Several new projects have been rolled out in the Eastern European pet food space, likely signaling that despite economic turbulence, the region is still perceived as a promising direction for investments.
The acquisition of Pupil Foods by China's WH Group in July 2025 serves as a clear indication of how foreign players strategically view Eastern Europe as a key production base, as highlighted by Nandini Roy Choudhury, senior client partner, Food & Beverage, Future Market Insights, in an interview with Petfood Industry.
WH Group described the acquisition as a key step in the strategy of Morliny Foods, its European branch, "aimed at diversification of its portfolio and strengthening the presence in the dynamically growing pet food market in Europe."
The deal is just a recent example of vigorous investment activity in the pet food industry of Eastern Europe and some countries of Central Europe, Choudhury said.
Hungary has seen sustained commitments from Nestlé Purina, which invested €141 million (US$153 million) in expanding its Bük facility in 2024, bringing capacity to nearly 500,000 tonnes annually, with most of the output exported to Western Europe.
"Romania has also attracted significant activity," Choudhury said. "United Petfood announced a €35 million (US$38 million) second plant at Răcari in 2025, reflecting Southeast Europe's growing role in pet food production In the Baltics, Ukraine's Kormotech broke ground on a €60 million (US$65 million) wet-food factory in Lithuania in 2025, backed by EBRD financing, with phased expansions planned through 2028."
There are a lot of movements in the pet space in the region, mainly acquisitions, but also capacity developments, Péter Tamási, CEO of PetPartners Hungary, a pet company, told Petfood Industry.
"United Petfood is very active in our region, they buy new facilities as well as develop capacities in their existing factories in Poland and Romania," Tamási added. "They also increase capacity and develop the technology in their plant in Hungary that they bought from Cargill a few years ago."
Local players expand reach
Smaller local players are also making significant strides with new initiatives in the region's pet food industry.
Local producers such as Poland's Zew Natury are expanding to serve export markets, while Czech manufacturer VAFO acquired Polish distributor AZAN in 2025 to strengthen its regional presence, according to Choudhury.
"In the Baltics, Akvatera (KIKA Group) is building a new high-tech wet food facility, but another Lithuanian company, Kauno Grudai, is also working on extending its pet food production capacities," Tamási said.
On the financial side, private equity interest remains evident, Choudhury said, with CVC Capital Partners acquiring a majority stake in Partner in Pet Food in 2024 to support accelerated European growth.
Region offers growth opportunities
Despite high energy costs and rising labor expenses, Eastern Europe has largely maintained its attractiveness for investors.
"Taken together, these developments show that despite macroeconomic uncertainty, the region remains an attractive destination for both strategic and financial investors," Choudhury said.
Several factors contribute to this appeal. Central and Eastern Europe provides manufacturers with access to the European single market while maintaining lower operating costs compared with Western Europe, Choudhury said. The private-label segment is expanding rapidly, with large European retailers sourcing from the region due to its scale, quality standards, and cost advantages.
The regulatory environment is also favorable for new projects in the pet food production sector.
"Hungary, for example, has actively supported large-scale foreign investments, including Nestlé Purina's expansions, through favorable incentives," Choudhury said.
Poland's strong poultry and pork industries generate abundant animal by-products that can be efficiently channeled into pet food production, strengthening vertical integration, according to Choudhury.
"Local demand is also rising as pet ownership and spending increase across Central and Eastern Europe markets," Choudhury said.
Despite economic ups and downs, the pet food industry in Eastern Europe holds significant untapped potential, a fact that companies and investors are clearly recognizing for long-term growth.
"Companies and investors are obviously thinking long term, and I believe, despite the current economic downturn, they still consider this region a higher growth opportunity than Western Europe," Tamási said. "Even if there is a slowdown at the moment, the pet space is still very much developing in these countries, considering lower calorific coverage as a growth opportunity, and premiumization as still the main driver."
