so-called nutraceuticals or functional ingredients that provide health and medical benefits, including the prevention and treatment of diseases. In the mature, saturated markets, where competition among petfoods is fierce, functional petfoods are still on the rise. The more expensive premium or superpremium petfoods with functional claims drive sales growth in saturated markets and they reflect a key trend that follows the humanization of petfoods. The wide availability of breed-specific and functional life-stage foods illustrates the individualization in pet nutrition. The functional foods rub against the veterinary (therapeutic, dietetic) diets, which represent another form of individual feeding that is based on the diagnosis of disease. Veterinary diets represent a very small portion of the petfood market, but they are of great importance to veterinarians as adjuvant to management of a wide variety of disease conditions. Veterinary therapeutic or medical foods are generally intended as sole source of nutrition to animals with specific medical conditions. The foods have a composition that is adapted to the specific medical condition and should be used under the direction of a veterinarian.

7 Natural trend In relation to petfood marketing, different types of trends may be distinguished. The trends of humanization, differentiation and individualization have been described briefly above. These trends have been initiated by the petfood industry. Another example of a nutrition trend changing buying behavior is the pet owners interest in so-called natural foods. The natural trend has been inspired by consumers. During recent years, sales in the USA of natural petfoods have surpassed that of petfoods overall (Taylor, 2010b). This also holds for organic and holistic foods which account for a much smaller share of the market. At this moment, the claim natural is most commonly used and is still on the increase (Taylor, 2011). Natural is the buzzword that strongly determines the preference of the petfood buyer in the USA. In the slipstream of the claim natural, the recommendations of organic and holistic follow. Owners of dogs and cats associate natural with health. In contrast to other claims on petfoods, the claim natural does not need further explanation. Back to nature is easily understood and it is appealing to people. Amongst others, natural nutrition is translated into grain-free foods. Following the USA, Western Europe experiences an increasing interest in grain-free dog foods. The trend is based on emotional and incorrect arguments. It is said that grains do not have nutritional value and are bad for pet health. It is also said that grains do not to fit into the natural diet of dogs, that digestion and metabolism of dogs cannot handle the starch in grains and that dogs are carnivores and thus are no grain eaters. Well meant, but misleading online messages continue to fan the trend, which has evolved into a true hype. As stated, the natural trend is based on misconceptions. There are no scientific arguments and experimental data against the presence of heat-treated grains in dog food. The notion that dogs are pure carnivores is wrong also. Both grain-containing and grain-free foods can be adequate nutrition for dogs, provided that the foods meet the nutrient requirements and are palatable and safe. Manufacturers of dry petfoods should have a suitable answer to the trend of grain free. The sales representatives should have factual knowledge to support their products that by certain owners are not perceived as natural. Possibly, grain-free products will not become more than a lucrative niche product. Nevertheless, manufacturers should consider an extension of the existing dry food assortment with grain-free products. This could involve products in which grains have been replaced by other starch-rich 109

8 ingredients such as potato or cassava. In this way, market demand would be met. In reply to the natural trend, some manufacturers simply label their dry foods as natural. Others are now using fresh meat as one of the ingredients for dry foods. From a nutritional point of view it is possible to feed dogs on foods with a wide diversity of ingredient compositions, including grain-rich and grain-free diets. Petfood manufacturers should detect latent, but oncoming demands in the market. Possibly, the trend of grain free slips into carbohydrate free and a new niche can be carved out in the petfood market. A proactive manufacturer should develop the production of a carbohydrate-free dry food. If not already operational, it may be decided to produce extruded dry foods with the use of fresh meat as ingredient, or rather meat slurry injected at extrusion. On the waves of the natural trend, pet owners will drive sustainability in petfood. Manufacturers are now considering how consumers may define green petfoods (Phillips-Donaldson, 2010). The subsequent challenge is how to convert the consumer demand into food products. Taken together, petfood manufacturers must deal adequately with nutrition trends. They should be able to justify their current products, either fitting the trend or not. Consumers are going online for information on feeding their pets (Phillips-Donaldson, ). The internet has become an invaluable information source, but some of it is patently false. Petfood manufacturers should face customers openly and provide transparency and evidence-based information as to their products. Premature trends should be picked up by manufacturers and be transformed into compatible and sound petfoods. To deal with trends optimally, manufacturers should have employees trained in pet nutrition science. Petfood palatability Palatability and acceptability are keys in petfood production. An unpalatable food will be rejected by the pet and subsequently by the owner. Thus, there will be no continuation purchase of the brand concerned. Pet owners like to see their pet eat and enjoy the food offered, whereas trifling leads to buying another brand. Palatability is not an indicator of the food s adequacy in terms of level and balance of nutrients. However, any unpalatable food will have low marketing value. Consequently, petfood manufacturers aim at launching highly palatable foods on the market. Production of highly palatable foods and maintaining and improving palatability is a continuous challenge for nutritionists and product engineers. Senses of smell and taste provide different information to dogs and

