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 1,100 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

47 million annually. A typical pet food manufacturer employs fewer than 20 workers and generates $81 million annually.

    • The pet and animal food manufacturing industry consists of about 1,100 companies that employ 71,500 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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jan 17, 2024 - Sales Fall, Employment Steady
                                • Sales for the food industry, including pet and animal food manufacturers, were flat in the second quarter of 2023 compared to the previous quarter and fell by over 3% compared to a year ago. Food product shipments grew modestly in the third quarter of 2023 compared to 2022 while inventories remained mostly flat. Producer prices for pet and animal food manufacturers grew in the first few months of 2023 before trending downward after mid-year as inflation declined. Employment levels in the industry have stayed relatively steady throughout 2023.
                                • US manufacturing activity contracted in December 2023, falling below the baseline for growth for the fourteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.4% in December, up from the 46.7% recorded in November. A reading above 50% indicates manufacturing expansion. December’s New Orders Index remained in the contraction zone at 47.1%. The December Production Index was 50.3%, up from November’s 48.5%. Only one manufacturing industry tracked by the ISM reported growth in December: Primary Metals. The industries reporting contraction in December were Printing & Related Support Activities; Apparel, Leather & Allied Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; Textile Mills; Petroleum & Coal Products; Paper Products; Wood Products; Fabricated Metal Products; Computer & Electronic Products; Miscellaneous Manufacturing; Furniture & Related Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Chemical Products.
                                • A new report by NIQ shows that consumers increasingly use sustainability as a deciding factor when choosing a brand, according to Pet Food Processing. NIQ (formerly NielsenIQ) recently released its "Green Divide" report, examining consumers' views and behaviors related to sustainability. About 70% of consumers say sustainability is more important when selecting products now than it was two years ago. When ranking the factors behind their purchasing choices, price (18%) was ranked first by consumers, followed by safety and hygiene (13%), healthier options (13%), environmental friendliness and sustainability (11%), and trusted/familiar brands (11%).
                                • The Association of American Feed Control Officials (AAFCO) recently approved new consumer-friendly pet food labeling guidelines designed to align better with human food labeling and be more consistent and transparent with nutritional information, according to AVMA.org. The first significant update in over 40 years includes four primary areas of change to the label: the Nutrition Facts Box, Intended Use Statement, Ingredient Statement, and Handling and Storage Instructions. The changes were developed by feed regulatory professionals in the US and Canada and were part of the AAFCO’s “Pet Food Label Modernization” project, which began eight years ago. The AAFCO is advocating for a six-year implementation period for the new labels.
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