Animal feed (Russian market)

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Chronicle

2024

How Italian animal feed maker Hill's is cheating Russians

Since February 6, 2024, by order of the Rosselkhoznadzor, the import of feed from the Italian enterprise Hill's into Russia has been stopped. This decision was made in connection with the supply of low-quality products, the ministry said in a statement. Read more here.

Arsenic has been found in Italian dog and cat food Farmina. Russia has limited their supplies

Rosselkhoznadzor limited the import of animal feed Farmina Pet Foods into Russia after the discovery of arsenic in them. This was reported in the department at the end of January 2024. Read more here.

2023

5% increase in finished pet food production to 1.45m tonnes

In 2023, the production of finished pet food in Russia reached 1.45 million tons. This is 5% more compared to 2022, when 1.38 million tons of these products were produced in the country. Industry trends are addressed in the company's review of BusinesStat, published in late October 2024.

The study takes into account food for cats, dogs, aquarium fish, ornamental birds, rodents, turtles and reptiles. Among the leading players in the Russian market are named ZAO Pig Complex Korocha, LLC Bryansk Meat Company, LLC MPK Atyashevsky, LLC Provimi, OJSC Velikonovgorodsky Meat Yard, etc.

In 2019, it is estimated that domestic producers produced 1.05 million tons of pet food. A year later, production rose 14%, reaching 1.19 million tons. In 2021, an increase of another 10.6% was recorded with a final result of 1.32 million tons, and in 2022 the volume of production increased by 4.6%. In general, from 2019 to 2023, production in the Russian Federation rose by 38%.

BusinesStat analysts attribute the steady positive dynamics to several factors. This is, in particular, the general growth in demand and restrictions Rosselkhoznadzor on the import of feed. The agency inspected more than 70 enterprises in 14 countries of the world: according to the results of inspections, supplies for manufacturers from a number of countries were limited Bulgaria Denmark-,,,,, and Latvia. Lithuania Poland Slovenia Czech Republic Reasons - non-compliance of feed compositions stated on the label, non-compliance with the temperature regime of feed treatment and the detection of components of unknown origin. Against this background, new players appear on the Russian market: non-core enterprises such as poultry farms, meat processing and canning plants, etc. enter it.^[1]

The increase in the share of cat feed of Russian producers in the Russian Federation to 96%

At the end of 2023, the import of ready-made cat feed to Russia amounted to 34.1 thousand tons. This is 54.5% less compared to 2022, when 74.9 thousand tons of these products were delivered to the Russian Federation. At the same time, the share of Russian manufacturers in the total volume of the market under consideration rose from 91% to 96%. This is stated in a study by BusinesStat, the results of which were published in mid-October 2024.

The review looks at wet and dry feeds. Among the significant players in the Russian industry are named such enterprises as ZAO Pig Complex Korocha, LLC Bryansk Meat Company, LLC MPK Atyashevsky, LLC Provimi and OJSC Velikonovgorodsky Meat Yard.

In 2019, according to estimates, the import of ready-made cat feed to Russia amounted to 105.6 thousand tons, or about 14% of the total market in the country. The remaining 86% was provided by domestic suppliers. In 2020, imports increased by 1.2% - to 106.8 thousand tons, and the share of such products reached 15%. After that, a decline began. So, in 2021, Russian purchases of foreign cat feed decreased by 5.2% - to 101.2 thousand tons, and in 2022 there was a drop of 26%. At the same time, the share of imported products decreased to 13% and 9%, respectively.

The study said Rosselkhoznadzor it has inspected more than 70 feed and feed additive businesses since 2021. As a result, supplies for manufacturers from a number of countries were limited Bulgaria Denmark-,,,,, and Latvia. Lithuania Poland Slovenia Czech Republic The reason for the import ban was the inconsistency of the feed compositions declared on the label, non-compliance with the temperature regime of processing products and the detection of components of unknown origin. And in 2023-2024, the Rosselkhoznadzor stopped the import of products from a number of manufacturers from, and. In Italy France Netherlands^[2]

Imports of animal feed to Russia for the year decreased by 31% to 72.4 thousand tons

Imports of pet foods and treats to Russia in 2023 decreased by 31%, according to data from the International Association "Anti-Counterfeit," which became known in September 2024.

