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29 Aug, 2007 13:52

Nestle bites into Russia's growing pet food market

The world's largest food producer, Nestle, has opened a pet food plant in Russia's Kaluga region, south of Moscow.

Production is slated to start this autumn with an annual target of 40,000 tons.

Analysts say the $US 30 MLN project attests to the rapid growth and attractiveness of Russia's pet food market as a whole.

While synonymous with chocolate, Nestle is also a leader in the production of pet food. The company says the investment is worthwhile anywhere in the world, but particularly in Russia.

“With growing incomes, consumers are able to spend more on improving the lives of their pets,” said Bernard Meunier, Chief Executive Officer of Nestle Russia.

The exact number of pets in Russia isn't known, but analysts estimate it at about 35 MLN.

This means every third Russian household has a cat. And when it comes dogs, Russia comes first in Europe.

These numbers are enough to lure global giants such as Nestle. The dry pet food plant in Kaluga will be run by a Russian branch of its subsidiary Nestle Purina PetCare.

“The Russian market is not very fragmented. We have one main competitor – Mars. They arrived a bit earlier on the market. We are moving quite fast in our growth. We are moving faster than the market,” pointed out Yana Mikhailova, the Director of Nestle Purina PetCare Russia.

Oleg Arustamov, a sales manager at wholesale company Grand Alfa, which owns a chain of pet stores in Moscow, says customers tend to go for Nestle rather than Mars.

Russia's pet food market is worth about a $US 1 BLN, according to the European institute of market analysis, Euromonitor International.

Russia's pet food market is a green field for many global investors such as Nestle. Only 5% of the country's population buy special food for their pets. This leaves plenty of room for growth to attract new investors and to make pets happier and full.