Mergers and acquisitions in the pet food industry slowed during the ongoing pandemic, which has killed 1,612,372 globally as of Dec. 15. By the end of the third quarter of calendar year 2020, merger and acquisition activity in the pet food sector had declined 10.3% compared to the same period in 2019, according to Capstone Headwaters report “Pet humanization accelerates through COVID-19.” However, the pet food industry’s decline paled in comparison to that of overall M&As at 40% in the same period, suggesting the pet sector continues to prove resilient to economic and social disruption. Private equity purchases made 51% of deals in the pet care sector during the first three quarters of 2020.
“We anticipate seeing more M&A transactions that will mimic the outcome of C.J. Foods purchase of American Nutrition,” Tom Elliott, managing director of Capstone Headwaters said in the report. “More specifically, the transaction created a national footprint and a single source for dry, baked, and extruded pet food. There are large private label producers with one or two manufacturing methods in-house. We expect to see M&A activity that creates one-stop shopping of a broader set of products in the treat as well as food space.”
3 characteristics pet food M&A buyers look for in pandemic
Omnichannel pet food sales have become particularly crucial as more pet food shoppers have shifted online, Elliott wrote, and future acquisitions may involve brands that know how to please customers online. As a corollary to the overall growth of pet food e-commerce, subscription services grew steadily during the pandemic, especially among millennials.
In 2020, the COVID-19 pandemic altered the character of mergers and acquisitions in the pet food industry as buyers may have looked for brands plugged into the new normal of e-commerce, remote work and social distancing. Dog, cat and other pet owners shifted buying channels rapidly as movement restrictions limited brick-and-mortar buying options, especially boosting internet sales. While pet food brands tended to withstand the pandemic’s economic fallout better than travel and food service industries, the pandemic disrupted and altered projections. Although the future remains difficult to forecast, these mergers and acquisitions occurred in the pet food industry this year among makers and suppliers.
January 10, 2020
United Petfood, international dog and cat food producer, acquired Italian company Effeffe Petfood.
January 24, 2020
Empresas Iansa’s sale of its pet food business to Camil of Brazil represents 20% of Chile’s pet food consumption and strengthens Brazil’s position in Chile.
January 27, 2020
Whitebridge Pet Brands, a maker of natural and minimally processed pet foods, treats and complements, completed the acquisition of Cardinal Laboratories, Inc.
February 28, 2020
C.J. Foods, superpremium pet food manufacturer, will benefit from a wide geographic footprint and massive production volume, once C.J. completes the acquisition of American Nutrition.
March 27, 2020
Increasing numbers of remote workers may create opportunities for dog, cat and other pet food companies, as pet owners spend more time at home with their animals.
April 1, 2020
Lily's Kitchen recently expanded into the Middle East and Asia and already has a growing presence in France, Spain, Italy, Netherlands, Switzerland and Germany.
April 13, 2020
The site currently manufactures the IAMS and EUKANUBA brands and will continue to do so. United Petfood merely is taking over the plant.
April 30, 2020
Aliments Alternatifs 2000 inc. and its registered brand Karnivor were founded in 1999 with the mission of providing animals with food adapted to their physiology and that aligns with their carnivorous nature.
May 6, 2020
International pet food producer United Petfood signed a letter of intent for the acquisition of Jonker Petfood in Waalwijk, the Netherlands.
May 11, 2020
The company announces its acquisition of pet food ingredient supplier Chicago-based Ingredients Inc.
June 9, 2020
Alphia has a portfolio of pet food and treats. The company has a national footprint of 10 locations across 6 states.
June 12, 2020
Austrian-based Erber Group offers DSM the opportunity to enter the mycotoxin risk management market.
June 23, 2020
The combination of C.J. Foods and American Nutrition into Alphia earlier this month also included LANI and Veracity Logistics.
July 7, 2020
Partner in Pet Food, based in Budapest, Hungary, announced the acquisition of Swedish pet food manufacturer Doggy and its brands Bozita, Bozita Robur and Doggy & Mjau from Lithuania-based investment company NDX Group.
August 17, 2020
Manna Pro Products acquires Doggie Dailies.
September 28, 2020
This is the first investment by IK’s newly established UK team. Financial terms of the transaction are not disclosed.
October 2, 2020
Carry Petfood was established in 1992 as Weidaer Hundekauartikel, but changed its name in 2009.
October 19, 2020
Schenck Process Group has reached an agreement to acquire Baker Perkins, a global supplier of food processing equipment and aftermarket services for pet food and other markets.
October 26, 2020
Breeder’s Choice Pet Foods, a manufacturer of specialty super-premium dry dog and cat foods, announced today it has been purchased by 30-year pet food veteran Joey Herrick and is becoming an independent business once again.
October 28, 2020
Missouri, USA-based Spectrum Brands acquired Armitage Pet Care based in Nottingham, Great Britain, producer of brands Good Boy, Meowee!, Wildbird and Wafcol.
November 5, 2020
With this operation Agras consolidates its presence in the dry segment, now overseeing the entire value chain from production to market with its flagship brand Schesir.
November 11, 2020
The Carlyle Group acquired a majority stake in Manna Pro Products from investment funds managed by Morgan Stanley Capital Partners. Financial terms of the transaction were not disclosed.
November 18, 2020
Health & Happiness Group International Holdings (H&H Group) acquired St. Louis, Missouri, USA-based Solid Gold Pet for US$163 million.
November 18, 2020
Clearlake Capital Group, L.P. signed a definitive agreement to acquire WellPet, a maker of several pet food and treat brands.
December 4, 2020
The J.M. Smucker Co. announced Friday it has entered into a definitive agreement to sell its Natural Balance premium pet food business to Nexus Capital Management LP, in a cash transaction valued at approximately US$50 million.
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