A new wave of globalization has hit Latin America: more pets are signaling rising incomes and as a result, growth in the pet care industry. The Economist featured an article that describes the changes in Latin American culture as a result of higher incomes. With more money for basic needs, consumers are looking at pets for their next big purchase.
But, who can really draw the line at food and shelter? The article notes that the industry is, in part, growing from pet-salons, pet grooming, pet accessories, you name it:
In the past five years spending on pet food and knick-knacks has risen by 44%, to $11 billion, according to Euromonitor, a market-research firm, which estimates that Chile has more pet dogs per person than any other country.
Part of the appeal of pets, more specifically the demand for dogs in Latin American countries, is their role as a status symbol. They represent a disposable income that previously did not exist, and so the amount of care for one’s dog translates to symbols of class and wealth. However, with the global economy in almost constant flux, there are two potential roles for the expanding pet care market in emerging countries. The first, and more positive, outcome would be that incomes continue to rise and allow for consistent spending and innovation within the pet care industry. The second result would cause the pet care industry to contract if incomes in the emerging economies decrease. If the latter occurs, the sustainability of the pet care industry might be in jeopardy, as the Pet Food Institute maintains that the cost of inputs for pet food are on the rise and susceptible to market fluctuations.
In addition to depicting higher incomes, acquiring pets is also a sign of people living longer lives, surpassing the point at which their children leave home, and instead seeking other forms of companionship. Furthermore, while developed countries still account for the majority of sales within the pet care industry, growth opportunities abound in Eastern Europe (Russia), Asia Pacific (Japan), and Latin America (Brazil and Mexico).
With several industries suffering from the current economic crisis, perhaps the pet care industry will act as a beacon of hope and prosperity with its continued growth. Or, at the very least, people can feel better by going home to play with their new pets.