Pet food and human food: the perfect business marriage?

Pet food companies are attracting the human food industry thanks to the pet food market’s continued growth and strength in certain retail channels.

photo by TierneyMJ, Shutterstock.com
photo by TierneyMJ, Shutterstock.com

Our annual list of the top global pet food companies is based on revenue data from the previous year, so this year’s list reflects 2017 information. After several acquisitions to date this year, including two blockbusters, next year’s list will likely look quite different.

Names like Blue Buffalo will probably be gone, replaced by ones better known for their human food products, such as General Mills, Blue Buffalo’s new owner as of February 2018. That type of revision started three years ago with J.M. Smucker’s acquisition of Big Heart Pet Brands; our database and list kept the more familiar pet food name for a while, until Smucker's asked us to change it earlier this year.

The request could have become because Smucker's was about to go all in on pet food by also acquiring Ainsworth Pet Nutrition in early April. Pet food companies have become quite attractive to the human food industry. Besides obvious synergies deriving from the humanization of pets, which have led to shared trends in ingredients, product features and claims, the main reasons are based on business growth:

  • The US pet food market keeps increasing at about 4 percent annually, while consumers have been spurning supermarket food staples, contributing to a sales decline last year for companies like Smucker, according to Craig Giammona of Bloomberg.com.
  • Pet food brands like Ainsworth’s Rachael Ray Nutrish have turned mass market into a welcome and successful channel for products with natural and premium features and claims at a more affordable price — leading to higher pet food sales growth last year in US mass market versus pet specialty, traditionally the home of premium brands.
  • Pet food e-commerce is growing by double digits, affording these human food companies access to that wildly popular channel. Though online sales now account for only 3 percent of Smucker’s business, its e-commerce pet sales have soared by 70 percent this fiscal year, Giammona wrote.

Given these strengths and people’s ongoing love affair with their pets, it seems human food companies will continue to pine for and court pet food players, too.

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