After a tumultuous and media-scrutinized year, our industry has seen plenty of changes. Some things, however, remain relatively consistent, like the 10 companies that lead the petfood industry in global sales. But just like the March 2007 recalls and the resulting push of fresh, organic and natural products, there's always room for a few surprises. Although most companies profiled are familiar names, two Brazilian companies have entered the ring.
The latest information from Euromonitor International shows the continued growth of the global petfood market since 2001 (Table 1). As of fall 2007, worldwide dog and cat food sales stood at US$45.12 billion, a 4.9% increase over the previous year. Euromonitor projects this growth to continue at a compound annual rate of 2.9%, reaching about US$52 billion by 2012.
For overall market sales, research companies like Euromonitor are able to provide data close to real-time. For individual company sales and market shares, data lags by a year. Thus, Tables 2 and 3 present the top 10 global petfood companies by sales and growth, respectively, as of the end of 2006.
1. Mars Petcare
World headquarters: McLean, Virginia, USA (Mars Petcare: Franklin, Tennessee, USA)
Approximate 2006 global retail sales: US$10.71 billion
Officers: Doug Cahill, president, Mars Petcare US
Top brands: Pedigree, Cesar, Sheba, The Goodlife Recipe, Whiskas, Greenies, Royal Canin
New products: Cesar Gourmet Filets in sauce, WholeMeals for Dogs, Multi-pack Whiskas Favourites and Fisherman's Choice (UK)
Websites: www.mars.com ; www.marspetcare.com
Mars Petcare, the pet division of Mars Inc., continues to grow by relying on innovation and leveraging the expertise within its Waltham Centre for Pet Nutrition. Sales across its core brands, such as Pedigree, Cesar and Whiskas, have remained strong, Mars says. The introduction of the Goodlife Recipe was the largest brand launch in Mars Petcare US history, according to the company, and the line has performed well.
That launch contributed to Mars' earning the number two spot for new dog products in 2007 and the number one spot for new cat products (Table 4). The company also launched two Whiskas steam-cooked 12-pack cat foods exclusively to UK independent retailers in late 2007. WholeMeals for Dogs is the first single-piece meal designed for dogs, according to Mars, and will be available at pet specialty retailers in the US in February.
The company asserts all its products, branded and private label, undergo industry-leading testing and quality control, and its stringent quality program extends to its supply chain.
2. Nestle Purina PetCare
World headquarters: Vevey, Switzerland (Nestle Purina PetCare: St. Louis, Missouri, USA)
Approximate 2006 global retail sales: US$10.48 billion
Officers: W. Patrick McGinnis, CEO, Nestle Purina PetCare; Terence Block, president, PetCare NA; Rock Foster, CFO
Top brands: Purina, Friskies, Alpo, Beggin' Strips, Beneful, Busy Bone, Fancy Feast, Mighty Dog, Pro Plan, Bakers, Felix, Go Cat, Gourmet Gold, Vital Balance, Vitalife, Cheweez, DeliCat, TBonz, HiPro
New products: Friskies dry food line: Seafood Sensations, Indoor Delights, Signature Blend, Feline Favorites; Pro Plan Dry Senior Cat Food
Websites: www.nestle.com ; www.purina.com
Successful new products, such as the expanded Friskies dry cat food line, as well as a continued emphasis on innovation based on humanization secured Nestle Purina Petcare (part of Nestle SA) another flourishing year. It was the number one company for new dog products and number two in new cat products (Table 4).
With 24% of the total market share in 2006 (Table 2), Nestle is focusing development on niche markets. The Pro Plan Dry Senior Cat Food line is an example, specially designed for aging and elderly cats.
Premium and superpremium brands have been driving growth in the UK. Top performing brands include Pro Plan and Bakers Complete. Eastern Europe is another growth area for the company, where in August NestlÃ© Russia announced plans to open a factory in Vorsino, Kaluga Region.
3. P&G Pet Care
World headquarters: Cincinnati, Ohio, USA (P&G Pet Care: Dayton, Ohio, USA)
Approximate 2006 global retail sales: US$2.86 billion
Officers: A.G. Lafley, CEO and chairman
Top brands: Eukanuba, Iams
New products: Eukanuba Healthy Extras Puppy Growth Biscuits, Eukanuba Mature Care Formula for Cats, Iams Premium Protection for Dogs and Cats, Iams Healthy Naturals, Iams Digestive Care for Cats
Websites: www.pg.com ; www.eukanuba.com , www.iams.com
Since the pet food recalls last March, Procter & Gamble's shares in the pet segment have been down, running 1 to 1.5 share points lower since the four weeks ended February 24, 2006, the last period before the crisis. "Unfortunately, even though these wet and semi-moist products are less than 10% of our product line, we frankly got hit pretty hard," stated A.G. Lafley, P&G CEO and chair.
Even though P&G's larger dry food business was unaffected by the recall, many have speculated, due to dropping sales and shares, that P&G may sell their Iams and Eukanuba brands.
