Mars Inc. is set to purchase Procter & Gamble's petfood brands, including Iams, Eukanuba and Natura, for US$2.9 billion, according to reports. P&G is leaving the pet care market to focus more on its core brands, and the transaction will solidify Mars as the world's biggest petfood company.
Mars did not take on P&G's European business, but it has an option to buy operations in remaining markets in Asia and Africa, said P&G spokesman Paul Fox. The company plans to actively pursue the sale of its European pet care business, he said.
"The announced deal is not a surprise in view of P&G’s declining share," said Paula Flores, head of Euromonitor International's Pet Care division. "P&G is the fourth global player with a global value share 3.6%, down from 4.2% in 2008. Despite the good position in the premium segment of the North American dog and cat food market, where it accounts for 19% of value sales in 2012, this figure stood at 24% as recently as 2008. The company faced two voluntary recalls for its superpremium Natura, Iams and Eukanuba brand during 2013. Moreover P&G has a weak performance in most emerging markets."
The deal is expected to be complete in the second half of the year.
As an industry, are we missing a huge opportunity to take advantage of another aspect of the human-pet bond?
While petfood shoppers continue to show strong brand loyalty, pet products have not been immune to the store brand swing
Now is the time for packagers, producers, marketers and manufacturers to capitalize on the traveling with pets trend
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