The love for pets in Türkiye is driving an upward surge in pet food demand, particularly as more households embrace the companionship of dogs and cats. Sales figures soared to $127 million in 2022 and are projected to surpass $300 million by 2027, showcasing a remarkable growth trajectory. While the majority of pet food consumption is locally produced, with Türkiye accounting for about two-thirds of the market, imports mainly from Europe fulfill the remaining demand. With the expanding pet ownership landscape, domestic pet food production is poised for significant growth, which in turn, is expected to fuel demand for essential pet food ingredients like animal by-products and rendered oils.

BOOST IN TÜRKİYE’S PET POPULATION ELEVATES PET FOOD DEMAND

During the pandemic, akin to many developed nations, Türkiye witnessed a notable surge in pet ownership as people sought the comforting companionship of dogs, cats, and various other pets. By the close of 2022, this trend had led to a remarkable increase in the number of pets, propelling annual sales of dog and cat food to a staggering $127 million, as reported by the Turkish Statistical Institute (TURKSTAT). Despite prevailing economic challenges, pet food sales have maintained their upward trajectory and are anticipated to surpass $300 million by the culmination of 2027. Looking ahead, with a projected rise in household incomes and population growth, both the number of pets and pet food sales are expected to continue flourishing in the foreseeable future.

According to data from the Turkish Veterinary Association (TVHB), Türkiye boasts approximately 6 million domesticated dogs, with a substantial 4.5 million, and cats, totaling around 1.5 million. Furthermore, TVHB’s estimations indicate an even larger population of stray dogs and cats, reaching close to 10 million. Presently, roughly 5 percent of Turkish households are dog owners, while 14 percent embrace the companionship of cats. In comparison, nearly one-quarter of households in the European Union (EU) enjoy the company of a dog or cat, underscoring significant potential for growth in both pet ownership and the pet food industry in Türkiye moving forward.

Starting from January 2022, pet owners in Türkiye were mandated to register their dogs and cats in the national database through the provincial/district agricultural directorates, utilizing barcoded microchips. Notably, approximately one-quarter of these pets have been successfully registered in the system thus far. This registration stipulation aligns with Türkiye’s efforts to harmonize its regulations with those of the European Union (EU), as mandated by Türkiye’s Customs Union agreement with the EU.

TRANSITION TO COMMERCIAL PET FOOD GAINING MOMENTUM AMONG PET OWNERS

Due to limited awareness regarding the dietary requirements of pets and varying household incomes, the prevalent practice in Türkiye has been to feed most dogs and cats with table scraps. Nevertheless, a noticeable shift has occurred in recent years, with an increasing number of pet owners opting for commercial pet food. Figures reported by USDA suggest that commercial pet food is now consumed by approximately 35 percent of cats and 20 percent of dogs in Türkiye. These figures are anticipated to climb steadily in the foreseeable future as the economy strengthens and more pet owners recognize the significance of a balanced diet for their companions.

In Türkiye, commercial pet food offerings predominantly come in two forms: dry (packaged in bags) or wet (available in cans or pouches). Moreover, there’s a budding trend among affluent pet owners towards the “raw pet food diet.” This entails the processing of various food items like meat, vegetables, and fruits, which are then sold either fresh or frozen. Despite its potential benefits, the adoption of raw pet food remains limited due to its higher cost and a general lack of consumer awareness.

PET FOOD PRODUCTION DOUBLES IN TWO YEARS

Türkiye’s domestic pet food production, as highlighted in recent reports by the USDA, demonstrated remarkable growth within a short span of two years, doubling from under 90,000 metric tons in 2019 to nearly 200,000 metric tons by 2021. By 2022, production surged even further to reach 225,000 metric tons. This substantial increase in production over recent years can be predominantly credited to the expanding trend of pet ownership, which was already gaining momentum prior to the surge in Turkish households acquiring pets during the pandemic.

The burgeoning potential of the Turkish pet food market has attracted significant attention from both domestic and international firms, leading to substantial investments in local manufacturing and distribution facilities in recent years. Many of these ventures heavily rely on imported ingredients to formulate their pet food products, as local resources are limited in supply. Turkish pet food manufacturers utilize a diverse range of ingredients sourced from chicken, fish, sheep, and cows, which encompass various components such as meat waste (e.g., bones, tendons, skin), bone and blood meals, and offal. The selection of these ingredients is often interchangeable, depending on factors like availability, cost, and the specific technical requirements of the final product. Given the insufficient local supply, a significant portion of these ingredients is sourced from international markets.

Chicken stands out as the predominant animal protein in Türkiye’s pet food industry, primarily due to its cost-effectiveness compared to other animal proteins. Mechanically deboned meat (MDM), particularly chicken MDM sourced domestically, is a key component utilized in the production of wet pet food items. However, ruminant-based MDM is not accessible as it is predominantly reserved for human consumption. Importantly, the Turkish Ministry of Agriculture and Forestry (MinAF) has enforced a prohibition on MDM imports, further solidifying the reliance on domestic sources, particularly chicken, for pet food production. 

In Türkiye’s pet food manufacturing landscape, plant protein plays a significant role alongside animal protein sources. Grain by-products, including rice flour, corn flour, wheat flour, rice bran, and wheat bran, are extensively utilized ingredients in pet food formulation. Moreover, there’s a growing trend among manufacturers to incorporate vegetables into pet food products, particularly in the realm of raw pet food offerings. Additionally, various essential vitamins and minerals are supplemented in most pet food products to cater to the specific nutritional needs based on the age and health condition of the animals.

