Ukrainian petfood market expects drop in sales
Political crisis, military conflict affect local market
By the end of 2014 Ukraine is likely to reduce the sales of petfood while the local market already lost much of its growth prospects because of the ongoing political crisis and military conflict in the east of the country, according to local experts and market players.
In particular, Ukrainian analytical agency Retail Studio with reference to foreign experts has noted that the market for petfood production in the country in the end of 2013 was considered among the top ten most promising in the world. Average annual growth rate in the period 2009â€“2012 was 15â€“20%. Currently, however, the industry is facing serious challenges. "Indeed, the demand that was showing stable growth over the last five years, around Marchâ€“April this year, dropped, and still remains unstable,” said Anton Greenfeld, manager of Nora Company, local distributor of animal and veterinary products. “Today, many experts predict that this year sales of food for cats and dogs will decrease for the year in general by 10%, mostly due to a fall in purchasing power of the population.”
Currently, the Ukrainian feed market for dogs and cats is 88,000 metric tons. In monetary terms at wholesale prices (import and producers’ prices) its size is US$130 million, while in retail prices it’s about US$240 million, according to official country statics. The market is dominated by international teams of Mars (Pedigree Petfoods, Royal Cannin, Nutro), which occupies 70% of the market, and Nestle (Carnation, Spillers Petfoods, Ralston Purina), with a 15% share of the market.
Representatives of the largest companies in general admit that production probably will fall, but do not consider the situation critical. In particular, according to the spokespersons of Mars in Ukraine, the sales volume is likely to drop in the premium segment of the market, while in the economy segment they may even grow. This is connected primarily with the fall of exchange rate of hrivnia, which increased costs of all imported products in the country.