Country report: Georgia – Unlocking new opportunities for market expansion

As a country with just 3.7 million people, Georgia is keen to ride the momentum of the international pet industry and strengthen its own pet sector through exports. From its strategic location between Europe and Asia, it has mainly set its sights on countries in the neighboring European Union.

A growing sector

Just over 1 million people live in Georgia’s capital city, Tbilisi. According to a survey among 1,000 adults carried out by consulting company ACT, 36% of the capital’s population owned at least 1 dog or cat last year. Giorgi Gvasalia, Head of the Pet Food division at Georgian manufacturer Nutrimax, confirms a positive trend in the local pet sector. “Over the past decade, this industry has demonstrated consistent expansion, with annual growth rates ranging from 7% to 10%,” he says.

Boosting exports

A recent program run by Enterprise Georgia, the country’s economic development agency, is aimed at amplifying the export markets of 50 Georgian businesses, including pet food companies. “This groundbreaking scheme connects Georgian producers with competent international buyers by offering customized services and assistance in striking business agreements,” a spokesperson for the government agency tells PETS International.

Nutrimax is one of the participants in this program. It has a production capacity of 2,500 tons and opened a new facility near the capital earlier in the year, specialized in the production of dry pet food and aquaculture. The manufacturer currently exports its products to regional markets, specifically targeting Kazakhstan and Moldova.

As part of the program, the company is now receiving personal assistance “to create effective marketing materials to communicate its story to potential buyers and boost sales in new international markets”. It is hoped that the program will help the pet food producer to generate leads and expand its sales activities in different countries. “We are in the midst of negotiations with several European Union member countries, demonstrating our commitment to expanding our market reach,” says Gvasalia.

Easy access to Europe

The European Commission’s December 2020 decision to allow pet food imports from Georgia was seen as a boost for the local industry. Today, 2 years later, the pet sector is starting to reap the benefits. Although Georgia’s pet food industry is relatively modest in comparison to the vastness of Europe, new market expansion opportunities have been unlocked in this period. “Ease of access to the EU has streamlined export processes, reducing bureaucratic hurdles,” Gvasalia states.

The challenges

The government initiative is also seen by many local players as a good opportunity to build up the industry and depend less on imports. Because of the current heavy reliance on imported goods, the local pet food industry suffers due to the volatility of prices and the poor quality.

“There is a notable influx of low-quality pet food products, exacerbating the challenge of ensuring the availability of high-quality options for pet owners,” explains Gvasalia. He also admits that a lack of awareness about pet health is a prevailing hindrance. “This knowledge gap represents an ongoing obstacle in ensuring the well-being and proper care of pets in the region,” he adds.

Murat Tusder, a local distributor for Turkish producer Çağatay and Georgian brand 4Pets, points out that one of the biggest challenges is the monopolistic nature of the market: “There are importers and resellers working as 1 organization. They solely sell their own brands, and never trade with any other chains or independent stores.” As a result, the sellers are “limited to their own assortment and brands,” he comments.

Optimistic outlook

According to Tornike Elizbarashvili, CEO of pet store chain Zoomart, the pet industry in Georgia lags behind developed countries by approximately 10 years. Despite this, he predicts the emergence of more pet store chains and e-commerce platforms offering pet supplies. “Grocery stores will also expand the assortment of pet supplies on their shelves,” he concludes.

Similarly, Nutrimax expects the Georgian pet industry to grow “gradually” at a rate of between 5 and 10% annually in the coming years. This will mainly be driven by increased public consciousness regarding pet welfare and nutrition, the company believes.