According to the association, in 2023 72.4 thousand tons of products for animals were imported into the Russian Federation, while in 2022 this figure was 106.1 thousand tons. However, the decrease in the volume of legal imports did not lead to a reduction in the supply on the market by the same amount, since a significant part of the products moved to the "gray" zone.

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Freepik

According to TASS with reference to Anticontrafact, the share of illegal products among food for cats and dogs can be up to 15%. The pet food market in Russia is estimated at ₽250 billion, of which about ₽25 billion are counterfeit and falsified goods. The import of illegal products is accompanied by losses to the budget and creates serious risks to the health of pets.

The head of the association's animal industry committee, Olga Klimova, noted that Rosselkhoznadzor bans on the import of certain brands of feed also contributed to a change in the market structure. In particular, unverified genetically modified components were found in feed from China, Spain, Canada and other countries, and arsenic was detected in Farmina products. As a result, several European manufacturers, including enterprises from the Netherlands, Austria and France, lost the right to supply their products to the Russian market.

At the same time, the situation with counterfeit and unsafe animal feed should begin to change from October 1, 2024. On this day, the mandatory requirement to apply the "Honest Sign" marking codes on dry foods and treats will come into force. The phased introduction of labeling will continue, and from March 1, 2025, similar requirements will begin to apply to wet feed. The full product traceability chain should be closed by September 1, 2025.^[3]

Reducing the production of finished pet food

In 2023, approximately 1.35 million tons of ready-made pet food were produced in Russia. This is 2% less compared to the previous year, when the volume of production of these products was estimated at 1.38 million tons. The reduction was the result of weakening demand in both the domestic and foreign markets, as stated in a study by BusinesStat, the results of which were released in early February 2024.

The data presented take into account the production of food for cats and dogs, aquarium fish, ornamental birds, rodents, turtles and reptiles. Among the key market players are Mars LLC, ZAO Korocha Pig Complex, Atyashevsky Meat Processing Complex LLC, Ruscan JSC and Provimi LLC.

According to BusinesStat estimates, in 2019, about 1.05 million tons of ready-made pet food were produced in the Russian Federation. A year later, production rose by 14% to 1.19 million tons, and in 2021 the volume of output increased by another 10.6%, reaching 1.32 million tons. In 2022, an increase was recorded at 4.6%. The growth of production was facilitated by restrictions by the Rosselkhoznadzor on the import of finished feed to the Russian market. In particular, in the summer of 2020, a ban was introduced on the import of all feed and feed additives from the Netherlands, and in 2021 the restrictions extended to products from the United States and a number of EU countries. In total, 14 states fell under the ban.

Among the favorable factors contributing to the development of the Russian industry are the increase in the availability of high-quality and reliable food for pets, the expansion of the assortment and a decrease in dependence on foreign suppliers. At the same time, at the end of 2023, the production of veterinary feed and premium feed is poorly developed in Russia. One of the main obstacles to increasing the production of such products is the lack of high-quality meat-and-bone flour, the dependence on imports of which is 80%.^[4]

Growth in the production of feed additives by 25% to 166 thousand tons

At the end of 2023, the volume of production of feed protein-vitamin additives in Russia reached 166 thousand tons. For comparison, a year earlier the figure was 132.6 thousand tons. Thus, positive dynamics was recorded at the level of 25.1%, while over the previous two years there was a decline. This is stated in the report of BusinesStat, submitted on May 14, 2024.

It is noted that the composition of this product includes proteins, amino acids, vitamins and minerals. Most of the amino acids for the production of feed additives are purchased by Russian companies in China. Against the backdrop of the COVID-19 pandemic, prices for some of these components increased by 2-3 times, which is associated with an increase in logistics costs. As a result, in 2021, the volume of production of feed protein-vitamin additives in the Russian Federation decreased on an annualized basis by 13.3% - from 191.1 thousand tons to 165.7 thousand tons.

