Expansion of pet food markets in Ukraine and Belarus

Ukrainian trends

“During the lockdown, the number of pets here increased significantly,” says Ihor Blystiv, GCMO of Ukraine’s largest pet food producer Kormotech, adding that this is in line with the global trend of rising demand for four-legged pets. “In the first six months of 2021, the Ukrainian market showed 14.5% growth in volume and 24% in value compared to the same period in 2020. For our company, business this year grew by 25.1% in volume and 43.7% in value compared to the same period last year.”

The growth in monetary terms appears to be stronger due to rising average prices for pet food. In addition, Ukrainians are increasingly opting for more expensive pet food, and the COVID-19 pandemic has accelerated this trend.

Going premium

“There are approximately 2.5 million dogs and 7.5 million cats in Ukraine,” says the country’s analytical agency Ukraine-Invest. “In 2001-2002, the economy pet food segment accounted for an 80% market share, while premium and super-premium had 15% and 5% shares respectively. Today, things have changed dramatically, with the premium and super-premium segments now jointly accounting for a 45% share of the market,” Ukraine-Invest adds. Officially, overall annual sales of pet food for carnivorous diets in Ukraine stand at 100,000 tonnes or $300 million (€254 million). But unofficially, sales are believed to be around 250,000 tonnes per year, according to Ukraine-Invest.

Eastern European leader in e-commerce

In 2020, Ukraine’s overall e-commerce sales jumped 41% to $3.97 billion (€3.36 billion) – the strongest rise in an Eastern European country, according to research conducted by Soul Partners, Baker Tilly Ukraine and Aequo. Ukrainians have also begun to buy more pet food online. Pet food sales in the online channel nearly doubled last year. 

“COVID-19 definitely spurred e-commerce in Ukraine,” Blystiv says, adding that the increase in domestic sales still lags behind the growth in export for Kormotech.

“Sales in Ukraine increased by more than a third, and exports almost doubled. During the pandemic, we were able to sign contracts with Spain, Malta, Italy, Norway, Jordan, and Germany,” he adds.

Ups and downs in Belarus

Belarus has been experiencing quite similar trends, but the country was impacted by its continuing political turbulence. During the past two years, the EU and the US imposed several rounds of sectoral sanctions against Belarus. While not hitting pet food supplies directly, they raised a lot of concerns among pet owners.

“Despite the economic sanctions, foreign pet food brands are still available in the country,” says a source in the market who does not wish to be named. “But in October 2020 and July 2021, there were a lot of fears that some pet food might be subjected to sanctions one way or another – either by our government or by other countries – and customers were rushing to stock up.”

Belarus imports almost all its pet food from the EU. The economic sanctions caused a slump in the Belarusian ruble’s exchange rate against the euro, driving up the prices for all imported brands. “Despite that, overall sales did increase during the past year, at least in Minsk, but only slightly,” the source adds.

Pressure groups

Foreign businesses are experiencing other pressure in Belarus too. Just recently, Nestlé was urged by human rights campaigners to stop its advertising, including ads for its Purina brand, on Belarusian state TV channels, which allegedly supported state propaganda and the violation of human rights during recent protests.