Investors pounce on India's pet care industry with $77 million in investments

The realm of pets has experienced a remarkable transformation in India, exemplifying the deep bond people share with their animal companions. India’s pet population, estimated at around 32 million, is steadily expanding at an annual rate of 11 percent. Capitalizing on this surge in pet ownership, 70 new pet care companies have emerged over the past two years, according to the Decipher report.

As people increasingly invest in pet care products and services, the appetite among investors for this burgeoning sector is also on the rise. Between 2021 and 2022, the industry attracted investments totaling $77 million, as reported by Venture Intelligence. Notably, L Catterton, a global player in pet food investments, has ventured into the Indian pet food market with a record-breaking $60 million investment in Drools.

Shashank Sinha, CEO of Drools Pet Food said, “We were the first Indian brand to make inroads into the category which was crowded by Western brands and imported products. The investment has brought a lot of credibility to the brand and the business that has been built. The investment will go into building better capabilities, infrastructure, warehousing, supply chains, international expansions and into categories to reduce the knowledge gap.”

A profound shift has swept across our society, reshaping how we perceive and cherish our animal companions. Pets have transcended their traditional roles as domestic animals and have rightfully assumed positions as cherished members of our families. This transformative shift has not gone unnoticed in the dynamic realm of commerce, leading to significant growth and diversification within the pet care industry. Currently, the pet food segment commands the largest share of the market, followed by pet accessories, grooming, and healthcare.

“Currently the entire pet industry is around Rs 6,500 crore of which 65 percent is pet food. Pet food will become a billion-dollar business within three years alone. We have currently three running facilities and will start another in the next three months. Our total capacity is 7,800 tons and we’re selling close to 5,600 tons per month now,” Sinha said.

Drools, in particular, dominate approximately 38 percent of the pet food market in terms of volume and around 17 percent in terms of value. The company is now setting its sights on the premium segment to bridge the gap between volume and value.

Sinha said, “One of the challenges we face as a brand is that pet food is more expensive than human food. So, 90 percent of our raw materials are sourced in-house. If you look at our product range lines it is from mass economy to premium segment as well, from Rs 125 per kg to Rs 700 per kg. So that every strata of the customer can afford and use the balanced and right quality nutrients from Drools portfolio. Now we’re getting our products in the premium segment because the customers are getting used to a more premium line of categories not only in FMCG buses but in the pet industry as well.”

In the fiscal year 2023, Drools achieved a revenue of Rs 500 crore, with expectations to reach the Rs 700-750 crore mark in the current fiscal year.

“This year again we are looking at robust growth of 40-45 percent. The significant growth is coming from tier-II and tier-III cities where pet ownership is growing. Bhubaneswar, Patna, Guwahati, and Surat are seeing tremendous growth,” Sinha said.

India stands as one of the world’s fastest-growing pet care markets, with Drools forecasting an annual market growth rate of approximately 20 percent over the next five years, projecting it to reach over $1.2 billion by 2028. Although pet ownership is still relatively low, with only 10 percent of Indian households having a pet, the emerging trends suggest ample room for growth in both homes and hearts.