The nature of pet food production facilities has changed, and that has made it difficult to know if the industry produces as much dog and cat food as it potentially could, according to Isaac Matthews, director of pet food ingredient division, Lansing Trade Group. However, he believes pet food facilities are producing near their economic potential.
Publicly traded pet food companies have announced expansions and infrastructure investments that may be only the tip of the economic iceberg, he said.
“About US$1.3 billion has been announced publicly in the last 5 year,” said Matthews, speaking at Petfood Forum 2017.
He believes that the real quantity may be double that amount, considering how many privately held pet food companies there are that may not announce that they are building a plant or that they are expanding internally.
Capacity utilization in the pet food industry
Matthews discussed capacity utilization, the proportion of potential economic output that is actually realized, in the pet food industry. In the past, the pet food industry was in a deficiency. However, with all the investment going on and the expansion we might be reaching equilibrium, or surplus.
“The challenging part of this is that the overall industry, what’s going into dog and cat food, has changed,” he said. “The plants we have in the past are different than what we need in the future. Old plants they called ‘brown and ground,’ corn based diets and things of that nature, feed mills, and now there’s high [meat] inclusion, specialty ingredients, raw meat, and those plants need coolers and special extruders. You have to ask the question, is that capital investment required, or is it expanding capacity.”
Although Matthews believes that the pet food industry has reached capacity utilization equilibrium, he admitted that it was just an educated guess. Changes in consumer demands have altered the industry so much that no one really knows if the production potential of the industry has been reached.
Petfood Forum 2018
To learn more about novel pet food ingredients, attend Petfood Forum 2018. Petfood Forum provides an opportunity for pet food professionals from around the world to network, exchange ideas and do business with one another and with the industry's leading pet food manufacturers and suppliers. Petfood Forum 2018 will take place at the Kansas City Convention Center in Kansas City, Missouri, USA on April 23 -25, 2018.
