Farm retail Fabrik Cosmetology will launch products for pets
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The co-owners of Fabrik Cosmetology, a manufacturer of cosmetics and household chemicals, including Oleg Murov, one of the founders of the Pharmland pharmacy chain, decided to start producing treats and pet products. Now the turnover of this market in terms of money is increasing, which is explained, among other things, by rising inflation. This affects the increase in the profitability of local producers. However, they, according to experts, have to face serious competition from imports from China.
Domashny Pitomets LLC received a declaration of conformity for animal feed and dried beef treats, Kommersant found in SPARK-Interfax. Previously, the company secured the Meatbeat trademark and applied for registration of the Cats&pets brand.
Since December 2022, Home Pet has been 40% owned by Oleg Murov, one of the founders of the Pharmland pharmacy chain. He and another owner of Pharmland, Adele Kalmetyeva, have 25% each in Fabrik Cosmetology, a manufacturer of cosmetics and household chemicals. Vyacheslav Pantyukhin and Yulia Voloshanovskaya, who are also among the founders of Fabrik, have 20% each in the Pet House. Another 10% each went to Zarina Zinnurova and Andrey Fedorov.
“Home pet” will be engaged in the production of treats and fillers for animals on a rented site, Oleg Murov told Kommersant. According to him, now production is just starting up and technical debugging is underway, in August the company plans to enter marketplaces with goods, and in the fall – to large federal chains and pet stores. Mr. Murov did not specify the volume of output and the amount of investments, adding that we are talking about “tens of millions of rubles.”
According to NielsenIQ, sales of pet treats in the first half of 2023 in offline stores alone grew in value by 2.1% yoy, but decreased by 6.7% in physical terms. Sales of litter for toilets decreased both in money terms (by 2%) and in physical terms (by 5%). The volume of the entire industry of goods for pets in January-June increased by 12.3% in money terms and decreased by 3% in physical terms.
The segment of fillers is oversaturated due to the abundance of manufacturers and brands, warns the president of the National Association of the Pet Industry Kirill Dmitriev. According to him, a significant share is occupied by companies from China, significant volumes are also imported from Turkey. Oleg Murov claims that the products of the “Domashniy Pet” are able to compete in quality with goods from China.
Chinese products fail to replace the high-quality products of manufacturers from Europe and the United States, many of which have announced their withdrawal from the Russian market in the spring of 2022, Mr. Dmitriev notes. Although, he adds, in the high price segment, where Western companies operate, demand began to decline due to the desire of Russians to save money during the crisis.
The situation is different in the segment of pet treats: there are not such a large number of manufacturers and brands, although competition from imports from China is also palpable, explains Kirill Dmitriev. Rustam Rakhmankulov, the founder of the Bowl Wow pet food brand, considers the treats niche attractive, as the entry threshold is much lower than, for example, in the pet food segment. At the same time, he adds, the profitability of the production and sale of treats has always been much higher than that of feed.
The cost of treats, as well as other processed meat products, increased by 5–12% on average over the year, veterinarian Dmitry Kolobkov points out. He believes that manufacturers can promote treats, including using the expertise of the veterinary community.
Kirill Dmitriev says that in the pet products industry, it is becoming increasingly difficult for Russian players to compete with importers’ prices. Rustam Rakhmankulov, on the contrary, believes that the emergence of new Russian players can drive prices down, as the cost of products from leading suppliers of delicacies, which includes China, depends on complex logistics and exchange rates.
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