The future of pet care: insights from Pet Care Innovation Europe

CIL’s Consumer practice recently attended Pet Care Innovation Europe 2023 in Berlin, engaging with a diverse mix of investors, advisors, and innovative product and service providers. The pet care sector, characterised by its non-cyclical nature, remains resilient amid macroeconomic uncertainty. In this article, Liam McGuinness and Juliane Kaden-Botha outline the five key trends and investment opportunities that stood out at the conference.

1. Evolving consumer behaviours and commercialisation opportunities
Nutrition quality, clean eating and pet supplements emerged as popular topics at the conference. Food companies highlighted the nutritional benefits of their natural, raw and organic offerings, while pet supplements also garnered attention as they gain recognition. This mirrors what we have seen happening with human nutrition for some time.

However, a note of caution was expressed on the excessive humanisation of pets. Striking a balance between owners’ projections of what a pet needs and genuine nutritional requirements is crucial.

Nonetheless, premiumisation and personalisation are clearly on the rise, with pet owners increasingly opting for customised and higher-end options. The market has seen a surge in tailored solutions, such as personalised food, pre-portioned treats, product comparison platforms and pet wearables.

2. Digitisation’s role in industry transformation
From streamlining administrative inefficiencies to delivering fully digital end-to-end experiences tailored to digitally native customers, digitisation is quickly changing the pet care industry. The integration of sensors and intelligent devices allows pet owners to collect data on their pets’ activities, health trends and behaviours, enabling advanced diagnostic tools and informed decision-making for veterinarians.

Telemedicine is also gaining traction, enabling remote consultations between pet owners and veterinarians. Leveraging digitised solutions, companies can develop personalised products and services tailored to individual pets’ needs. Additionally, the rise of direct-to-consumer (D2C) channels is facilitating stronger customer connections and fostering innovation.

3. Enhancing access to quality healthcare
While the UK boasts a well-served and professionalised veterinary services sector, the same cannot be said for Europe as a whole. The region is experiencing a declining number of veterinarians, hampering the availability of timely and adequate care, especially in rural areas. Moreover, consumer expectations are shifting, with pet owners increasingly seeking digital and on-demand solutions. Fragmentation remains high, with corporate ownership accounting for less than 10% of veterinary care.

4. ESG and sustainability driving product innovation
Growing consumer awareness and concerns about ESG factors are fuelling product innovation in the pet care industry. This trend is particularly notable in pet nutrition, with alternative protein sources, such as insect-based and plant-based options, gaining popularity. However, demand for these alternatives remains in its early stages, with cost being a potential barrier. Consumers face a conundrum when choosing pet food, weighing the sustainability benefits against potential higher costs, especially during challenging economic periods.

5. Regulatory disparities affect commercial opportunities
Across Europe the pet care market exhibits significant variations in regulatory environments. These differences encompass licensing and registration processes for pet care businesses, regulations governing ingredients and labelling in pet food, and laws concerning veterinarian remuneration that influence the availability and necessity of pet insurance products. The lack of regulatory uniformity presents challenges for businesses operating across borders and impedes the seamless distribution of European products and services.

To discuss any of our findings in more detail, please reach out to our Consumer practice.