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BusinesStat

In 2022, a decrease of 20% followed - to 132.6 thousand tons. The fact is that due to the formed geopolitical situation, manufacturers in Russia faced a refusal to cooperate with a number of foreign suppliers of raw ingredients. Domestic companies had to renegotiate agreements with most trading partners in a short time. The production of some types of feed amino acids and vitamins in Russia is either completely absent or poorly developed. In 2022, the supply of such components decreased sharply, and the main fall fell on the countries of the European Union. At the same time, China's share rose to almost 90%.

The situation began to stabilize in 2023, when the share of imports from Belarus increased. Due to this, prices for raw materials, and therefore for finished products, decreased, which led to an increase in demand. The largest producers include Provimi LLC, De Hes NPAO, Novooskolsky Feed Mill CJSC, Soyuzpishcheprom Association LLC and Aleiskzernoprodukt CJSC named after S.N. Starovoitov.^[5]

Russian animal feed accounts for 98% of the market in the Russian Federation

In 2023, 1.4 million tons of pet food were produced in Russia and only 80 thousand tons were imported. Domestic products account for about 98% of the market in the Russian Federation, Rosselkhoznadzor reported in early February 2024.

According to the ministry, animal feed to Russia in 2023 was supplied by the EU countries, China, Serbia, the countries of the Eurasian Economic Union (EAEU) and Brazil. At the same time, 67% of imports in 2023 fell on unfriendly countries, including 12.5% on Hill's and Farmina feed.

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Pexels

Obviously, compared to the volume of Russian production and the market as a whole, their share will be extremely small. A wide range of feed of various price categories is presented on the Russian market, including specialized feed, as well as other foreign brands, the Rosselkhoznadzor told TASS.

They added that only safe feeds that have no analogues or are not produced in Russia, as well as from enterprises that have been inspected by the Rosselkhoznadzor, are imported into Russia from unfriendly countries.

According to the analytical company NielsenIQ, by the end of 2023, the range of cat food decreased in Russia by 13%, and for dogs - by 5.7%, compared to the first half of 2023. Against this background, the development of new products will become the main direction in the development strategy of retailers and manufacturers, experts say. The study says that in 2024, 73% of the surveyed top managers of the Russian FMCG market plan to launch new items in the middle and premium price segments. 52% of retail representatives also count on new products: they intend to introduce products under their own brands into the range.^[6]

2022

Market growth of 6% to 1.4 million tons

The volume of the Russian pet food market in 2022 reached 1.4 million tons, which is 6% more than a year earlier. Compared to 2014, sales of these products soared by 83%, analysts at the GuideMarket marketing research agency calculated (the report was published on November 16, 2023).

According to the analytical report, in the period from 2014 to 2022. The Russian pet food market grew by an average of 7.8% annually. Even in 2020, during the active period of the COVID-19 coronavirus pandemic, the market showed a 10% increase by 2019, amounting to 1.24 million tons, the study noted.

According to the analytical agency FEEDLOT for 2022, over 60% of the total volume of finished feed is provided by enterprises of two federal districts of Russia: Central (43%) and Volga (21%). At the same time, the most intensive increase in output volumes in 2022 was shown by enterprises in the Far East (+ 33%), a slight decrease was recorded in the regions of the North Caucasus (-7%). In the remaining federal districts, the production of finished feed increased by 4-10% over the year.

It is noted that the structure of production of ready-made feed for farm animals accounts for the bulk of feed - more than 80%. In 2022, domestic enterprises continued to increase their production rates - 6% more feed was produced than in 2021. The volume of production reached 34 million tons.

The structure of feed production by type is similar to the structure of meat production in various segments of animal husbandry. As in previous years, the bulk of the feed is for poultry and pigs, in total they account for about 90%. In 2022, the volume of feed production for cattle reached almost 3 million tons, adding about 9% over the year^[7]

Reduction in feed protein production by 24% from 2018 to 126 thousand tons

At the end of 2022, about 126 thousand tons of feed protein were produced in Russia, which is 24% less than in 2018, when the figure was 165 thousand tons. Such figures are provided in a study by BusinesStat, excerpts from which were released in October 2023.

According to analysts, the production of feed protein in the Russian Federation has been declining since 2019. The largest decline was recorded in 2020, when the crisis and the complication of foreign trade operations due to the COVID-19 coronavirus pandemic led to a weakening of demand for feed protein, which forced manufacturers to reduce production volumes, experts say.

