From 2020 to 2022, the pet care industry registered record numbers of M&A deals: 38 in pet care, pet food and veterinary services in 2022, 58 deals in 2021 and 48 in 2020.
In 2023, the industry saw its fair share of activity, but there does seem to be a downward trend this year. According to Cascadia Capital's most recent Pet Industry Overview report, pet industry M&A was muted in 2023. Sectors that drove prior year growth – supplements and veterinary services – showed volume drops, in some cases they were significant.
Save for co-manufacturing, large strategics have remained on the sidelines, ceding consolidation to the private equity community, though some of the most active consolidator platforms also remained inactive in 2023, suggesting gross margin compression and higher marketing spend are putting pressure of debt availability to finance acquisitions.
- U.S. M&A volume dropped sharply against a backdrop of economic uncertainty, global instability and lack of debt availability.
- A flight to quality continues to be evident in both M&A at large and within the pet sector. The highest quality companies – those that can evidence unit volume growth relative to dollar volume growth – continue to enjoy favorable transactions.
Below are the pet food industry mergers, acquisitions and divestitures of 2023.
1. J.M. Smucker divests iconic brands
In February, J.M. Smucker announced it was selling several pet food brands to Post Holdings, a consumer-packaged goods holding company headquartered in St. Louis, Missouri, USA. The transaction included the Rachael Ray Nutrish, 9Lives, Kibbles 'n Bits, Nature's Recipe, and Gravy Train brands as well as the Smucker’s private label pet food business. The deal was completed in May.
2. Canidae and Natural Balance combine to form Ethos Pet Brands
The combination of Canidae and Natural Balance pet food companies in March was a true merger, with both companies maintaining their individual brands. In August, the combined company announced it would be named Ethos Pet Brands. The investment firms L Catterton and Nexus Capital Management have 50-50 ownership of the merged organization. Ethos is the original name of Canidae's manufacturing facility in Brownwood, Texas, USA. The Brownwood facility opened in 2012 and will now manufacture products for both brands.
3. L Catterton invests in Drools Pet Food
L Catterton announced in June that it had invested around $60 million in Drools Pet Food, a top local pet food company in India.
4. BrightPet acquires Raw Advantage
BrightPet Nutrition Group, backed by A&M Capital Partners, a private equity firm, continued its acquisition spree in June by buying Raw Advantage Processing, a family-owned co-manufacturer of freeze-dried and frozen raw pet food and treats in Oregon.
5. Topspin acquires Three Dog Bakery consumer products
Also in June, private equity firm Topspin Consumer Partners acquired the consumer products division of Three Dog Bakery, which creates humanized dog treats sold at traditional and online retailers.
6. Alphia partners with Better Choice
Alphia Inc., a custom manufacturer of superpremium pet food based in the U.S., announced a strategic partnership with Better Choice, a pet health and wellness company, in June. Along with a US$5 million investment made by Alphia into Better Choice, Alphia will become the manufacturer for its premier brand, Halo, a superpremium pet food brand found in pet specialty stores.
7. Private equity sells Alphia to another group
In August, private equity firm PAI Partners agreed to buy Alphia Inc. from its owner J.H. Whitney Capital Partners. PAI Partners is a private equity firm based in Paris. Alphia is PAI Partners’ second major acquisition in the U.S. The French private equity firm acquired Tropicana from PepsiCo in 2021. J. H. Whitney Capital Partners (JHW) had owned C.J. Foods since 2014 and acquired Lortscher's Animal Nutrition (now LANI) in 2018.
8. Cargill reenters the pet food market
In August, Cargill a well-known name in the animal feed sector, broadened its horizons by reentering the pet food market in Mexico. As part of this endeavor, the company is giving a fresh look to its three pet food brands: Pingo, Keycan and Petmaster.
9. Sunshine Mills buys Red Collar facility
Sunshine Mills, a pet food and treat maker based in Alabama, acquired the Red Collar Pet Foods plant in Joplin, Missouri, USA, in August. The facility will increase Sunshine Mills baked and cold-formed pet treat production capacity. The 200,000 square foot plant employs approximately 130 people.
10. Anchor Ingredients expands space with grain facility acquisition
Anchor Ingredients, a provider of ingredients for the pet food industry, acquired a grain handling facility in Hatton, North Dakota, USA, in August. Headquartered in Fargo, North Dakota, Anchor said this facility will allow it to expand its ingredient portfolio and processing capabilities.
11. Post Holdings to acquire Perfection Pet Foods
Announced in October, Post Holdings, a consumer-packaged goods holding company based in St. Louis, Missouri, USA, intends to acquire the assets of Perfection Pet Foods for US$235 million. The acquisition includes Perfection’s two manufacturing facilities located in Visalia, California. These facilities will provide Post with expanded manufacturing capabilities, allowing the company to bring a portion of its existing pet food business in-house. Upon the conclusion of this acquisition, Perfection will be integrated into the Post Consumer Brands segment.
12. Voff Pet Food buys Dutch Carnibest
The Swedish-based Voff Premium Pet Food acquired dog and cat food manufacturer Carnibest for an undisclosed amount in October. With the gain of Carnibest’s Ermelo production site, Voff now has a total of nine manufacturing facilities.
13. Central Garden and Pet acquires TDBBS
Central Garden and Pet acquired TDBBS from Bregal Partners in early November. TDBBS is a provider of premium natural dog chews and treats. The addition of TDBBS will expand Central’s portfolio with bully and collagen sticks, bones and jerky, and further strengthen Central’s e-commerce and digital capabilities. TDBBS is based in Richmond, Virginia, USA.
14. General Mills acquires Fera Pets, enters pet supplement space
In November, General Mills acquired Fera Pets, Inc., a vet-founded pet supplement company, bringing new health-focused offerings to General Mills’ pet portfolio. This pet product company acquisition represents General Mills’ first step into the pet supplement category and first acquisition by its newly launched growth equity fund.
15. Antelope acquires My Perfect Pet
Antelope, a provider of premium pet care products and services, acquired My Perfect Pet, which offers nutritionally balanced pet food crafted from ingredients such as beef, turkey, broccoli and cranberries, in early December.
16. A Pub Above partners with Generation Pet
A Pup Above, a provider of gently cooked dog food, announced a distribution partnership with Generation Pet in December bringing A Pup Above's meals further into the Northeast region.
17. Assisi Pet Care collaborates with Burns Pet Nutrition
Assisi Pet Care Group acquired Burns Pet Nutrition in an undisclosed deal in mid-December. Burns, founded by John Burns MBE 30 years ago, focuses on pet health through its renowned, high-quality dry and wet dog food, expanding into a cat product range.
18. Tom&Sawyer partners with Freedom Pet Supplies
Also in mid-December, Tom&Sawyer, provider of AAFCO Human Grade pet meals in Canada, announced its collaboration with Freedom Pet Supplies. This partnership aims to expand the distribution of its high-quality pet food across Canada, focusing on Ontario, Quebec and the Maritimes.
