In order to meet the rising potential, Purina, the subsidiary of Nestlé, intends to make more investments in capacities. According to the Swiss company, its pet division sees “a lot of opportunities in Asia, and more specifically in China.”
At the Consumer Analyst Group of New York (CAGNY) conference, François-Xavier Roger, CFO of Nestlé, assumes the region shows “a large opportunity”. “More and more younger people [have] small dogs or cats in their apartment, and they’re very digital savvy, which can help us a lot,” he added.
“We are investing, we already have an industrial base there, but these are really territories where we invest with significant ambitions going forward,” Roger continued. He acknowleged the company’s “relatively low position” in China and Asia so far.
The CEO of Nestlé explained that the company cannot meet the actual demand. That is why, Purina aims to make investments of CHF3 billion (€3B/$3.21B) in production sites in China, Thailand and Brazil, accompanied by with “very large investments” in the USA.
Since the population of pets steadily rises 2 to 3% per year, the CEO predicts an “extremely positive” outlook regarding the organic growth.
Especially in emerging countries, the potential of growth is strong driven by the pet owners new preferences to feed commercial food. Across the past 10 years, one could witness a growth of the proceeded food consumption by 7%. He added: “1% for emerging markets means $1 billion (€942.7M) of additional market value.”
Purina Petcare concentrates on e-commerce since this accounts foraround one-forth of all sales according to Roger.
“We expect to continue investing and increasing our participation to that growth driver,” he said.
According to CEO and President of Purina North America, Nina Leigh Krueger, Purina aims to increase its online sales to 30% by 2025.