According to them, in 2022, the production of feed protein decreased by only 2.5%. As a result of the termination of trade relations with Russia by a number of countries, imports of feed protein by the end of 2022 decreased by 26%. Under the current conditions, domestic producers were able to replace the share of retired imported products, due to which production was not reduced too significantly.

Among all types of feed protein in Russia, feed yeast is produced in the largest volume - 90% of total production in 2022, or 113 thousand tons. Feed yeast is the cheapest type of feed protein, thanks to which they are in wide demand on the market, explains BusinesStat.

Bacteria are significantly faster than yeast cells to build up biomass and contain more cysteine and methionine, which allows them to be classified as proteins with high biological value. However, the production of fodobacterin is a rather complex and expensive process, and therefore the technology of growing microbial protein by oxidizing methane has become more widespread. Thus, protein concentrates of methane fermentation occupied in 2022 9.9% of the total Russian production (12.5 thousand tons), the share of fodobacterin accounted for 0.2% (0.2 thousand tons).^[8]

Growth in sales of cat food by 1% to 674 thousand tons

In 2022, 674 thousand tons of ready-made cat feed were supplied in Russia, which is 1% more than a year earlier, and in comparison with 2018, the market volume increased by 15.7%. This is evidenced by the data that BusinesStat analysts published in May 2023. Experts listed several factors that contributed to the rise in cat food sales in 2022:

• an increase in the number of domestic cats in Russia;
• increasing the economic feasibility of buying finished pet food;
• an increase in the representation of ready-made cat food in stores and online commerce;
• continued urbanization - townspeople more often than villagers use specialized food for pets.

According to the researchers, in 2022 there was a rush demand for pet food of imported production due to fears of stopping supplies. Cat food has a long shelf life, so animal owners sought to purchase it for future use. The sanctions did not directly affect the ready-made animal feed market, but some large international companies have limited their work in Russia to one degree or another. Nestle has reduced the range of feed produced in Russia due to logistical difficulties with the supply of raw materials. Mars decided to stop supplying feed to Russia, as well as exporting feed from Russia. The production of these companies is largely localized in Russia and is focused on meeting domestic demand. Both companies announced the suspension of investments in Russian business and the termination of marketing activity, BusinesStat noted.

Imports of cat feed to Russia in 2022 decreased by 28.9% compared to 2021 and amounted to 71.1 thousand tons. The decline was influenced by factors such as a rupture of supply chains, an increase in the cost of transportation and difficulties in paying suppliers for goods.^[9]

Dog food sales up 2% to 381 kt

In 2022, 381 thousand tons of ready-made dog food were sold in Russia, which is 2% more than a year earlier. Compared to previous years, growth rates have declined sharply, as evidenced by data from analysts at BusinesStat. The study was released in May 2023.

According to the researchers, the main factors that led to the increase in sales of ready-made dog food were:

• an increase in the number of dogs in Russia;
• increasing the economic feasibility of buying ready-made feed;
• an increase in the representation of ready-made dog food in stores and online commerce;
• continued urbanization - townspeople more often than villagers use specialized food for pets.

At the same time, according to analysts, in the context of a decrease in real disposable incomes of the population, the price becomes the decisive factor in choosing ready-made dog food. Trends such as buying on promotions, buying feed from lower price categories or buying more packages are increasing, which allows you to spend less money per kilogram of food.

The study notes that in 2022, the situation was aggravated by such factors as a rupture of supply chains, an increase in the cost of transportation and difficulties in paying for goods to suppliers, which led to a decrease in imports in 2022 by 28.3%. Supplies from France (-6.5 thousand tons), Germany (-2.1 thousand tons) and Hungary (-1.8 thousand tons) were significantly reduced. The reduction in imports was due to a number of bans on the supply of feed to Russia by the Rosselkhoznadzor, which led to an acceleration of import substitution and an increase in the production of domestic products. At the same time, the import of ready-made dog food from Italy (+ 3.7 thousand tons) and the Netherlands (+ 1.3 thousand tons) increased to Russia.

Notes