FEDIAF’s Statement on Supply Shortages and Inflation
The European Pet Food Industry continues to monitor the tragic situation in Ukraine. Since the onset of the war, pet food manufacturers have been providing vital humanitarian support to Ukraine as well as addressing the needs of people and pets that have been on the move to neighbouring countries.
To add to the immediate humanitarian crisis, supply chain disruptions amidst an adverse inflationary environment continue to present the pet food industry with unprecedented challenges. Given the volatile context, FEDIAF and its member companies, in collaboration with respective public authorities and partners, have been working hard to ensure the continuity of pet food supply and mitigate challenges to avoid disruptions as much as possible.
Raw materials availability
Russia and Ukraine are key global suppliers for several raw materials crucial for pet food formulations and production. Russia is the world’s top exporter of many fertilizers and 80% of global sunflower oil exports originate from Ukraine or Russia. Given the highly volatile context, the pet food industry is currently impacted by the limited availability of these key raw materials as well as animal protein shortages. Thus, many manufacturers may need to switch to alternative oils and ingredients.
One particular challenge relates to the fact that the category of complete feeds, which make up the majority of the animal feeds produced, have to be formulated according to legal requirements in such a way to ensure all the requirements for a healthy and balanced diet for the pets. Ingredients often cannot be replaced in the formulations depending on their availability. Thus, to ensure continued food supply, pet food manufacturers have been taking appropriate measures to adjust their sourcing practices, occasionally embracing increased prices of raw materials in a low supply environment.
International logistics and supply chains
Due to the knock-on effects of the global pandemic, complex logistics challenges were already present. With the help of governments, authorities and other stakeholders our industry has navigated these challenges and continued supplying food for pets around Europe. The war has caused additional disruption to international logistics and continues to impact supply chains. Ocean shipping in the Black Sea, air-freight availability and regular shipments via existing trade lanes have become increasingly challenging. All these factors have led to a complex operating environment for pet food companies.
Inflation and energy supply
With the onset of the war in Ukraine, energy prices, as well as the cost of commodities, have soared worldwide with impacts already seen across major industries, leading to adverse inflationary pressures on the majority of input factors.
In the face of any potential energy disruptions, our industry would be severely hampered as pet food manufacturing requires a high amount of energy for the production process. Relevant savings or a switch to alternative energy as a means to compensate for any potential energy shortages are not immediately available options for manufacturers as they require long-term planning and investment.
Pet food manufacturers are taking appropriate measures to ensure supply continuity
FEDIAF members are working hard to ensure the continuity of supply for pet owners and their pets. At FEDIAF, our actions are grounded in the conviction that pets are an essential part of our society: they provide invaluable support through facilitating human interaction, increasing social connections, and providing companionship. Scientific evidence continues to demonstrate the many benefits pets can bring, not only to their owners but also to our society as a whole. This is even more important and true in the current difficult times we are experiencing, and this is the inspiration behind all our efforts as pet food manufacturers.