It all started with one pet shop…

From strength to strength

“We started as far back as 1975, when Vatroslav Varda opened one of the first pet shops in the former Yugoslavia,” explains Edvard Varda. The company became involved in wholesale distribution in 1994, when it partnered with Hill’s Pet Nutrition. A year later, it entered into a partnership with German company Tetra.

Further growth took place in 2006, when a subsidiary was set up in Belgrade and product distribution began to other former Yugoslavian countries. In 2011, it acquired the 25-branch ZOOCITY retail chain and has continued to grow steadily ever since. By 2017, the company had a turnover of €23 million ($27 million).

Wholesale trading has flourished and resulted in a portfolio of over twenty specialised suppliers. In many cases, as the exclusive distributor for Croatia and Serbia – or the entire region.

“We have expanded our veterinary medicine distribution and are now the official distributor of Bayer and Zoetis. Aiming to be a market leader in frozen products too, we began distributing for UK frozen food producer Natures Menu in 2014,” Varda says.

Right prices and employees

Varda: “We have doubled the company’s size over the past four years. This is a combination of many small improvements and a strong focus on employees. Our promise to customers is to make pet care as easy as possible. We do that with a mix of consultative sales, a good range of products and correct pricing.”

He believes business growth will continue: 35% in Slovenia, 25% in Croatia and 55% in Serbia for 2021. On the retail side, the Croatian ZOOCITY chain is expecting to be up 16%.

Regional markets

According to Varda, current total market sizes range from €145 million ($172 million) in Croatia, €95 million ($112 million) in Slovenia, to €65 million ($77 million) in Serbia.

“Pet parents clearly want to nurture their pets with natural, healthy foods, supplements or treats, and intelligent toys. Slovenia is premium driven, with the well-being of people and pets very much integrated. Croatia is a few years behind, but you see the same trends. Serbia is non-EU, so has import barriers with regard to vet products, certificates and customs tariffs,” comments Varda.

“All three markets are growing by 12-16% per year and this will be sustained over the next few years. There is a great opportunity to bring volume from supermarkets, drug and cosmetic stores to the speciality trade. As consumers move upmarket, we have an opportunity to serve them with better and more specialised products to care for their pets.”

New product ranges

Although more products inspired by human trends are entering the pet market, such as pet food containing goji berries or pomegranate, they are not yet popular in this region.

“Today’s sweet spot is ‘entry-level’ natural products like grain-free, but at affordable price ranges. That is an area where we are looking to expand.”

When it comes to private label, investing in own brand development would not be sensible right now, because of relatively limited volumes. Instead, Varda works with a number of ‘controlled’ brands similar to private labels. The company has, for example, long- standing collaborations with brands like Interquell (Happy Dog/Cat), Champion Pet Foods (Orijen/ Acana) and Fressnapf for food products, plus Trixie for accessories.

Key to success

Finding the right partner with local market insights and a good network increases the likeliness of success:

“In all three countries, we distribute directly to over 1,200 pet stores and veterinary clinics. There are no sub-distributors or wholesalers. We have over twenty sales reps visiting customers and this gives a competitive edge. It is more expensive to coordinate and more complex, but does enable us to build sustainable growth and brands. That is not something you achieve with pricing or marketing communications,” Varda says.

Exciting ideas

Besides building his management team and optimising some internal processes, Varda is excited about piloting new store concepts – testing format and size as well as product ranges – to fine-tune their offering and better meet the needs of their customers.

 

(Photo credit: Marko Mrkonjic)