Russian pet food producers expand despite market turmoil

Amid the loss of imported pet food brands in Russia and increasing abandonment of pets, local producers are expanding pet food production and sales.

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While Russians are abandoning pets and revising their budgets downward, local pet food companies are ramping up production to fill the gap left after Western brands’ departure from Russia. 

On September 21, 2022, Russian President Vladimir Putin declared the first large-scale troop mobilization in the country since World War II. The Russian Defense Ministry said 300,000 men would be called up to the Russian army, though several independent news outlets reported this figure could be as high as 1 million. 

The decision prompted from 700,000 to 1 million Russians – primarily men of conscription age – to flee from the country in less than two weeks after the announcement, the Russian edition of Forbes estimated, adding that Russian citizens are massively deserting their pets, resulting in overcrowding of pet shelters. 

The problem has even attracted the attention of Russian lawmakers. Vladimir Burmatov, head of the State Duma ecological and environmental protection committee, called on regional authorities across the country to compensate pet shelters for the costs associated with keeping pets of conscripts or those who have gone abroad. 

Pet food market is suffering 

It is yet to be seen how the mobilization will impact the Russian pet food market. In a May 2022 report, NielsenIQ said the economic crisis triggered by Western sanctions imposed on Russia over the Ukraine invasion affected consumer behavior of a large share of Russian pet owners. Most customers switched to less expensive pet food and started seeking better deals by buying larger packs through online stores. 

In addition, Russians showed increased interest in private label brands and local manufacturers, NielsenIQ said. 

The average price of pet food on the Russian market has increased by 15% to 60% since the beginning of 2022, the Russian newspaper Kommersant reported, citing market participants. The growth is primarily attributed to narrowing supply, owing to the mass departure of foreign companies and expensive logistics for delivering goods to Russia.  

Import replacement in action 

Against this background, several Russian pet food companies have experienced a rise in demand for their products. Krasnoyarsk-based Goldman Group, for one, said Western sanctions wiped out a large share of imported specialized and holistic pet food from the Russian market, while the few options that remained seemed unaffordable for most Russian customers. 

Goldman Group has taken advantage of this market situation, being one of a few Russian companies specializing in holistic and superpremium pet food production. 

“The February events [the Russian invasion of Ukraine on February 24] clearly impacted sales. In March, we already recorded a four-fold rise in demand [for our products] compared to the previous month,” Goldman Group said, adding that such substantial growth in sales prompted the company to expand capacities. “In August, our sales exceeded the February level 14 times.”

At the same time, Kirill Dmitriev, president of the Russia Union of Zoo Industry, said the withdrawal of imported brands paved the way for Russian brands to expand their sales. Quite a few new pet food plants have been launched in the country recently, though most of them focus on low-budget and standard segments, and attention must be paid to product quality. 

Some attempts to produce premium and superpremium pet food are happening in Russia, but it would be wrong to say they have replaced similar imports, Dmitriev said.

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