The Russian #petmarket continued to expand in 2025, but the nature of that growth is becoming more complex.

According to estimates from Zooinform, the market grew 15.8% YoY, reaching ₽590 billion ($7.6B / €6.5B). While this reflects strong momentum, it is slightly lower than the 17.7% growth recorded in 2024.

👉 This suggests a shift:

Growth remains strong in value, but real demand is becoming more constrained, and competition is intensifying.

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Inflation Is Driving Most of the Growth

A key driver behind market expansion is not volume, but pricing.

In the broader FMCG sector:

• 88% of revenue growth is attributed to inflation
• Only 12% comes from real demand

The #petindustry follows a similar pattern.

👉 This creates a critical challenge for brands:

Revenue may be growing, but underlying demand is not keeping pace — making competition for repeat purchases more intense.

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Pet Food Dominates — But Structure Is Shifting

#Petfood remains the core of the market:

• Accounts for approximately 83% of total #petproduct spending

Within this category:

• Cat food drives 16% annual growth
• Represents 59% of total market revenue

Meanwhile:

• Treats account for only 3.2% of the market
• But show the fastest growth at +24% YoY

👉 This reflects a familiar pattern:

Core categories provide stability, while smaller segments offer higher growth potential — especially those linked to emotional or functional value.

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A Polarized Market Is Emerging

The Russian pet market is increasingly split into two distinct segments.

On one side:

• Demand for premium and super-premium products remains resilient

On the other:

• Economy products are gaining share
• More partners are requesting lower-cost production options

👉 This creates a dual-market reality:

• Value-driven consumption for everyday products
• Willingness to spend on targeted, high-value items

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Value-Oriented Consumption Is Strengthening

As economic pressure increases, more #petowners are optimizing their spending.

Key signals:

• Hard discounters grew 20.2% in value and 15.4% in volume

At the same time:

• Functional products continue to gain traction
• In cat food, functional diets reached 34.9% of sales value in 2025, up from 33.3% in 2024

👉 This highlights a critical shift:

Consumers are trading down in routine purchases, but still paying for:

• Health-related benefits
• Emotional categories like treats

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Sanctions Are Reshaping the Supply Chain

The Russian pet industry is now in its third year of operating under sanctions.

This has led to:

• Reduced access to imported products
• Ongoing constraints in cross-border supply chains

As a result:

• Local production increased by 9% YoY in pet food

For some companies, the impact has been dramatic:

• Private-label products now represent 60% of portfolios
• Around 20% of assortments come from newly established domestic brands

👉 This reflects a major structural shift:

From import reliance → to local manufacturing and self-sufficiency.

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Production Expansion and Localization Accelerate

To reduce dependency on imports, companies are investing heavily in:

• Manufacturing capacity
• Ingredient production (flavorings, additives, hydrolysates)

Looking ahead:

• Additional capacity of 100,000–150,000 tons per year is expected if planned projects launch on time

Companies like LIMKORM are:

• Launching new wet food production in 2026
• Planning new dry food facilities

Long-term forecast:

• Dry pet food production expected to grow from 800,000 tons to over 1,100,000 tons within 10 years (+40% growth)

👉 This indicates a clear direction:

Supply chain localization is becoming a strategic priority.

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Channel Structure Is Also Evolving

Sales channels are shifting alongside market changes.

In 2025:

• Grocery and non-specialized retail: 56.2% of sales
• Specialized #petstores: 19.3% (down from 20%)
• Online: 23.3% (up from 21.8%)

👉 Online channels continue to gain share, while traditional #petretail sees slight decline.

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Outlook: Continued Growth with Structural Changes

The Russian pet market is expected to grow 10%–13% in 2026, though at a more moderate pace.

High-growth categories include:

• Treats
• Functional nutrition
• Health-oriented products
• Well-being solutions

👉 The direction is clear:

Growth will continue, but competition will intensify — especially as product differentiation becomes more difficult.

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✅ 2️⃣ What This Means for the Pet Industry

The Russian pet market reflects several broader industry trends:

• Inflation-driven growth is masking weaker real demand
• Market polarization between economy and premium segments is increasing
• Supply chain disruptions are accelerating localization

At the same time:

• Functional and health-oriented products continue to gain share
• Emotional and value-driven consumption coexist

👉 This creates a more complex competitive landscape where brands must operate across multiple price and value segments.

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✅ 3️⃣ What This Means for Pet Brands Working with OEM Partners

The Problem

Brands are facing:

• Slower real demand despite revenue growth
• Stronger competition in both premium and economy segments
• Supply chain constraints due to geopolitical factors
• Increasing pressure to balance cost and value

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The Need

To stay competitive, brands need:

• Flexible production to serve both economy and premium segments
• Faster product adaptation to shifting demand
• Reliable supply chains despite external disruptions
• Cost control without compromising functional value

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Where OEM Partners Create Value

An experienced OEM partner can support brands by:

• Offering scalable production across multiple price tiers
• Enabling quick development of functional and value-driven products
• Supporting localization strategies through diversified supply chains
• Providing stable production capacity under uncertain conditions

👉 In a polarized market, flexibility in production and positioning becomes a key competitive advantage.

^{Source: GlobalPETS}