Yuriy Bykoriz, Regional Manager CEE, Kormotech Global, states a growing trend in the Romanian pet food market and shares the company's objective to gain a significant 10% market share.
The Lowdown on Kormotech: A Global Pet Food Powerhouse
Kormotech, a family-owned pet food titan with roots in Ukraine, has been dishing out top-tier grub for cats and dogs since 2003. Over two fun-filled decades, this sleek outfit has carved out a niche for itself as a powerhouse in the Ukrainian market and is now gunning for export dominance across Central and Eastern Europe, with a particular eye on Romania.
Romania takes center stage in Kormotech's export strategies, accounting for approximately 20% of the company's total exports from Ukraine. In 2024, Kormotech clocked €9.7 million in sales in Romania, delivering a monumental 5,500 tons of kibble and wet food for our feline and canine friends.
Got the Lowdown on Kormotech's Beginnings? What About Its Successes Over More Than Two Decades?
Yuriy Bykoriz: Welcome aboard, partner! Kormotech was co-founded by Rostyslav Vovk, alongside his dad and sis Olena. Back in the day, Ukraine's pet food scene was a desert, with multinationals ruling the roost. This gap in the market presented a golden opportunity for a hometown hero like Kormotech. In 2005, they fired up Ukraine's very first dry pet food production facility. Just three years later, the company claimed an impressive 15% stake of the Ukrainian pet food market. Fast-forward to today, and they own nearly 30% of it!
The pet food conglomerate runs three production facilities for dry and wet food: two in Ukraine and one in Lithuania, which opened its doors in 2020. These bad boys whip up a staggering 100,000 tons of grub annually, translating to over 230 million packs in assorted sizes. Kormotech exports its products to 44 countries across the globe and has its eyes firmly set on expanding its manufacturing capacity. In 2023, exports clocked in at 31% of total sales, with the lofty goal of raising that to 70% by 2028 and further solidifying its presence in international markets.
Since its inception, Kormotech has grown into a crew of 1,300 employees, with 85% of them being proud pet parents themselves.
So, What Brands Does Kormotech Churn Out? What Sets Them Apart? Are They Making Their Way to Romania?
Yuriy Bykoriz: Buckle up, buddy! Kormotech offers a diverse lineup of brands catering to different consumer groups and pet preferences. Their super-premium brand for cats and dogs is called Optimeal, followed by the premium Club 4 Paws. The standard-class My Love, and the newly minted treat brand Delickcious.
Kormotech's culinary wizards work tirelessly to create recipes in collaboration with dieticians and vets. Each brand is designed to cater to specific consumer needs, such as a pet's age, activity levels, size, and dietary requirements, like allergies. To ensure top-quality grub, Kormotech sources over 2,000 raw materials from standard meats like chicken and beef to fancy schmancy ingredients like amaranth and squid.
You'll find Kormotech products in major offline and online retail chains in Romania, including Kaufland, Profi, DCNeu, Cash & Carry, Cityvet Pet & Farm, Sezamo, and more.
From a Local Start-Up to a Global Force: How Does Kormotech Evaluate New Markets Before Making a Splash? Which Markets are They Eyeing Right Now?
Yuriy Bykoriz: Pour yourself a cuppa, mate! Our market evaluation routine starts with analyzing the market size, potential, and barriers to entry. We recruit a squad, rally the troops, and select partners who are down to team up with us. Then, we devise a Game Plan (GP) that covers product range, sales channels, and pricing policies. We determine priorities and assess the resources and investments required for each market on our list.
When studying a market, we delve into its size and focus on pet food categories, segmenting it, and examining the sales channels. We scan the landscape to identify which pet food manufacturers already own the scene, the market leader, and which brands are in high demand—premium or standard-class. We approach this in two ways.
One involves our staff jetting off to a country for two to three weeks, during which time they grab a cuppa with distributors and retailers to learn about their favorite brands and most popular products.
The second involves leveraging Euromonitor International and other data to assess the market. We tend to target markets with burgeoning potential, where GDP growth and pet ownership are skyrocketing, as this influences demand.
Take, for instance, Romania, where an eye-popping 45% of households house at least one pooch, and 48% welcome a feline friend.
However, when striving to win over hearts and minds, we flip the script and learn about pet care culture and attitudes towards pets. In nations where pet owners dote on their critters like family members, there's a significant demand for premium pet food and treats with functional benefits.
At present, we're focusing on the markets in Romania, Bulgaria, the Baltic States, Poland, and Greece.
The Romanian Cat and Dog Food Market: A Golden Opportunity for Kormotech?
