Pet & Animal Food Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,200 pet and animal food manufacturers in the US produce food for pets and other animals, such as livestock and birds. Product categories include animal feed (cattle, swine, poultry), dog food, cat food, specialty feeds (birds, fish, rabbits, laboratory animals), and rendering and meat byproducts. Animal feed manufacturers account for 74% of companies and 61% of industry sales.
Food Safety
Outbreaks of serious diseases and contaminants related to food safety have affected the livestock production and pet product industries, including pet and animal food manufacturers.
Variability In Raw Materials’ Costs
With narrow margins, pet and animal food manufacturers often struggle to deal with volatile raw materials’ costs.
Industry size & Structure
A typical pet food manufacturer employs fewer than 20 workers and generates $55 million annually.
- The pet and animal food manufacturing industry consists of about 1,200 companies that employ 73,500 workers and generate about $66 billion annually.
- Animal feed manufacturers account for 74% of companies and 61% of industry sales. The poultry and swine industries are the largest consumers of animal feed.
- Pet food manufacturing is highly concentrated, with the top 20 companies accounting for 86% of sales. Animal feed manufacturing is less concentrated, with the top 20 companies accounting for about 50% of sales.
- Large animal feed companies include Land O'Lakes, Cargill, and Archer Daniels Midland. Most major pet food brands are owned by large consumer products companies, such as Mars (Pedigree, Iams), Nestle (Purina), and Colgate-Palmolive (Hill's Science Diet).
Industry Forecast
Pet & Animal Food Manufacturers Industry Growth
Recent Developments
May 24, 2024 - Sales Up in 2023
- Pet food and treats sales were up 10.8% in 2023, reaching $64.4 billion and accounting for almost 44% of all US pet industry sales, according to the recent State of the Industry report from the American Pet Products Association (APPA). Overall pet industry sales were $147 billion in 2023, an increase of 2.7% over the previous year. According to the APPA, $38.3 billion was spent on vet care and product sales, $32 billion was spent on supplies, live animals, and OTC medicine, and $12.3 billion was spent on “other services” including boarding, training, grooming, pet sitting, and other services in 2023. The pet industry is expected to stay strong over time, with pet industry sales to reach $230 billion by 2030 per the APPA.
- US manufacturing activity contracted in April 2024 after a brief expansion in March, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 49.2% in April, down 1.1 percentage points from the 50.3% recorded in March. A reading above 50% indicates manufacturing expansion. Prior to March’s expansion, US manufacturing activity had fallen below the baseline for growth for 16 consecutive months. April’s New Orders Index was in the contraction zone at 49.1%. The April Production Index was 51.3%, a decrease from March’s 54.6%. Nine manufacturing industries tracked by the ISM reported growth in April: Nonmetallic Mineral Products; Printing & Related Support Activities; Primary Metals; Textile Mills; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Chemical Products; and Plastics & Rubber Products. The industries reporting contraction in April were Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Paper Products.
- Pet and animal food manufacturers may be affected by higher container freight rates caused by disruptions in the Red Sea that are expected to continue for the rest of 2024, according to a recent Wall Street Journal report. Continuing attacks by Iran-backed Houthi rebels are causing diversions around the region. As a result, container freight rates have increased about 30% in recent weeks, with most ship owners and brokers diverting large container ships from the Red Sea. The Red Sea serves as the entry point for ships to the Suez Canal on trips from Asia to Europe. According to the article, most of the diverted ships go around the Cape of Good Hope in South Africa, which adds about 2.5 weeks to the trip. Import volume is expected to increase in Q3, when retailers typically stock up for the holiday season.
- According to a new ConsumerWise report from McKinsey, consumers continue to “trade down,” changing the type or quantity of purchases for better pricing and value, in Q1 2024. About 76% of respondents reported engaging in trade-down actions in Q1 2024, compared to 77% in Q4 2023. Younger consumers tended to trade down more often than older consumers, while low and middle-income consumers traded down more frequently than high-income consumers, per the report. The report also shows that the percentage of consumers using the “buy now, pay later” option has remained mostly the same in Q1 compared to the previous quarter. Additionally, fewer consumers are delaying their purchases, with only 30% doing so in Q1 compared to 35% in Q4.
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