Read about past petfood M&A at www.petfoodindustry.com/6994.html.
Petfood is a concentrated, top-heavy market, with the top two companies alone (Mars Petcare and NestlÃ© Purina PetCare) accounting for nearly 50% of sales. The top 30 companies comprise at least 70% of the market (see p. XX). Much of that concentration is due to continued merger and acquisition (M&A) activity, which never really slowed down during the global recession and has really heated up in the past few years. Expect it to continue this year and beyond.
"The private equity community has developed a modest fascination with the pet industry over the past five years," wrote Bryan Jaffe, senior vice president for Cascadia, in 2011. "Interest has accelerated markedly since 2007, as evidenced by deal volume. Notably, deal volume grew from 2009-2010 in contrast to the broader consumer marketplace, which contracted."
For proof, just look at the list Pets International magazine keeps updated on its website, www.petsinfo.net/m&a. While it covers M&A transactions for the entire pet care industry, you'll notice many petfood-related ones as you scroll down the list.
To recap petfood M&A activity of significance over just the past two years:
Del Monte's last announcement, while more of a divestiture than true M&A, makes this list because it represents a major player's overt intent to push for a larger share of the petfood market. In fact, with Procter & Gamble telling investors in September that it is seeking to sell its under-performing business units, likely including its petfood brands-Iams, Eukanuba and Natura-speculation arose that Del Monte could make a bid for one or even all three brands. (Incidentally, all were acquisitions for P&G, the latter occurring just in 2010.) That type of deal would constitute a major shake-up of the petfood competitive landscape.
None of this activity even touches on the rampant consolidation happening in the pet retail distribution sector in the US and Europe. US distributor consolidation will be discussed during Petfood Forum 2014, one of three new discussion sessions debuting next year. Find more information at http://www.petfoodindustry.com/49727.html.