The Russian economy is growing at a rapid pace

The Russian economy is growing at a rapid pace. Great opportunities for growth appear to beckon for the pet supplies sector too in the next few years

With the number of pets in Russia estimated at 35.7 mio, the market potential is enormous. This figure puts the huge Eastern European state at the top of the European league, and Russia is a market with a future in global terms too: with 9.6 mio dogs, it has the fifth biggest dog population in the world after the USA, Brazil, China and Japan. It''s also well out in front of France and Italy, which boast a large number of dog owners. The market research institute Euromonitor International puts the volume of the Russian pet supplies market at RUB 317 mio.. In 2000, sales of pet products in the country accounted for RUB 123 mio. Euromonitor International assumes that the rate of growth in the Russian pet product sector is not going to diminish in the next few years; in fact, it is forecasting that the volume of this market will double every four years. This market data is in line with the trend in overall spending capacity in Russia. Purchasing power in Moscow amounts to RUB 54.3 bn, and at RUB 5238 per capita it is twice as high as for St. Petersburg, although growth in the metropolis on the River Neva is much more vigorous than in the capital.

The rapid development of the Russian economy will please Mars and Nestlé Purina, which have a market share of over 78 per cent in Russia according to Euromonitor International. The principal distribution channel for both companies is the supermarket trade, which accounts for over two-thirds of their total sales of pet products. The market share of the speciality trade, made up entirely of small businesses, is estimated to be around 24 per cent. Large pet superstores are as yet an unknown commodity in Russia. As in other Eastern European countries, the pet supplies business in Russia is concerned primarily with dog and cat food, although many inhabitants of this large country still have to be convinced of the benefits of industrially produced pet food. Most owners feed their dogs and cats on scraps from the table, while food for other types of pets, along with care products and accessories, occupies a fairly lowly position in terms of sales volume. But since the ranks of the super-rich are being swelled continuously in the two main metropolises of Moscow and St. Petersburg, the mood among accessory manufacturers exporting to Russia and also among manufacturers of premium pet food is entirely positive. The neo millionaires are snapping up high-quality, luxury goods enthusiastically.

Apart from Mars and Nestlé Purina, Royal Canin above all has succeeded in gaining market share in Russia in recent years. The company opened a production plant 100 km north of Moscow last year and is enjoying a high level of growth among the rich upper stratum of Russian society as well as the steadily emerging middle class. Hill''s Pet Nutrition is another company that has managed to become established in Russia.