The cost-of-living crisis in Europe has eased, leading to a boost in pet food sales. However, the market in Eastern Europe remains sluggish due to inflation, resulting in a slight decline in volume in 2023. This trend is expected to rebound this year, with a 13% growth in 2024, which is considerably less than the 20% growth seen in the previous year.
According to Euromonitor International, the economic hardship experienced in 2023 resulted in price polarization in the pet food market, with the mid-priced segment being the most affected. As a result, pet owners turned to cheaper economy pet food options, leading to an increase in private-label sales. However, the mid-priced segment is showing signs of recovery in 2024. Similarly, cat and dog treats are regaining momentum after taking a back seat during the peak of inflation, as they were not considered essential pet products.
Private label pet food is also gaining popularity in the region, due to its better price and improving quality. In some countries, such as Hungary, the pet food market is still struggling to recover. The country has been hit by one of the highest inflation rates in Europe, which has had a significant impact on pet food sales. The number of pets has decreased, and shelters are full again, as some pet owners struggle to make ends meet amid rising prices.
Retailers have also noticed the impact of inflation on the pet food market. Many producers have been forced to raise prices due to the increase in raw material costs, leading to retailers also raising their prices. As a result, retailers are now more cautious about which brands they include in their stores.
In conclusion, while the cost-of-living crisis has eased in Europe, the pet food market in Eastern Europe is still feeling the effects of inflation. Private label pet food is gaining popularity, and retailers are being more selective with the brands they stock. This trend is expected to continue in the coming years, as the region works towards recovering from the economic impact of the pandemic.