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Competitors for Pet Food Companies

Mars Petcare Inc.

Mars Petcare is the world's leading pet food company. Its 41 pet food brands include five billion-dollar brands. Nonetheless, the company is increasingly looking to diversify its revenue streams, as evidenced by the planned acquisition of the VCA chain of animal hospitals. Mars Petcare also owns the BluePearl chain of emergency and specialty veterinary care clinics and Banfield animal hospitals. Mars Petcare’s parent company, Mars Inc., is the world’s seventh-largest private company in the U.S., with annual sales exceeding U.S. $33 billion (Wall & Keller, 2016 ).

Nestlé Purina PetCare

Nestlé Purina PetCare remains a juggernaut in the global pet care industry. Though it now faces stiff competition for first place from Mars Pet Foods, Nestlé's 2015 acquisition of Merrick Backcountry is helping to drive growth in the premium market. The company topped $12 billion in sales in 2016, a five percent increase for the year (Wall & Keller, 2016).

Big Heart is a leading producer, distributor, and marketer of premium-quality branded pet food and pet snacks in the US. With Smucker’s acquisition of Big Heart in 2015, the parent company gained immediate and significant presence in the field. In the US, Big Heart claims the top market share position in dog snacks and second highest position in dry cat food. Big Heart contributed $2.3 billion in net sales to Smucker’s in 2016 — a low single-digit percent growth compared to the previous year. The incremental increase was driven by the Natural Balance and Milk-Bone brands, which offset declines in Kibbles’n Bits dry dog food and Meow Mix cat food(Wall & Keller, 2016).

Hill's Pet Nutrition sells over 300 products, principally through authorized pet supply retailers and veterinarians in more than 80 countries worldwide. A subsidiary of Colgate-Palmolive Co., Hill's products accounted for 14 percent of the parent company’s total worldwide net sales in 2015. Organic sales in Hill’s Pet Nutrition increased 6 percent in 2015, with the United States and Taiwan leading volume gains. This marks some recovery in the US market, as domestic sales had declined in 2014. Colgate-Palmolive reports the worldwide 2015 increase in organic sales was driven primarily by continued growth in the Prescription Diet brand, as well as Hill's Advanced Nutrition and Naturals categories. Although organic sales increased, the company attributed a drop-in revenue to negative foreign exchange rates (Wall & Keller, 2016).

Following its 2015 IPO, Blue Buffalo now claims about 6 percent of the US pet food market, selling dog and cat food in the Wholesome Natural market segment. The company’s sales remain overwhelmingly domestic, with only about 4 percent exported (in Canada and, to a lesser extent, Mexico and Japan). US manufacturing and distribution is conducted through a hybrid network of owned and contracted facilities. The company's Heartland facility in Joplin, Missouri, is expected to provide 35 to 45 percent of Blue Buffalo's forecasted dry food production needs over the next several years; internal manufacturing capabilities are being expanded under a previously announced $200 million multi-year capital investment program. In 2016, Blue Buffalo revenues climbed 12 percent over the prior year, reaching nearly $1.148 billion. Blue Buffalo trades under the name of its holding company, Blue Buffalo Pet Products, Inc. Lawsuits continue to play out related to 2014 revelations that Blue Buffalo falsely advertised products containing “chicken meal” or “turkey meal," allegedly due to deceit by a supplier. After settling one class action lawsuit that year for $32 million, another was filed in Ontario in February 2016. In November 2016, Blue Buffalo settled a suit with Nestlé Purina, also for $32 million. Blue Buffalo also filed suit against its insurers in an attempt to recover litigation fees and settlement payouts (Wall & Keller, 2016).

SpectSpectrum Brands now controls over a dozen pet care brands with global reach. Spectrum, through its United Pet Group division, acquired the European operations of Iams and Eukanuba as well as global dog treats leader Salix in 2015. The pet division, including food and several lines of other supplies, accounted for 16 percent of the parent company's net sales of US $5.04 billion in the fiscal year ended September 2016. Spectrum also manages global operations in batteries and appliances, hardware and home improvement, home and garden, and auto care (Wall & Keller, 2016).

Work Cited

Wall & Keller (2016, October 4) Top Pet Food Companies. Retrieved from

http://www.petfoodindustry.com/articles/6054-top-10-us-based-pet-food-companies