HIGH PRICES DAMPEN HOUSEHOLD DEMAND FOR PET FOOD

Despite the ongoing growth in Türkiye’s pet food production, there has been a noticeable downturn in demand for both imported and domestically produced pet food over the past year. This decline can be largely attributed to the high prices of quality pet food and the challenging economic conditions prevailing within the country. For instance, the cost of a 15-kilogram bag of imported premium pet food, priced at approximately $69, and locally manufactured pet food, priced at around $30, has surged by 90 percent and 60 percent, respectively, since 2021. This sharp increase in prices has posed significant challenges for many households in meeting the nutritional requirements of their pets.

The soaring prices of pet food in the local market stem from a variety of factors. These include domestic inflationary pressures, a scarcity of domestic raw materials essential for pet food production, elevated input costs such as electricity, transportation, and labor expenses, overly stringent regulations governing pet food production, and the imposition of taxes.

Due to the inadequate availability of raw materials required for pet food production, Türkiye relies on imports for its pet food ingredients. However, with the depreciation of the Turkish Lira against the U.S. dollar, these imported ingredients, as well as finished pet food products, have become relatively more costly for Turkish companies.

Another significant factor contributing to the high cost of dog and cat food is the 18 percent Value Added Tax (VAT) imposed on these products, categorizing them as luxury items. Despite petitions from animal associations and pet food importers urging the government to reduce the VAT on dog and cat food to 8 percent, these efforts have been unsuccessful thus far. In contrast, most animal feed and other pet food items, such as bird and fish food, are subject to zero or 1 percent VAT, with only a few exceptions.

BIOTECH REGULATIONS IN TÜRKIYE HAMPERGROWTH IN PET FOOD PRODUCTION

Pet food is subject to stringent regulations in Türkiye, aligning with EU standards and regulations. MinAF meticulously oversees the entire process of pet food production or importation to its sale in the market. However, importers have raised concerns regarding the high cost of sampling and testing fees, as well as the lack of uniformity in inspection procedures across different ports.

According to insights from industry analysts, a significant regulatory hurdle faced by the pet food industry in Türkiye, as corroborated by the USDA’s findings, is the restriction on the utilization of plant materials derived from biotechnology. This restriction applies to both finished pet food products and ingredients, regardless of whether they are imported or domestically sourced.

INCREASED IMPORT AND EXPORT ACTIVITY INTÜRKİYE’S PET FOOD INDUSTRY

Data from the USDA indicates that the surge in demand for dog and cat food in Türkiye over the past decade has been accompanied by a notable increase in domestic production. However, the surge in demand has outpaced domestic production capacities, resulting in a notable rise in the importation of pet food. Over the last five years (2018-2022), imports of dog and cat food have doubled both in terms of value and volume. See chart below. Notably, in 2022 alone, pet food imports witnessed a year-over-year growth exceeding 30 percent, reaching 77,000 metric tons valued at $136 million. France, Hungary, and Serbia emerged as the top three suppliers during this period.

Chart 1: Turkish Pet Food Import Value by Countries, USD (Source: Trade Data Monitor, LLC)

Royal Canin and Nestle-Purina represent the primary brands exported from France and Serbia, respectively, catering to discerning middle to upper-income households who prioritize and are willing to invest in premium-quality pet food. These brands are renowned for their high-quality formulations and are favored by pet owners seeking top-tier nutrition for their beloved companions. Conversely, pet food from Hungary is generally perceived as medium-quality, tailored for middle to lower-income households and animal shelters.

Chart 2: Turkish Pet Food Imports from the United States (Source: Trade Data Monitor, LLC)

Aside from suppliers within the European Union, the United States also exports pet food to Türkiye, albeit in relatively modest quantities. In 2022, U.S. pet food shipments to Türkiye amounted to 88 metric tons, valued at approximately $490,000. One of the primary obstacles hindering U.S. pet food sales in Türkiye is the stringent biotech requirements imposed by the country, particularly concerning plant-derived ingredients. Furthermore, export sales face challenges due to the strength of the U.S. dollar compared to the Turkish Lira, impacting the competitiveness of U.S. products in the Türkiye market. 

Table 1. Pet Food Import-Export Balance, 2016-2022 (Source / Kaynak: Trade Data Monitor, LLC, and sector reports)

While pet food imports have seen a notable uptick, export volumes have also experienced growth as Turkish manufacturers seek to broaden their business horizons and potentially access more lucrative markets abroad. The economic uncertainties within Türkiye have spurred this diversification effort. Approximately one-quarter of pet food manufactured in Türkiye is now exported. In 2022, exports reached a record high of 62,000 metric tons, valued at $89 million, marking a substantial 57 percent increase from the previous year. The primary export destinations included Malaysia, Israel, Iraq, and the United States. This surge in exports underscores the ongoing expansion within the sector, especially when considering that Türkiye’s pet food exports amounted to less than 3,000 metric tons in 2016.

IMPORTED RAW MATERIALS DRIVE PET FOOD PRODUCTION IN TÜRKİYE

Roughly 15 percent of the ingredients utilized in pet food manufacturing are sourced from imports. The primary imported ingredients include animal by-products, poultry fats and meal, fish oil, milk-based products, and blood meal.

PET FOOD BRANDS ON THE TURKISH MARKET

Türkiye currently lacks local production of global pet food brands, necessitating their importation. Alongside these imported brands, Türkiye boasts various domestic pet food options. Leading the domestic market is Lider Pet Food, which commands approximately 80-90 percent of total pet food production within the country.

Pet Food Sales Distribution Channels

Data collected by the USDA reveals that pet food distribution in Türkiye is diversified across multiple channels, including grocery stores (33 percent), pet shops (30 percent), and online platforms (30 percent), as well as through veterinary clinics and pet shelters. Notably, online sales have been on the rise, while sales through traditional grocery stores have been gradually decreasing. Each marketing channel offers a unique assortment of pet food brands to consumers.