Pet Food Manufacture

The US pet food manufacturing industry includes about 175 companies with combined annual revenue of $11 billion. Large companies include divisions of Nestle (Nestle Purina PetCare Company); Procter & Gamble (Iams); Colgate-Palmolive (Science Diet and Prescription Diet); Mars (Pedigree and Whiskas); and Del Monte (9Lives, Gravy Train, Milk-Bone, and Meow Mix). The industry is highly concentrated: the 50 largest companies hold almost 100 percent of the market.

COMPETITIVE LANDSCAPE

Pet ownership drives demand. The profitability of individual companies depends heavily on effective marketing. Large companies have advantages of scale in manufacturing, marketing, and distribution. Small companies can compete effectively by offering specialized products or by serving a local market. Pet food manufacturing is capital-intensive; average annual revenue per employee is over $700,000. The pet food industry is highly competitive, with large companies spending millions on marketing to maintain share.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are dry dog food, canned cat food, dry cat food, and canned dog food. Dry dog food accounts for about 50 percent of industry revenue, canned cat food for 20 percent. Dry foods include semi-moist products. Canned cat foods may be fish-based or meat-based. Other types of pet food include pet treats and food for birds; fish (fresh and saltwater); small animals; and reptiles.

Pet food manufacturing is a highly automated process that makes low-cost products. Ingredients are mixed, cooked, and canned, or may be extruded under heat and pressure, shaped, dried, ...