Pet food sales have followed a steady upward trajectory across Southeast Europe. In Romania, the growth has triggered an inflow of investments into local production capacities. In February 2024, United Petfood rolled out plans to invest EUR 35 million (US$38 million) in its second Romanian plant. The construction of a new facility marked an important milestone for local pet food production, which has recently started to perk up.
“While 10 years ago there was only a pet food production plant [in Romania], today there are three to four fairly large units, and other factories are due to begin operation in the nearest future,” said Ionuţ Munteanu, co-founder of Aviagro, a Bucharest-based pet food store. He added that so far, the investments have been allocated primarily by local companies.
“In developing the domestic pet food industry, Romania is only at the beginning of its journey,” Munteanu said.
Romania: New investments but a pet food trade deficit
In 2024, pet food sales in Romania jumped nearly 10% compared with the previous year, reaching RON 4.97 billion (US$1.1 billion), market research firm Euromonitor International calculated.
Several local companies have recently invested in new pet food production capacities. At the end of 2024, Fresh Farm, a regional brand, kicked off a new pet food factory in Alba county, in the northwest part of Romania, investing between EUR 5 and 10 million (US$5.4 and US$10.9 million) into several lines for the production of wet pet food.
Last year, Transavia, one of the largest pet food processors, registered five trademarks to trade pet food, dietary supplements and pet accessories. In a follow-up comment to a local news outlet, Profit, the Transavia press office unveiled that it mulled investments in the new segment, though refrained from disclosing additional details.
In terms of pet food trade, Romania has the fourth largest trade deficit globally of US$363 million — a level surpassed only by the United Kingdom, Japan and Canada, according to the World Top Exports platform. In 2023, the last year for which public data is available, pet food imports approached US$400 million, while exports stood at US$22 million.
Stark contrast in Bulgaria
The investment inflow into the Romanian pet food industry is in stark contrast to Bulgaria, where almost the entire demand is still met by imports. To some extent, the difference can be attributed to the immaturity of the Bulgarian market, where pets receive only around 30% of calories from branded pet food, while the rest comes from leftovers from human tables, as estimated by local market players.
However, the Bulgarian pet food market has also witnessed some positive shifts in the last few years. For instance, the premiumization trend returned to the Bulgarian pet food market in 2024 after a pause caused by the cost-of-living crisis and high inflation in this part of Europe, research by Euromonitor showed.
According to the analysts, pet owners became more accustomed to the significantly increased prices of the previous two years due to massive inflation, raised costs of production and transport, and raw materials. On the flip side, the growth of pet food value sales slowed due to a decrease in 2024 inflation and the stabilization of prices.
Pet food growth to continue
Pet food sales are set to rise across the region in the coming years, Euromonitor forecasted. “Pet food in Bulgaria and Romania have been showing double-digit CAGR [compound annual growth rate] in value in the last five years, and 5% and 3% in volume, respectively”, commented Aleksandras Bacevicius, an analyst at Euromonitor.
“The forecast period is expected to have a strong single-digit CAGR growth in both volume and value. Additionally, the prepared gap [pets not fed commercially prepared pet food] means there’s still potential for the market to grow further. So new players’ strategies certainly include these market dynamics,” Bacevicius said.
Remarkably, some unusual factors tend to drive the growth in pet food sales, as revealed by local retailers. To some extent, the growth in dog food sales last year was attributed to the fact that some rural residents purchase it to feed pigs in their backyard, said Feliciu Paraschiv, director of Paco Supermarkets, who anticipates a double-digit increase in sales value in 2025.
“Sales will also grow in volume, but at a more moderate pace, as the penetration of the category in rural households becomes wider,” Paraschiv added.
Different strategies for different companies
Some prominent pet food manufacturers plan to capitalize on the growing sales in Southeastern Europe, even without product localization. For example, Kormotech, which has recently begun constructing its second production facility in Kėdainiai, Lithuania, unveiled plans to boost sales to Romania to eventually capture a 10% share of the local market. In its annual report, the Ukrainian pet food producer also mentioned that Bulgaria was among Europe’s five key sales markets for the company.
However, analysts believe the strategies for the companies targeting to expand their presence in the markets of Southeastern Europe should “differ in hindsight.”
“United Petfood are just going through their steady expansion, while Kormotech is clearly trying to take their production away from the war-ravaged Ukraine and perhaps capitalize on increased access to EU markets and better logistics overall,” Bacevicius said.
“At least for United Petfood, Bulgaria’s domestic market is most likely not a secondary priority, while that might be true for Kormotech,” he added.