Uruguay: Small yet Developed Pet Food Market
Thanks to a younger population and high level of pet ownership, Uruguay is a relatively strong pet food market.
The Uruguay pet food market possesses some first-class factors that make it stand out in its region. Like its neighbor Argentina, it is a pet-loving country.
To explain the reasons behind Uruguay's market success, it is necessary to assess some population dynamics, as they play a key role in the development of the industry and influence how Uruguayans pamper their pets.
First, the human population in Uruguay is estimated at 3.5 million people, and 51.5% are women. Also, the country likely has the highest rate of homes with only one person across the region, at nearly 23% of the total households. In terms of age, millennials represent 26% of the total population; yet, if we consider millennials plus gen X together, the proportion goes up to 43.3%.
Considering such figures, we estimate Uruguay has the highest pet ownership rate in South America (only dogs and cats), at around 69% in 2019. As for the pet food market, dogs and cats consume nearly 120,000 tons of pet food per year.
Where are the current pet food market opportunities?
Given the favorable demographic trends in Uruguay, it is likely that some business opportunities lie in the e-commerce arena. As in other markets across the region, online sales are just starting to develop. However, this country has the perfect combination to further grow online sales.
For example, according to the consultancy firm BS LatAm, Uruguay has the highest use of credit cards in the South American region, with a penetration rate of 35.6%, ahead of Argentina, Chile and Brazil.
In this token, the giant Latin American e-commerce site Mercado Libre is likely the market leader in the country, as there is little competition in this segment. Currently, the site offers 250 product varieties of dog food and 30 for cats.
A combination of three elements – a young population, high pet ownership and intensive use of electronic means of payment – can further stimulate the nascent channel of e-commerce sales. For the development of the online market, it is necessary for the surge of new pet food digital outlets to take full advantage of the opportunities this market offers.
One strategy that small and medium-sized pet food manufacturers are pursuing in Latin America is launching their own online stores. Perhaps this could be a first step for the Uruguayan market to find new market niches and stimulate sales.
by Iván Franco