Potential of the Pet Food Industry in Indonesia

Alta Mahandara

Industry Growth

The Pet economy industry in Indonesia has experienced growth due to changes in human behavior during the lockdown period during the Covid-19 pandemic. This pandemic has made people start developing new hobbies, one of which is adopting pets. This is because these activities can be done at home so that the relationship between the owner and the pet becomes closer. Data from LandX in 2021 shows that 47% of respondents keep cats and 10% of respondents keep dogs in their homes. 

Even before the pandemic occurred, based on the results of an online survey conducted by Rakuten Insight in 2018, which involved around 97 thousand respondents from 12 Asian countries, which are China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Philippines, Singapore, Thailand , Taiwan and Vietnam, it is known that Indonesia occupies the first position with residents who have pets cats. The fact that Indonesia is in the first position with the most cat pets in Asia may be due to Indonesia being a country with the largest Muslim majority population in the world so that the cat population in this country is much larger than the dog population. 

The magnitude of these figures certainly have a significant impact on the pet economy industry in Indonesia. Of all the service categories of the pet care industry in Indonesia, pet food dominates the market share. The pet food market in Indonesia is a market that is currently growing rapidly, especially the cat food industry. The level of purchases of pet food seems to always be increasing, there was a decrease in the volume of purchases at the beginning of the pandemic. However, purchase volume increased by 17% or 932.2 million kg during 2021. Pet owners are estimated to spend around 1 million per month to buy pet food, and currently pet food in Indonesia is dominated by well-known foreign brands including:

• Royal Canin
  Royal Canin is a company originating from France that produces dog and cat food. This company was founded by a veterinarian named Jean Cathary in 1968. This brand of dog and cat food belongs to the premium class and is well-known throughout the world. In 2020, Royal Canin is optimistically targeting sales growth of 15% based on their research, which shows that there are 21.6 million pet cats in Indonesia, of which 50% are still not consuming pet food.
• Whiskas
  Whiskas is a company that has been producing cat food since 1958. Whiskas is not only committed to continuing the development of quality cat food so that every cat can be healthy and happy. In the digital world, Whiskas is the most popular food for cat food, as the digital index for popularity in 2020 places the Whiskas brand at 32.43%.

• Proplan
  Proplan is a cat and dog food company that is known for its premium quality and price. Proplan in Indonesia is produced by PT Nestle Indonesia, and this pet food brand has many variants for cats and dogs.

Rizal Azhar, Director of Pet n Pop, stated that over the past few years, people’s interest in keeping pets, especially cats and dogs, seems to be increasing. The trend of keeping animals has been steadily increasing since 2021. This has led to the pet shop industry in Indonesia also experiencing an increase in sales and purchases. Growth is  quite promising, which can be proven based on research conducted by iPrice Insight, as during the pandemic, the level of sales of animal needs, especially food, increased by up to 116%. This research is supported by survey data from Jet Commerce, which revealed a 503% increase in the pet food category on several e-commerce platforms during the same time period. 

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Pet Food with Halal Certification?

Recently, a cat food product from Malaysia, namely Power Cat, submitted a registration for halal certification to the Institute for the Assessment of Food, Drugs and Cosmetics of the Indonesian Ulema Council (LPPOM MUI). Because LPPOM MUI considers cat food products to have a halal critical point, this application was accepted and successfully obtained halal certification after an investigation.

The success of cat food products in obtaining halal certification led to two points of view: 1) those who believe that halal certification for pet food is necessary, especially for Muslim animal lovers, and 2) those who believe halal certification for pet food is excessive.

The following are the main reasons why pet food requires halal certification according to those who hold this view:

1. Some pet owners feed their pets using their bare hands, allowing the pet food to come into direct contact with the feeder’s skin. If the product contains unclean (najis) materials, particularly heavily unclean (najis berat) materials, the feeder’s hands may become contaminated.
2. Most companies producing cat food claim that the products they produce come from selected fresh fish, which is included in the non-critical ingredients or positive list. However, in the manufacturing process, fresh fish is mixed with additional ingredients, such as vitamins, animal protein, amino acids, and so on. The issue is that the protein and amino acid content in this pet food can come from land animals, so the animal must be halal and slaughtered in accordance with sharia law. Meanwhile, vitamins are synthesized from microbial, vegetable or synthetic materials. If the vitamins are of microbial origin, care must be taken to ensure that the growth medium is free from unclean elements. This is done to ensure that the contents of the pet food are pure or free of impurities that could contaminate the feeder’s hands.
3. Many pet foods come in large packages that do not run out once, they must be kept cold. Because pet owners rarely have a separate refrigerator for storing pet food, pet food is usually stored with the pet owner’s food. Apart from this, many pet owners are concerned that their food will be contaminated by unclean/unclean objects from pet food stored next to each other, so halal certification is an effort by  cat food manufacturers to mitigate this concern.

The pet food manufacturer’s decision to apply for halal certification is one of the preventive measures designed to keep Muslims from coming into contact with items or eating food that is tainted by uncleanness. Pet food producers will actually benefit more in this case because pet owners, especially Muslims, will no longer have concerns about the “halal” pet food they will purchase.

 

Regulations Related to Pet Food in Indonesia

According to Law No. 18 of 2009, concerning Animal Husbandry and Animal Health jo. Law No. 14 of 2014 concerning Amendments to Law No. 18 of 2009, concerning Animal Husbandry and Animal Health, feed is defined as “single or mixed food ingredients, both processed and unprocessed, which are given to animals for survival, production and reproduction.” Feed ingredients are defined as “products from agriculture, fishery, animal husbandry or other materials suitable for use as feed, both processed and unprocessed.”

The standards for making pet food based on the abovementioned law are as follows:

1. Producers must avoid the use of raw materials that contain hazardous substances, or are contaminated, or suspected of containing pathogenic microorganisms.
2. Producers should heat or dry pet food  in a manner that has sufficient efficacy to remove micro-organisms that may be present in pet food derived from raw materials or the like.
3. Propylene glycol should not be used in cat food.

Moreover, such law prohibits the distribution of pet food that:

1. Is unlabeled;
2. Is expired;
3. Has damaged packaging, is physically damaged, smells, has changed color; and/or;
4. Is counterfeit, that is, does not have a registration number, has contents that do not match the label, or which uses someone else’s brand.

Further, the main driver of the pet food market is the humanization of pets, which means that pets are considered and treated as humans and family members. Whether we realize it or not, the wheels of the country’s economy are turning thanks to human love for animals, especially their pets, whether home businesses or  Small and Medium Enterprises (UMKM) or large producers, such as pet food companies.  Although consumer loyalty drives competition in the pet food market, businesses also benefit from marketing and continuous innovation in the pet food industry. Companies in the pet food industry continue to invest in new product launches and innovate to gain a competitive advantage over competitors.

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