P&G Petcare managed a healthy US$2.86 billion in retail sales in 2006, with a strong showing in new product launches in both dog and cat food (Table 4). Iams Premium Protection line for Dogs and Cats, launched in August 2007, boasts offerings for eight of the top 10 dog health problems and seven of the top 10 cat health problems with a barrage of ingredients and antioxidants, according to P&G.
4. Hill's Pet Nutrition
World headquarters: New York, New York, USA (Hill's Pet Nutrition: Topeka, Kansas, USA)
Approximate 2006 global retail sales: US$2.77 billion
Officers: Robert Wheeler, Hill's Pet Nutrition CEO; Neil Thompson, Hill's Pet Nutrition president of Americas; Janet Donlin, Chief Veterinary Business Channel
Top brands: Hill's Science Diet, Hill's Prescription Diet
New products: Science Diet Nature's Best Canine petfood, Prescription Diet Canine and Feline Treats
Websites: www.colgate.com ; www.HillsPet.com ; www.HillsVet.com
Employees: Over 2,800
With companies outside of North America growing the most, Hill's Pet Nutrition still managed 8.8% in growth from 2005 to 2006 and an overall growth rate of 60.9% since 2000 (Table 3). Hill's says its keys to expansion are building and strengthening relationships in the veterinary profession and continuous innovations and improvements in wellness and therapeutic pet food nutrition. Hill's also announced plans to build a new manufacturing plant in Emporia, Kansas, USA.
Less than 1% of Hill's products were affected by the recalls, and the company strives to remain known for the highest quality and safety standards. After the recalls it added additional safety checks on raw materials and finished products prior to release.
This past year Hill's relaunched Science Diet Nature's Best Canine pet food and introduced Prescription Diet Canine and Feline Treats.
5. Del Monte Pet Products
World headquarters: San Francisco, California, USA
Approximate 2006 global retail sales: US$1.67 billion
Officers: Richard G. Wolford, chairman of the board, president and CEO; Jeff Watters, Del Monte Pet Products senior vice president
Top brands: Meow Mix, Kibbles n' Bits, 9Lives, Milk-Bone, Pup-Peroni, Pounce, Wagwells, Gravy Train, Jerky Treats, Canine Carry Outs, Snausages, Nature's Recipe, Alley Cat, Meaty Bone
New products: Nature's Recipe Farm Stand Selects, Kibbles n' Bits Brushing Bites Dog Food
Although Del Monte's shares dipped US$0.73, or 7.5%, the company had an astounding 57.6% growth from 2005-2006 (Table 3). The company produced second-quarter earnings per share of 13 cents vs. 11 cents last year. Sales rose 5% with growth in new pet food offerings. Del Monte is hoping competitors in the industry push through a price hike early this year to offset the rising costs of grains used in brands such as their Meow Mix and Kibbles n Bits brands.
Del Monte's net sales for the year ended April 29, 2007, were US$1.3 million, an increase of 50% compared to fiscal year 2006. The increase was driven by volume gains primarily due to continued momentum of Meow Mix cat food and Milk Bone dog treats. Growth from new products and net pricing actions also positively contributed to the increase in net sales, with 16 SKUs in new cat food products (Table 4).
6. Affinity Petcare SA
World headquarters: Barcelona, Spain
Approximate 2006 global retail sales: US$0.59 billion
Officers: Carlos ArgentÃ©, CEO/VP marketing; Franc Andreu, operations managing director; Frances Blanch, VP R&D; Patricia Larumbe, VP business development
Top brands: Affinity, Ultima (UK), Brekkies, Brekkies Excel (cat), Advance, Advance Veterinary Diets, Premium Dog
New products: Special Care Urinary Tract Health, Special Care Hairball Control (both for cats)
Affinity Petcare, a division of Agrolimen SA, says it is committed to the following values: imagination, innovation, flexibility and a scientific and systematic approach. The company offers a wide range of products, from special veterinary diets to super-premium foods to value-priced products for cats and dogs.
Affinity products are distributed mainly in the European Union, but the company is building a distributor network within the fast-growing Eastern European pet food market, too.
Besides expanding distribution, Affinity's growth strategy is based on new product development and strong promotion efforts. Its new Special Care cat foods draw on expert veterinarians and nutritionists, the company says, to treat specific conditions such as urinary tract health and hairballs. Both are dry diets.
7. Nutro Products Inc.
World headquarters: City of Industry, California, USA
Approximate 2006 global retail sales: US$0.56 billion
Officers: David Kravis, CEO; Mike Satterwhite, executive vice president; Ladd Hardy, senior vice president, marketing
Top brands: Max Dog, Ultra Dog, Natural Choice Dog, Max Cat Gourmet Classics, Natural Choice Complete Care Cat
New products: Ultra Large Breed Puppy and Adult; Natural Choice: Sensitive Skin & Stomach Formulas, Complete Care Indoor Kitten & Weight Management, Senior Brown Rice & Lamb Meal, Dog Healthy Desserts, Small Bites Lite & Senior
Websites: www.nutroproducts.com ; www.ultraholistic.com
Nutro Products Inc. was purchased in May 2007 by Mars Inc., but for the sales reporting period used in this article, Nutro was still a separate company. The company prides itself on using natural ingredients, making foods pets drool over and thrive on, and being at the forefront of research. Though affected by the March 2007 recalls, it has since stepped up its safety and testing programs to prevent future incidents.
