Partnerships drive success of this Portuguese retailer

Last year, Ornimundo added 5 new stores to its existing portfolio, bringing the total number to 32 stores and 3 vet centers. This includes smaller, mall outlets, but also larger stores measuring 800 sqm (8,600 sq. foot). Its biggest expansion in 1 year was the acquisition of a player with 9 stores, back in 2018. In terms of turnover, the brand now goes head-to-head with the country’s other leading brand, Pet Outlet.

The Ornimundo Group, which includes Ornimundo and its wholesale business ProPet, is expected to grow by an impressive 17% this year.

Portuguese passion for pets

Currently, the grocery market has a 60% share of the Portuguese pet market, while the specialist channel represents 40% of pet product sales. The overall market is growing at an average rate of 5%, but specialist pet stores are growing faster than that.

“In Portugal, we have around 4.9 million pet owners. That’s 50% of all Portuguese households. Dogs and cats are the most popular – while cats and smaller dogs are growing in popularity, the fact being that more people live in cities,” according to Jorge Moura.

“Being Latin, Portuguese people have a strong emotional connection with their pets. Regardless of how much money you have, you do what you can for your pet. As a result, the average ticket is increasing every year. But Portuguese owners are also price sensitive. They, quite rightly, demand high quality for what they’re paying.”

Pandemic challenges

During the peak of the pandemic, pet shops in Portugal remained open. But people were understandably afraid to go out. Online sales of wet and dry pet food exploded as a result. And as COVID-19 spread, so did hygiene products. In-store pickup points were hastily created in all shops.

“The past 18 months have been truly challenging,” said Jorge. “We’ve got through COVID, but we now have a supply crisis. Thank goodness we’re able to work with our 20 supply partners in ProPet. Stock coming in from China is proving very challenging to manage. You don’t know when it will arrive, and the freight costs have multiplied by almost 6.”

ProPet partnerships

A few years after Ornimundo’s start as a retail store, Moura senior added a wholesale arm to the business: ProPet. The distribution company grew from strength to strength, and now works with 20 brands and 24 employees – overall, the Group has 230 employees. Distributing to both specialized pet stores and grocery stores, ProPet has 500 customers and is one of the biggest wholesale distributors in Portugal. The products sold by ProPet are also available in Ornimundo stores.

Jorge values the partnership he has with his suppliers in the industry – many of which have lasted for more than 16 years. These strong partnerships are what has helped the company a lot during the pandemic.

There are other benefits too: “I like partnerships because that is where you also see innovation,” he said. “Retail is driven by the consumer, but in wholesale it is the brands themselves that come up with innovative ideas.”

Unexpected opportunities

There are plenty of opportunities in the Portuguese market for the Ornimundo Group to grow. Jorge aims to continue its double-digit growth in revenue in the coming years and to pass the €35 million ($40M) mark.

While Jorge sees ways for Ornimundo to increase its number of stores in Portugal to more than 50, he’s also looking at Portugal’s neighbor to grow ProPet. The Spanish pet market is up to 6 times larger than the Portuguese.

During the pandemic, another interesting opportunity presented itself. ProPet supermarket customers came knocking on the door: “What this supply crisis has done, is give us the chance to manufacture and sell our own beds and cushions at ProPet. I don’t expect the China situation to improve until August, so this has allowed us to introduce our own private label brand, manufactured in Portugal.”

Online innovation

Jorge would like to achieve 10% of the company’s revenue from sales on Ornimundo’s website. Since its redevelopment in 2017, the website has had a strong presence. The customer can now use it both for purchases and to make grooming and clinic appointments.

But Jorge admits that more needs to be done. He wants a business intelligence platform to help staff make more targeted and timely decisions. Artificial Intelligence is another area he’s looking into, which could enable the company to predict its customers’ needs and wants – and then provide them. A digital team is currently creating sophisticated stock optimization software.

What about sustainability?

Going green is something Ornimundo did long ago. They’ve been accredited with quality certification, ISO-9001, and environmental certification, ISO-14001, since 2007. But sustainability isn’t huge in Portugal. And as Portugal isn’t the wealthiest country in Europe, it’s still not a top priority for many consumers.

Ornimundo does have corners in their stores for natural and grain-free foods and eco-friendly products, because it is a growing trend. But the biggest sellers at Ornimundo, in volume, continue to be regular wet food and snacks.

And the next generation?

Despite having always worked in the pet industry, Jorge didn’t join the family business again full time until 5 years ago – when his father retired. With his background of having worked at different pet food companies, it’s safe to say that Jorge is the right person to be running Ornimundo at this moment in time. Will there be another Moura leading the company in the future? Perhaps. But as Jorge says: “The family are the shareholders, but we want the management to be the very best. If that happens to be a family member, perfect. If not, that’s also fine. We have 230 people depending on us. Let’s face it, Ornimundo Group today is about more than just the Moura family.”