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

                                May 1, 2023 - Growth Ahead for Global Pet Industry
                                • A report by Bloomberg Intelligence (BI) shows the global pet industry is currently worth $320 billion and is projected to reach $493 billion by 2030, a 54% increase, according to Pet Food Processing. The US market is expected to remain the top market, with sales expected to grow from $128.6 billion to $195.6 billion by 2030. Growth can be attributed to a focus on pet nutrition, with the increased popularity of premium pet foods supported by veterinary care, diagnostics, and pet pharmaceuticals. These actions have led to pets living longer, which has created an opportunity for more elderly-focused pet products and services. Ann-Hunter Van Kirk, senior biopharmaceutical analyst at BI and co-author of the report, said, “With this comes an increased need for spending relating to expensive healthcare for aging pets, and we project that this spending on lasting health for pets will continue to swell over the next decade.”
                                • The overall export value for feed, feed ingredients, and pet food in 2022 was $7.5 billion, and the total volume of exports of these products was 9 million metric tons, according to the American Feed Industry Association. The data, released by the US Department of Commerce, found that the top five exports by value were pet food, other feed products, alfalfa/hay, MBM/poultry meal/porcine meal, and fish meal. By volume, the top categories were alfalfa/hay, other feed products, flour/meals/pellets of meat, pet food, and feather meal. The top export countries based on value were Canada, China, Japan, South Korea, and Mexico.
                                • Petco has entered a new partnership with the Freshpet pet food company to deliver customized, refrigerated meals for dogs through an exclusive new brand, Freshpet Custom Meals, according to Forbes. The Freshpet Custom Meals will be available for home delivery through the Petco website at a cost starting at $3 per day. Dog owners will provide their dog's information, such as weight, age, gender, physical condition, sensitivities, and activity level, to receive a meal customized for their pet. The subscription plan is offered in 15 states, with the service expected to be available nationwide by the end of 2023. The fresh and frozen pet food category is expected to grow to three-to-four times its current value to $6 billion, with direct-to-consumer sales projected to drive growth, according to sources cited by Petco in the announcement.
                                • Consumer confidence levels increased slightly in March 2023 after falling for two consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index rose to 104.2 in March 2023 from 103.4 in February 2023. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Driven by an uptick in expectations, consumer confidence improved somewhat in March but remains below the average level seen in 2022 (104.5). The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over.” Plans to purchase appliances have cooled, while intentions for automobile purchases slightly improved in March 2023, per Ozyildirim.
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