#tbt: Ukraine’s pet food industry booming before conflict
Unrest in recent years has taken a toll on country’s economy
In 2013, Petfood Industry reported that Ukraine was actively developing the export of pet food to the markets of CIS (Commonwealth of Independent States) and Eastern Europe.
At the time, about 10% of all pet food produced by local manufacturers was exported to other countries. This figure was projected to double until 2015 after the development of new export opportunities in the region. In 2012, Ukraine exported about 2,500 tons of pet food-a record number for the country.
Fast-forward to 2015, and a lot has changed in Ukraine as a result of the Russian annexation of Crimea and warfare in the east regions of the country. The overall volume of pet food sales in Ukraine decreased in 2014 due to the fall of the population’s purchasing power; the situation in the zone of Anti-Terrorist Operations (ATO) is much worse, as product supplies have been largely reduced and nearly 30% of all pet shops have closed.
According to AR-Group, in 2014 Ukraine decreased imports of pet food by 7.2% in natural terms and increased them by 12% in monetary terms, to 69,410 metric tons of the total value – UAH 1.033 billion (US$47.1 million). The main factor contributing to this trend was the devaluation of hryvnia, Ukraine’s currency, which increased the price of imported products in the domestic market. The main importers of pet food to Ukraine in 2014 were Hungary (36%), Russia (24%), France (12%), Poland (8.1%) and the US (5.3%), according to AR-Group data.
Despite the fall of sales in 2014, AR-Group said Ukraine’s CAGR (compound annual growth rate) for the past four years is estimated at 13.6%, causing experts to continue considering Ukraine’s pet food market to be steadily growing.
According to Euromonitor International, established petfood markets in the US, Japan, Brazil and the UK continue to rule with their retail dominance, but newcomers like Russia, Italy and India are lining up for their very own share from the global petfood bowl.