Pet Food Manufacturing Industry Profile

The US pet food manufacturing industry includes about 200 companies with combined annual revenue of about $47 billion. Major companies include divisions of Nestlé (Nestlé 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 eight largest companies account for about 85 percent of sales.

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 about $380,000. The pet food industry is highly competitive, with large companies spending millions on marketing to maintain share.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are dry and canned dog and cat food. Dry dog food accounts for about 45 percent of industry revenue, canned cat food for about 25 percent. Dry foods include semi-moist products. Canned cat foods may be fish-based or meat-based.

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, and packaged. Dies allow manufacturers to change the shape of products. Flavorings and additional nutrients for dried foods are often sprayed on after extrusion.

Major ...