9 cats as is provided to humans. Without preference and acceptance testing, the palatability of a given petfood cannot be determined. In the development process of new petfoods both functionality and palatability are crucial. Ideally, both aspects are developed and evaluated in a sciencebased manner. The contribution of scientists with expertise in pet nutrition is valuable. Petfood safety Bad publicity can ruin a petfood brand and so can empty shelves in the shop due to impaired arrivals. In both cases, pet owners shift to another brand and will be reluctant to return to the previous one. The combination of bad publicity and empty shelves occurs with a recall due to a calamity. The petfood industry is no stranger to tainted and recalled products. The largest petfood recall in history has resulted from a single ingredient, wheat gluten, which was intentionally adulterated with melamine for economic gains. Enticed by a bargain price, the petfood manufacturer had switched suppliers of wheat gluten. Numerous cases of acute renal failure in dogs and cats were caused by a variety of petfood products contaminated with melamine and cyanuric acid (Osborne et al., 2008). Calamities cannot be excluded, but petfood manufacturers should do their utmost to fortify the weak links in the supply chain. The suppliers certificates of analysis, including safety criteria, should be scrutinized and own testing might be required. Audits of suppliers by third-party companies cannot invariably guarantee that the products were made under good manufacturing practice (GMP). The audits may be supplemented by own inspections. Petfood manufacturers should be ensured that foreign suppliers comply with the regulations that are operative in the area of their market. For growth and maintenance of the Thai petfood industry, the risk of calamities must be put down to the absolute minimum. To this end, the input of experts in pet nutrition science will be helpful. Alternative ingredients Ingredient inventories for the petfood industry are under stress (Collins, 2011). With the increasing ingredient prices, permanent review of formulations is necessary to control ingredient cost while maintaining nutritional profile, diet efficacy and brand image. In order to control ingredient cost, petfood manufacturers have to search for uncommon, alternative ingredients. Introduction of such ingredients requires prior testing. To raise sales opportunities, it is necessary to develop new formulations with substantiated health claims. To reduce overall cost, efficiency refinement of the 111

10 production process is essential. To sustain delivery and to avoid calamities, safety and quality control of ingredients and end products require careful attention. Needless to say that for growth and maintenance of the Thai petfood industry the input of experts in pet nutrition science is indispensable. Alliance between industry and science Ideally, booming of the Thai petfood market and production is attended by an increase in pet nutrition experts. To furnish these experts, training programs in animal nutrition should offer specialization in pet nutrition. Courses on pet nutrition should be organized for active nutritionists that wish to further specialize in pet nutrition. The curriculum of veterinary students should involve classes on pet nutrition and dietetics. For veterinary practitioners, postgraduate courses on pet nutrition should be developed. Major topics of the courses should be interpretation of petfood labels and claims and the role of nutrition in health and disease of dogs and cats. Universities should facilitate scientific research in pet nutrition. As to petfood business, the future winners will be those Thai petfood manufacturing companies now making good profit and using this for innovation, research and development. For profit generation it is 112 crucial to combine elements such as engaged employees, knowledge, creativity, cost control as to formulations and production, outstanding customer service, loyalty, speedy settlement of current and oncoming matters, proactive stand towards customers, production and delivery, continuous development of new products at rapid rate and early detection of slumbering nutrition trends and market threats. The essential mix of elements should be enriched by the appointment of employees trained in pet nutrition science. References Agriculture and Agri-Food Canada, International Markets Bureau Consumer trends: Pet food in Canada. Anonymous US petfood import and export trends. Petfood Industry. June: Collins, G Dominoes falling in petfood ingredient market. Petfood Industry. July: International Monetary Fund Thailand Article IV Report. Keomahakarl P Influence factors on pet food brands mostly recommended by veterinarians in Thailand. Master thesis. School of Management, Shinawatra University. MapXL, Inc. US Office (cited December 2013). Countries with most pet dog

11 population - world top ten. Available from: world-top-ten/countries-with-most-pet -dog-population.html. Osborne, C.A,, Lulich, J.P., Ulrich, L.K., Koehler, L.A., Albasan, H., Sauer, L. and Schubert, G Melamine and cyanuric acidinduced crystalluria, uroliths and nephrotoxicity in dogs and cats. Vet. Clin. Small Anim. Pract. 39: Phillips-Donaldson, D Don t fear the consumer. Petfood Industry. October: 6. Phillips-Donaldson, D Survey: Consumers drive sustainability in petfood. Petfood Industry. June: Taylor, J. 2010a. Mid-year global petfood sales trends. Petfood Industry. July: Taylor, J. 2010b. Market update: Natural and organic petfood. Petfood Industry. September: Taylor J Update: The global petfood market for Petfood Industry. July:

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