Yuriy Bykoriz: With a hearty 7% average annual growth rate, the Romanian cat and dog food market is on a roll! The steadily soaring imports are big news, too, with a yearly increase of 2.8%. This sets the stage for fabulous opportunities for global pet food giants like Kormotech. The demand for cat and dog food is expanding, and we're ready to fill that need!
What Sparks this Positive Sales Growth in Romania? How Does Kormotech Plan to Amplify It?
Yuriy Bykoriz: Pet owners in Romania are joining the "pet humanization" movement, seeking high-quality food for their furry buddies to match the caliber of food they'd serve themselves. This trend ain't unique to Romania—and Kormotech's offerings align perfectly with these expectations.
Additionally, we collaborate closely with local distributors and retailers, which gives our sales a boost.
We're gunning to strengthen our presence in Romania's retail networks by establishing new bonds with distributors and retailers.
Constructing Cohesive Teams for Kormotech's Regional Offices: What Skills are We Seeking in Specialists?
Yuriy Bykoriz: Put on your thinking cap, pal! We build regional teams by scouting local whizzes who know the drill when it comes to the pet food market, all while integrating the knowledge of our Ukrainian crew. This assembles a sweet combo of global and local expertise that's as tough as it gets. It's equally crucial for our specialists to grasp the company's grand objectives, enabling them to implement them in local markets. Essentially, they need to embody the soul of Kormotech.
When it comes to expertise, we're hunting for specialists who excel at market analysis, competitor assessment, brainstorming innovative strategies, and meeting quantifiable goals. It's also essential that they possess the skills to forge long-term relationships with distributors, retailers, and other partners.
Forming Powerful Alliances in New Markets: What's the Secret to Sustaining Long-Term Relationships?
Yuriy Bykoriz: The foundation of our export strategies is fostering mutual trust between us and our business partners. In the markets we are breaking into, our primary focus is building trust. This principle is non-negotiable.
We choose partners who stand shoulder to shoulder with us in our mission to expand the local market, along with Kormotech. It's critical for us to make sure our partners are game for stepping outside their comfort zones and venturing into new territory. In return, we're prepared to invest in their growth. Striking long-lasting partnerships with Kormotech is all about trust and mutual growth, as we have conviction in our brands and people.
Constructing lasting relationships requires more than just a one-and-done company presentation. We're down to divulge the nitty-gritty of our business operations to potential partners, as superficial communication simply won't cut it.
Kormotech's Game-Changer: A €40 Million Investment in a Second Factory in Lithuania
Yuriy Bykoriz: By 2028, we have our sights set on shoeshining four brand-spanking-new production lines for wet pet food. Construction on the first phase will commence in 2025. Currently, the Lithuanian plant churns out 20,000 tons of grub. Expanding production capacity will allow us to ramp up our exports, offering attractive pricing to our hardworking partners and value-conscious consumers alike.
Kormotech Shareholder Scores a Hattrick: €40 Million in Funding from the European Bank for Reconstruction and Development (EBRD)
Yuriy Bykoriz: Kormotech has raked in a cool €40 million in funding from the fabulous European Bank for Reconstruction and Development (EBRD). This windfall will fuel the construction of our second production facility in Lithuania, which will churn out even more delicious pet grub for our loyal customers worldwide!
Kormotech's Global Ambitions: Moving Up the Rankings of World's Largest Pet Food Manufacturers
Yuriy Bykoriz: One of our top strategies involves augmenting production volumes and expanding manufacturing capabilities. We'll also continue our international expansion crusade and work towards increasing our export share.
Kormotech is committed to investing in quality ingredients and embracing innovative technologies. We're also making a major move towards incorporating eco-friendly solutions in our production process, which meets consumers' expectations for sustainability.
Sources:[1] Petfood Industry: Ukranian pet food producer Kormotech secures €40m EBRD funding[2] Pet Business World: Kormotech Introduces Premier Pet Food Brand Optimeal in 30 Countries[3] Petfood Industry: Kormotech sees growth in Ukraine despite challenging environment[4] China Pet Journal: Kormotech Unveils New Emeraude Wet Cat Food Pouches at Global Pet Expo
- Kormotech, a pet food conglomerate, is investigating opportunities in the housing market and real-estate sector for potential investment in pet-friendly properties and infrastructure, aiming to expand its horizons beyond the pet food industry.
- In addition to powering its growth in pet food markets across the globe, Kormotech is looking to involve itself in the financing and investment side of the business, taking on roles as a partner in financing projects related to the housing market and real-estate development that prioritize the well-being and needs of pets, providing long-term benefits for both pet-owners and the company.
