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

                                Mar 26, 2024 - Prices Fall, Employment Flat
                                • Producer prices for pet and animal food manufacturers decreased steadily in Q3 and Q4 2023, after growing in the first few months of the year, according to the Bureau of Labor Statistics (BLS). Producer prices were 3.4% lower in December 2023 compared to a year ago. Employment levels in the industry have stayed relatively steady throughout 2023, remaining slightly higher than 2022. US consumer demand also grew modestly, with cash-strapped shoppers being more selective with their purchases, per the Bureau of Economic Analysis. Food product shipments and inventories, including pet and animal foods, were both flat in September 2023 compared to the previous year, according to data from the Census Bureau.
                                • 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.
                                • US manufacturing activity contracted in February 2024, falling below the baseline for growth for the sixteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.8% in February, down 1.3 percentage points from the 49.1% recorded in January. A reading above 50% indicates manufacturing expansion. February’s New Orders Index was in the contraction zone at 40.2%. The February Production Index was 48.4%, a decrease from January’s 50.4%. Eight manufacturing industries tracked by the ISM reported growth in February: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment. The industries reporting contraction in February were Furniture & Related Products; Machinery; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; and Electrical Equipment, Appliances & Components.
                                • 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%).
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