Applications: Latest Russia and world news – Kommersant Money (140455)

Applications: Latest Russia and world news – Kommersant Money (140455)

In the pet industry, shortages of imported products due to veterinary restrictions during the crisis were exacerbated by broken supply chains and payment difficulties. Domestic producers have been negatively affected by rising prices for materials and ingredients. As a result, only animal feed has risen in price by an average of 30% over the year and there is still no prospect of a trend change.

According to Rosstat, pet food remains one of the leaders in terms of price increases in the non-food product group. In April alone, average dry food prices rose by 7.2%. And in annual terms, the product has risen in price by an average of 26%, to 281 rubles. per unit. Some cat litter has more than doubled in price.

The increase in consumer activity in the category of pet products occurred in early March, according to Tinkoff Data. In annual terms, expenditures in this category increased by 2.5 times and expenditures from month to month increased by 11%, the average control increased by 60%. According to Mpstats, on online platforms, a package of dog food, which cost 1.7 thousand rubles in the winter, rose in March to 2.27 thousand rubles. Buyers rushed to reserve for fear of disappearing well-known brands from the shelves, Animal Welfare explains. In May, demand stabilized: according to Tinkoff Data, spending in the category of pet products in Russia is 5% lower than last year.

President of the National Association of Pet Industry Kirill Dmitriev recalls that in 2021 Rosselkhoznadzor imposed a ban on imports of products from a number of western countries into the country, which negatively affected the assortment, mainly in the professional, dietary and segments. medicinal food for pets. This affected price dynamics. The current crisis has exacerbated the situation by breaking supply chains and making payments more difficult. The increase in the key rate of the Central Bank led to a sharp increase in the cost of loans. Meanwhile, the need for working capital has increased. Foreign food suppliers switched to 100% prepayment and networks pay for late goods.

According to industry interlocutors, pet food producers operating in Russia are approximately 80% stocked with local raw materials, most of the imported ingredients are used in premium lines. In addition to rising prices for imported production components, there is also an increase in the cost of animal packaging. According to Mr. Dmitriev, some local food suppliers may continue to raise prices in this regard. In the current situation, according to him, there are still no prospects for a change of trend.

The increase in prices for pet products is accompanied by a decrease in the percentage of discounts. According to NielsenIQ, during the noise period, the share of promo sales in the cat food segment decreased by 47%, and dog food was almost halved. The share of discounts in the pet treatments segment dropped significantly – almost four times, to 12%, analysts say. As NielsenIQ believes, in the midst of the economic crisis, a decline in buyers’ disposable income could have a significant impact on the animal care model. Analysts, in particular, predict a further shift towards online shopping, an increase in demand for products from a lower priced segment, and the purchase of large packages that enable greater gains per kilogram. In addition, a portion of buyers may switch to their own large-chain brands, which so far remain on average twice as cheap as well-known brand goods, NielsenIQ predicts. They note the growing interest of buyers for the products of small and domestic manufacturers. Thus, over the past year, total sales of household products from domestic producers increased by 24.3%, and in the channel for specialists – by 50% immediately, while demand for imported products increased by 12.8%. In the Beethoven chain, for example, in mid-May, several Russian brands were introduced into the assortment immediately, which should offset the withdrawal of some foreign manufacturers from the market.

Anatoli Kostyrev

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