Burgeoning Bulgaria

Moderate growth

Based on Focus Economics data, although Bulgaria remains one of the most developing countries of the EU, the third quarter of 2016 showed a small drop in its markets. Still, this drop is due mainly to the slower absorption of EU funds.

Generally, the European Union Programme for 2014-2017 is itself a guarantee of investments and further growth. Nonetheless, political uncertainty may slow down growth rates. The analysts of Focus Economics Consensus Forecast expect GDP to increase by 3.0% in 2017 and 2.9% in 2018.

Unsurprisingly, the pet care market in Bulgaria has reflected the trends evident everywhere in the region.

Humanization

The global trend of humanization has not left Bulgaria untouched. Consumers are looking for healthy and holistic products for their pets, as they are for themselves. Specifically, they are looking for food with healthy, high-quality ingredients that resemble their own diets. Pets are now treated as family members with equal rights, and so their nutrition should be as good as the rest of the family. In this context, industrialized foods are gaining ground as households now have disposable income for their pets’ nutrition. As expected, this trend offers pet food producers a great opportunity for new products closer to the consumer’s needs.

Premiumization

Of course, bearing in mind that Bulgaria is one of the developing countries, the product categories with highest volume-growth are the premium foods. This trend is due both to the general economic development of the country but also to the increase in consumer awareness regarding pet care. This is evident at all levels of pet care, from food producers, to specialized stores and veterinary clinics.

Private label

Yet, when the household’s budget is very tight, it is natural for consumers to seek the best price. Specialty stores are promoting private label products as these are more profitable for them and cheaper for the consumers. The result is that these products occupy the best places in the store and their increased sales are becoming a threat to the producers of economy foods. Despite the fact that private labels do not yet pose a threat to the premium category, this is still a cause for concern among premium food producers.

Discounter retail

Finally, although specialty stores remain the largest distribution channel, there has been significant growth in discounter stores. Although specialty stores had the largest sales in 2016, this was due to the sale of premium and super-premium foods.

Small, independent grocers are struggling as consumers of economy foods have turned to discounter stores, which actually enjoyed the largest sales in economy products in 2016.

Expectations for 2017

Based on Euromonitor International’s information, pet spending is expected to continue to increase in 2017. As mentioned above, pet owners will be more and more careful regarding the quality of their pets’ food and thus the increase in premium foods is expected to continue.

Nonetheless, this trend is going to affect the middle and economy pet food categories. As consumers want to offer their pets the same food quality as they offer themselves, they will be more conscious of pet food ingredients and quality. This trend itself offers a great opportunity for all sector professionals to inform, sensitize and educate the public, and thus upgrade them to the premium and super-premium segments. 

Pet food manufacturers will find that clear labelling of ingredients, healthy ingredients and practical packaging will play an important role in communicating with the end-consumer and will ultimately lead to increased product sales.