Covid-19 crisis spells boom in pet food across Asia
BANGKOK, NNA - The surge in food delivery and scramble for face masks are two of the more obvious trends that emerged during lockdowns to contain the spread of the deadly coronavirus.
If you're not a pet lover, you might not realize that there was also a mad rush for pet food all over the world during the past months at stores as well as online.
Coping with the sharp rise in demand from global, Asian and domestic markets are leading producers from Thailand such as Thai Union Pcl. (TU), Asian Seafoods Coldstorage Pcl. (Asian Sea) and PP Prime Pcl.
Asian Sea, which manufactures premium pet food Monchou, saw sales of its packaged meals for cats, dogs and fish jumped 40 percent to 863 million baht ($27.6 million) in the second quarter of this year.
This helped push overall company revenue up by 1.7 percent to 2 billion baht in the April-July period compared to Q2 last year. Gross profit shot up 133.6 percent to 378 million baht, the company reported during a teleconference with the media on Sept. 9.
Pet food products including canned, pouch and cups contributed 42 percent of total sales. Frozen food for preparation accounted for 32 percent of sales, with aquafeed and cooked tuna contributing 16 percent and 10 percent respectively.
Booming sales in recent years were catering to the growth in the pet industry with rising incomes in Asia.
Indeed more households are now keeping pets today, noted Akamon Prasoppolsujarit, chief financial officer of Asian Sea.
In some countries, pet adoption also increased as people saw the importance in animal companionship to ward off the gloom and boredom of home confinement.
NNA checks with local pet adoption organizations and rescue foundations such as Worldwide Veterinary Services Thailand confirmed that adoption had increased during Thailand's lockdown.
Sub-head: PP Prime feeds the surge
Reporting its filing to Thailand Stock Exchange in August, PP Prime said its Q2 pet food sales went up 50.62 percent quarter on quarter to 63.59 million baht. It also became the main contributor to the company's overall growth for the second quarter.
As the Covid-19 situation improved and lockdown measures were relaxed in the second quarter, the domestic market became active again, the company said.
Worried about uncertainties in supply and reducing frequent trips out of their homes, animal lovers bought in bulk at retail and wholesale outlets, it added.
Global demand for ambient seafood drove Thai Union's Q2 earnings to a record high, after sales went up by 16.8 percent in Q2. This segment also contributed 50 percent to its total pet food sales.
Thai Union, a global seafood conglomerate, saw total revenue rise 2.6 percent to 33 billion baht in Q2. Its pet care products generated 5.1 billion baht in sales, which represented 15 percent of the collective total for the Thai market and exports overseas, a Thai Union spokesman told NNA.
Its pet food line, Pet Care, enjoyed a 12.7 increase in sales which hit 5.1 billion baht, according to the company’s teleconference with the media in August.
Riding on the surge in demand for pet food, Asian Sea will seize opportunities to grow two segments, its spokesman told NNA.
One is its supply of animal pellet food to other producers in Thailand. The other is expanding production of pet food at its factories in Thailand and China where it operates Shandong Thaiya Meisi Pet Foods Co.
The plan is to increase the production of its two pet food brands, Hajiko and Monchou, the Asian Sea spokesman added. Monchou caters to both dogs and cats, while the company’s newest brand Hajiko is for dogs only for now.
Meanwhile, industry players are keeping a positive outlook for the rest of the year.
DBS Vickers Securities expects Asian Sea to increase its 2020 profit by 43 percent, bringing the total to 702.8 million baht. Pet food will make the main contribution of 10 percent to its total revenue, it said.
“The Asian export market and Southeast Asia have a higher growth trend especially the big markets like China and Japan,” said PP Prime, which expects exports to increase further in the third quarter.