The announcement on November 1, 2022, that Mars Petcare is acquiring Champion Petfoods was significant, though certainly not surprising. Going back nearly four years, to July 2018, media such as the Wall Street Journal reported Champion being for sale, with Nestle Purina PetCare about to purchase the Canadian-based maker of premium Acana and Orijen brands.
Obviously, that never came to pass, despite discussions resuming at the end of that year; yet, just four months ago, in July 2022, Bloomberg reported that current Champion executives were again exploring options for a sale. At the time, the report said the asking price was US$2 billion. While details and terms of the actual transaction on November 1 were not available, presumably Mars presented the best option and offer—also no surprise.
Mars adds to organic pet food growth with acquisitions
Considering Mars’ status as a private company, it’s, again, not surprising that no terms of the deal are available yet, if they ever will be. Mars’ overall company revenue, as well as that of Mars Petcare, is not exactly known; admittedly, the figure we include in our Top Pet Food Companies Database (US$1.9 billion in 2021) is an estimate based on several sources and reports, including historical ones. Yet there’s no doubt that Mars’ revenues continue to grow.
For one thing, nearly every pet food company, especially in developed markets, is seeing sales and revenue growth thanks to increases in pet ownership in some countries, inflation-fueled price hikes and, perhaps the chief reason, pets’ firmly established status as full-fledged members of their families. With its many brands and lines of pet food, Mars is well positioned to take advantage of those market dynamics.
And, Mars keeps buying other pet food companies, especially those with brands and formats not as well represented in its own “homegrown” portfolio. It kicked off 2022 by acquiring Nom Nom, a direct-to-consumer maker of fresh pet foods. (Details of that transaction weren’t disclosed, either.)
The Nom Nom acquisition, plus now that of Champion, pushes the number of pet food brands under the Mars umbrella to at least 50. What remains to be seen is how Acana and Orijen will fit among those, including how they will be managed, branded and sold. Nom Nom was placed as an “independent” brand in the Royal Canin division, alongside its eponymous brand and Eukanuba, from the Iams Co. acquisition back in 2014. (The Iams brand itself has continued on the mass market path that its previous owner, Procter & Gamble, had set it on.)
It's difficult to know now whether Nom Nom has indeed remained independent—and, if so, if the Champion brands will follow that same route. They are premium brands, even superpremium in the case of Orijen, so a place in the Royal Canin family (truly independent or not) would seem to make sense.
Last big pet food deal for 2022?
So, Mars started off the year with a bang and is ending it with another—if they are indeed done acquiring in 2022? And is the rest of the industry?
As of the end of August, more than 25 pet food mergers and acquisitions had taken place, including among supplier companies. Notable deals among pet food manufacturers and marketers, besides the Mars-Nom Nom one, included Manna Pro acquiring Oxbow Animal Health, also in January (then renaming the entire company as Compana Pet Brands). On the supplier side, Marel acquiring Wenger Manufacturing in late April drew attention.
In just the last month alone, Brightpet announced it’s buying Bravo! Pet Foods, maker of raw products, thus expanding its format portfolio as Mars did with its acquisition of Nom Nom. Is this a pattern we’ll see accelerate? Other, smaller pet food acquisitions around the world have also taken place recently. What other pet food deals might be in the works between now and December 31, 2022?
