Portugal: Competition intensifies as the market builds
The expansion of specialized retail beyond major centers, as well as investment in local production boosted by public funding, are key to understanding the driving forces of the Portuguese pet segment.
The pet care market in Portugal is forecast to be worth €717.4 million ($829.5M) in 2026, representing a 5.4% advance on the previous year’s figure of €680.9 million ($787.3M). At the same time the total pet population is expected to rise at a rate of 1.2% to around 5.2 million, according to Euromonitor figures.
M&A, private label and e-commerce
A series of launches, expansions and partnerships resulting from multi-million-euro investments in the sector are helping the industry to consolidate its domestic growth, while simultaneously increase exports both inside and outside the EU.
There have been some significant movements in the Portuguese pet business arena recently, including the acquisition of pet specialty retailer ZU by Musti Group, both part of Sonae, in December 2025. In addition, the brand has launched its own e-commerce platform and entered the private label business.
“We detached our e-commerce from the Continente [the supermarket chain] infrastructure and relaunched the website on a new platform. We expect traditional e-commerce to weigh about 5% at the end of the year and q-commerce to weigh another 5%, putting the total share at roughly 10%,” ZU’s CEO Tobias Azevedo tells PETS International.
Until November 2025, ZU didn’t have its own labels. But between the end of that year and the beginning of 2026, the retailer launched two brands, Pescot and Moggy, offering dry dog food and cat litter respectively.
“The Musti acquisition gave us instant access to a very complete portfolio of own brands across all categories. We have been selectively introducing these throughout ZU stores since the beginning of the year,” explains Azevedo. Currently, the overall inclusion rate is around 4%, with some stores close to double digits in private labels on the assortment.
The company’s goal is to reach double digits across all stores by the end of 2026, especially with wet food under the Pescot label, and a grain-free variant of Musti’s Purenatural brand recently launched in the Nordics.
Opportunities in a crowded market
As the Portuguese pet care market becomes “more crowded”, according to ZU’s CEO, the company sees the greatest whitespace opportunities in southern Portugal, as well as in the urban areas of Porto and Lisbon.
At the end of July, the Portuguese pet retailer acquired nine stores from competitor PetOutlet, a chain operating 30 pet specialty stores across mainland Portugal. The new locations are in the Porto area and in the southern region of Faro, bringing ZU’s total store count to 84.
“There is an extra important fit between the PetOutlet and ZU stores given some similarity between offer and location, which are mostly in shopping centers or galleries with a Continente store,” Azevedo explains, stating that this proximity drives the use of the loyalty scheme Continente Card.
Over the next six months, the stores will be remodeled to reflect ZU’s design and portfolio of exclusive and market brands. By the end of 2026, the chain plans to add six more stores, totaling 25 new units this year. This follows on from 10 other store expansions carried out by ZU since the beginning of the year, highlighting the retailer’s dual growth strategy, combining organic expansion with acquisitions.
Further developments
Another chain expanding in the country is the Spanish- based Kiwoko, which will open two more stores, one in the south and the other in the central region. The chain arrived in Portugal in 2016; 10 years later, it has 42 stores open.
“Our expansion strategy focuses not only on large urban centers, but also on cities where we feel we can make a difference. The upcoming opening in Beja [southern Portugal] reflects precisely this vision,” explains Cristina Soares, Country Manager, Portugal at Kiwoko.
Food producer petMaxi is also growing, but in efficiency and capacity. The company is finalizing an investment of approximately €12 million ($14M) in warehouse capacity and logistics automation using AI.
Furthermore, the construction of a new factory, representing an investment of €30 million ($34M), is scheduled for completion in 2027, according to Head of Marketing and Communication at petMaxi, Helena Gomes. After the whole project is concluded, the company expects a 75% increase in production capacity.
The expansion will be coupled with investment in existing stores to improve omnichannel capabilities, including click-and-collect options.
Kiwoko’s Soares says that the company is noticing a significant growth in specialized pet food, targeting the specific needs of puppies, seniors and sterilized animals, as well as products with health claims. This year, the retailer will invest in increasing its offering of these goods. Kiwoko also highlights positive growth in hygiene-related lines, toys, accessories and enrichment products.
“At the same time, we will continue to invest in our grooming services through Kiwoko Beauty Centers and in veterinary care through Kivet clinics to offer an increasingly comprehensive and integrated response,” Soares adds.
Specialized demand
This shift in consumer preference is not limited to premium or super-premium categories. Gomes notes there is a growing demand for transparency, ingredient origin and nutritional composition information in the economic segment as well.
Partnerships to boost discovery
The pet presence is also expanding to less conventional outlets. From March, pet food has been available through the surplus produce marketplace Too Good To Go for the first time in the country. The app has partnered with Tibi – Pets for Life, a pet shop chain with eight stores in the Algarve.
As the pet market grows, “there is also a growing search for solutions that combine quality, sustainability and affordable prices”, Soraia Fernandes, Business Director at Tibi, says. While the initiative targets customers who are environmentally engaged or trying to contend with financial hardship, it’s also an investment in product discovery, she explains. The offer in the app includes kibble, wet food and snacks in the form of ‘surprise’ bags, with the content varying depending on availability.
Pet food production
Member companies of the Portuguese Association of Compound Animal Feed Manufacturers (IACA) reported that 197,500 tons of pet food were produced in 2025, a 5.5% increase compared to the previous year, according to Secretary General Jaime Piçarra.
Piçarra notes that national production accounts for between 35 and 40% of the market, with the possibility that it will exceed 50% in the short term, but says: “We face challenges and constraints, starting with the VAT on pet food, at 23%, which compromises export capacity and creates competitive disadvantages with direct competitors such as Spain.”
The association advocates for the harmonization of the VAT on pet food with that of feed for livestock production, currently at 6%, or an intermediate rate of 13%. Data from the Eurostat shows total exports of dog and cat food increased by 4.1% year-over-year (YoY) in 2025, to €271.2 million ($308.4M). However, in terms of volume, the growth was only 0.9%, representing 174.5 million kg.
Investing in manufacturing
If ZU anticipates a market with more players over time, 2026’s developments show the extent of this increasing trend across different parts of the industry.
For instance, pet food manufacturer Apura inaugurated a cat and dog food factory in June in the city of Barcelos, in the northwest of Portugal. With an investment of €10 million ($11.3M) in construction and machinery, the facility has a built area of 1,400sq m, with the potential to reach 6,000sq m. The investment was supported by the local authority.
Public funding will also facilitate the installation of another factory in the country, as the Belgian company United Petfood will receive a contractual incentive of €9.8 million ($11.1M) from the Agency for Investment and Foreign Trade of Portugal in an estimated investment of €32.9 million ($37.4M) for construction.
The facility will be located in Rio Maior, between Lisbon and Coimbra, and will focus on the production of dry pet food. The incentive stems from a government effort to increase productive innovation and includes five other projects outside the pet sector.
A market on the move
Portuguese pet owners continue to rise in numbers and, alongside their European counterparts, are becoming more interested in specialized and targeted products. There remains the potential for both local manufacturers and pet store chains to capitalize, and for the wider European market to take an increasing interest, as long as businesses are quick to adapt to a changing retail landscape.
Share this story:
One click prioritizes GlobalPETS in your search results and AI answers.