Since the introduction of its Max line in 1985, Nutro has expanded the dog food line to include a variety of products for every stage of a dog's life and a full line of foods for cats. The popular Natural Choice line now includes treats and biscuits as well as wet foods for both dogs and cats.
Nutro experienced growth in its superpremium holistic brands with new products such as Natural Choice Complete Care Indoor Kitten & Weight Management.
8. Unicharm PetCare Corp.
World headquarters: Tokyo, Japan
Approximate 2006 global retail sales: US$0.29 billion
Officers: Toshio Takahara, chairman; Gumpei Futagami, president/CEO
Top brands: Aiken Genki Gin no Sara, Neko-Genki Silver Spoon, Gaines Pakken
New products: Ginno Sara for Dogs 10 years and older, Fukkura Dry for Dogs 10 years and older, Gainer Pakken White Meat Chicken, Ginno Spoon Retort Pouch, Ginno Sara Kyono Gohobi (treats)
Number of employees: 180
Unicharm PetCare Corp. is a division of Tokyo-based conglomerate Uni-Charm Corp. and is continuing to take advantage of Japan's steadily growing pet population of 25 million companion animals. The company believes the key to its continuing rise is a strong emphasis on four trends: indoor cats and dogs, small dogs, overweight animals and the aging pet population. To differentiate itself from other fast-growing Japanese pet food manufacturers, Unicharm emphasizes the speed of converting consumer needs into products and applying technology to premium foods.
Unicharm is betting on pet humanization to drive consumers to more premium and superpremium products like its new semi-moist dog food Gaines Pakken White Meat Chicken and Ginno Spoon Retort Pouch, a wet cat food.
Since Gumpei Futagami became president and CEO of the company in 2001, the pet division has grown 13%-14% annually. To continue a healthy growth, Unicharm faces challenges in improving product quality, safety consciousness and gaining profits in an environment where raw materials are increasingly expensive.
9. Total Alimentos SA
World headquarters: TrÃªs CoraÃ§Ãµes, Brazil
Approximate 2006 global retail sales: US$0.20 billion
Top brands: Big Boss, Big Boss Nuggets, Lider, FamÃlia Max, K&S, Nero, EquilÃbrio, Supreme, Snacks
New products: Supreme CÃ£es SensÃveis, FeitiÃ§o Bolas de PÃªlos, Nero RefeiÃ§Ã£o, LanÃ§amento Big Bom, Kitute Higiene Bucal
New this year to the Top 10 profiles, Total Alimentos SA is a Brazilian-based company operating from its facility since 1974. The company's single objective: to provide consumers innovative products with high levels of technology.
Total Alimentos credits investments in technology, research, new ingredients and communication with customers as reasons it currently occupies such a prominent position in the production of food for dogs and cats in Brazil and worldwide. From 2005 to 2006 the company experienced a strong 30.4% growth rate, with overall growth of over 200% from the year 2000 (Table 3).
With pioneering technologies in palatability of dry and wet foods, Total Alimentos prides itself on modern and exclusive processes. The company also claims to be the only pet food manufacturer certified in ISO 9001, GMP and HACCP. Total Alimentos thinks these programs contribute to the controls of its processes and products, ensuring consumers safe and reliable pet food, since they comply with multiple international standards of food safety.
10. Nutriara Alimentos Ltda.
World headquarters: Arapongas, ParanÃ¡ State, Brazil
Approximate 2006 global retail sales: US$0.20 billion
Top brands: Foster, Freddy's, Bybo, Dog Show, Blog Dog, Dog Friends, Tommy, Fulldog, Floop, Dunga, Ringo, Pitoko Mix, Pitty, Bidu, Street Dog, PitukÃ£o Pitukinha, Gatto, Street Cat, Blog Cat, Clean Cat, Pitukats
New products: Dog Show Gourmet, Dog Friends Dry food, Gatto Meat, Fish & Mix
The second new petfood company from Brazil to appear on our list, Nutriara Alimentos Ltda. was founded in 1991. Initially production was directed at birds, pigs, bovine and equine breeders. It wasn't until 1996 that the company opened the pet segment of its business, but it took little time for Nutriara to secure a position in the competitive pet food market.
Nutriara expanded its activities and facilities, changed over its production lines and began focusing its investments solely on pet food. Since 2000, the company has experienced 72.3% in growth (Table 3) and doesn't plan on slowing down any time soon. With an enormous range of products for both cats and dogs, many of which are top sellers, the company strives to offer pet products for animals of all ages, sizes and special health needs.
Currently, Nutriara products can be found in every region of Brazil, as well as Argentina, Uruguay, Paraguay and Chile. Focusing on increasing production, the company has recently built another facility in Uruguay. Nutriara has also formed a partnership with Cargill Animal Nutrition and is preparing to take on the rest of the world, one piece of kibble at a time.
By Lindsay Beaton
This country is straddling the line between developing and developed as more of its citizens see the value in pet ownership.
By Lindsay Beaton