In April 2017, PetSmart acquired Chewy, causing some brands to abandon the online pet food, treat and other product e-commerce retailer, but the two companies now will split again.
Along with refinancing PetSmart’s debt through offering secured notes, PetSmart’s leadership intends to distribute, directly or indirectly, all shares of Chewy common stock currently held by PetSmart, according to a press release. PetSmart will not own any shares of Chewy common stock, and Chewy will not be a subsidiary of PetSmart.
BC Partners led the investor group that received PetSmart’s remaining Chewy shares, reported Bloomberg. A business strategists quoted in the article said the deal should considered as positive for the group.
As separate companies, Chewy and PetSmart may have more ability to meet changing pet owner needs and demands during the ongoing COVID-19 pandemic.
Pet food sales expanding online during pandemic
The pandemic seems to have accelerated pet owners’ acceptance of e-commerce. Along with simply selling products online, the shift to e-commerce alters other aspects of pet food marketing, Lynn Dornblaser, director of innovation and insight at market research firm Mintel, said during Petfood Forum CONNECT in panel of pet food industry professional panel discussion on how the COVID-19 pandemic would affect dog, cat and other pet food market trends.
The real opportunity for companies is to find all the different ways that they can get their products out there in front of consumers, she said. Whether it's online or in store, pet food companies need to use the best aspects of each way to communicate what's important about their products.
“That might be optimizing what it looks like on screen, or using an online platform to talk in a lot of detail about the products themselves,” Dornblaser said.
While e-commerce takes ground from brick-and-mortar, mass market and pet specialty retailers will continue to see changes in the products they offer.
“We've all seen over the last half a dozen years or so, the pet food aisles’ overall massive expansion,” Max Davis, business unit manager for Waldner Americas, a laboratory and other equipment supplier.
With that overall expansion, certain varieties gained shelf space relative to others:
- wet pet food in cans
- growing pet food aisle for dry pet food
- exponential expansion for wet pet food in caps and trays
Davis also sees superpremium fresh, such as frozen and refrigerated pet food, growing.