While infant formula has been the go-to market for many New Zealand dairy processors in the past decade, James Gu believes there will be more mileage in supplying milk to pets as Chinese birth rates continue to decline.
“The rising costs of bringing up children and an aging population mean pet ownership is becoming the new option to having kids in China for many households. The country has over 100 million pets, yet last year only 10 million babies were born, the lowest number ever,” Gu said.
This has come despite the Government freeing up the restrictive ‘one child’ policy in 2013, and more recently opening it further to allow three children per family.
But a growing level of independence and education among the female workforce, high childcare costs and increasing single-person households are all tipping households more towards pets than children for doting owners.
Last year’s Singles Day ecommerce event recorded cat food as the top selling item on Tmall Global, the Alibaba ecommerce site.
The pet industry sector has enjoyed an average annual growth rate of 8.3% a year for six years.
“And over covid-19, there were a lot of people who wanted to address their loneliness by owning a pet, particularly in single-person households,” he said.
The growth in single-person households in China has matched the interest in pets, with about a third of adults living alone. In particular, the number of singles aged 25-35 living alone has surged in the past decade.
Almost 60% of pet owners are in this age group, and often university educated with high income occupations. Meanwhile, as China ages more rapidly, almost two-thirds of those aged over 65 also live with a pet.
Gu says the company has developed a line of powdered milk formula developed specifically for the different life stages of cats and dogs.
“We did not want to do a ‘one size fits all’,” he said.
“Pets have very different needs at different stages of their life, so we offer eight varieties across different life stages of cats and dogs.
“For example, in the infant stage the tolerance to lactose is higher and the need for calcium for bone development is greater than in an older cat or dog.”
Formulations for older pets are fortified with collagen for joint health and colostrum to boost immune systems.
The company is sourcing NZ goats’ milk and drying it at the Food Waikato specialist spray drying plant in Hamilton. The company’s website empathises the same aspects human infant formula companies use, espousing NZ’s wide open green spaces and the pastoral nature of goat farming.
The similarities also extend to the reasons why PetNZ has chosen goats’ milk as its core ingredient.
“As in humans, goats’ milk is easier for many pets to digest; containing the A2 protein, the lactose component is more easily processed by the pet,” he said.
“Often pets can be tolerant of lactose in cow’s milk up to about 6-8 weeks, then the ability to digest it declines over time.”
Gu says vets may often recommend pets do not receive any milk in their dietary intake, despite them being mammals.
“This often relates to the lactose issue. You can remove lactose from milk, but it is an expensive process to do so, very time-consuming, requiring a fermentation process to remove it,” he said.
He says the acceptance of the milk product in China had been helped by the long history NZ enjoys there as a high-quality producer of dairy products for humans.
In addition, NZ’s expertise at producing high-quality, finely-formulated dairy powders was recognised and respected in Mainland China, giving this country an edge over larger European counterparts.
“And while there are some very large pet food manufacturers globally, the skill level to produce a milk formulation is quite different, and often that experience is absent within those companies,” he said.
With almost 90% of pet products now sold online, Gu says the company is working on distribution through JD.com and Alibaba.
The formal launch in NZ was staged at the GoChina+ Summit earlier this month, sponsored by NZ Trade and Enterprise and Woolworths.
