The soaring numbers of the Romanian pet industry: A good sign ahead of fears of (another) financial crisis?
Romanians tended to buy cheaper foods for themselves but did not neglect their animal companions – a staggering number of over RON 3 billion for pet consumption was at stake, according to last year’s statistics. How is the pet industry in Romania faring between the period of economic downfall due to the pandemic and the fear of recession?
“It is better to buy a sandbag a week and food bags than to give a lot of money for what the child needs.” Ioana has always been a pet lover. When she moved to Cluj-Napoca two years ago, she adopted Boo, a white male cat, off the street, and “he’s always been loving.” As a matter of fact, she prefers to have “a house full of animals” than children for one of many reasons.
In Romania, the pet industry is a thriving one, with an upward trend in the past few years. Non-speaking fluffy friends are highly loved in the country. The European Petfood Industry Federation (FEDIAF) estimates that in 2021 45% of local households had at least one dog and 48% a cat – the highest percentages among other EU nations. It is possible that some even have both pets: the statistic reveals a total of 90 million EU households own at least one animal, with cats dominating the top pet chart in Europe with over 113 million before dogs with 92 million.
Like Ioana, who adopted another cat named Oscar during the pandemic, the idea of owning a new friend during those unusual years became a form of ‘escapism’ for so many people in an already lonely world. They served as a worthy distraction in that “year of pet boom” and simply a good reason to get around the lockdown law’s loophole that only allowed people to go out to perform essential tasks, including walking their pets.
While most businesses suffered economically during the atypical years of the pandemic, the pet industry continued to thrive. According to an analysis by Ziarul Financiar, Romanians spent an estimated RON 3.6 billion on pet foods and other products in 2021, and the numbers are expected to jump continuously in this new decade.
Horia Cardoş, CEO of Agroland, a Romanian retail, agriculture and food business group, had his fair share of ups and downs while building his pet and garden retailing empire since the 1990s. For Agroland, in the first nine months of 2022, pet food products registered a 44% increase, reaching RON 22.1 million, the company recently announced.
“If the market has developed strongly towards the premium area in the last ten years, the trend is entirely different this year. More precisely, those who used to buy super-premium products are now buying only premium ones, and those who were buying premium products are now choosing cheaper products, and so on. Obvious reasons influence this behavior, and the family budget is under stress due to macroeconomic conditions. We have also noticed this behavior among our customers, who no longer buy, for example, bags of food for their pets worth RON 500, but choose those that cost RON 200,” Cardoş tells Romania Insider.
“Unlike the 2008-2009 crisis, when the market suddenly fell by 20%, pets have become family members in the last 14-15 years, meaning their needs are treated with the same priority. Therefore, customers will not waive this cost and will only adjust their budget. Considering this context, where the entire market is declining, we can interpret the stagnation of the pet food industry as an evolution of the sector,” the CEO adds.
Instead of slowing down like any other business during the pandemic, Agroland’s most impressive percentage spike in recent years happened in 2020, when it recorded a 24% increase in turnover (RON 165 million) and 250% in net profit (RON 8,6 million) compared to the previous year’s numbers. In the year after (2021), it generated another 21% increase (RON 233 million) in consolidated revenues and 256% (RON 21.9 million) in net profit.
Meanwhile, pet shop network Animax has employed over 500 people and continued to expand nationally: at least eight new branches, each representing a EUR 50,000 investment, are coming into place one by one in 2022. Its turnover reached EUR 52.5 million last year and is expected to grow by 15% by the end of this year.
The numbers also flourish for smaller players: entrepreneur Andrei Cerbu claimed that his startup Drooler, which makes freshly cooked food for dogs, has reached a valuation of EUR 1 million. The startup, which partnered up with the University of Agricultural Sciences and Veterinary Medicine in Cluj-Napoca for research work on the recipes, is looking to raise more funds through the crowdfunding platform Ronin to promote healthy foods for dogs, with 65-85% coming from Romanian agriculture.
Also this year, European player Fressnapf Group entered the local market and opened its first store in Bucharest in September, part of a plan to open 14 locations in the country by the end of the year.
Globally, many hail the pet industry as the savior ahead of the fear of recession – a call back to the 2007/08 financial crisis, when American households were triggered to hold down more pets and subsequently kept the industry steady during the chaotic period.
Pets do make people feel better, especially at an uncertain time like this, and four-legged companions are now in high demand even more than humans in some cases – researchers at Canisius College in Buffalo, New York, found that women sleep better next to their dogs than their partners.
We’ve talked to Jessica and Maria about why they prefer having fur rather than human babies.
“I think many young people from my generation have grown up in difficult households, with parents that made hurtful mistakes, and this affected us. I just don’t want to make my kids go through the same things I did [psychologically]. That’s why I prefer cats; I don’t have to worry about giving them unnecessary mental health trauma,” Jessica says.
Maria, an owner of an orange cat, echoes Jessica’s statement by highlighting her career-focused mindset and the lower costs involved in adopting a pet. “I would rather travel and see the world. I can do that with a cat, but with a baby? Nope. [As selfish as it sounds,] I feel like a baby would pretty much be a burden, whereas a cat is fun to have around.”
(Photo: Anna Krivitskaia | Dreamstime.com)