Major corporations are expanding their horizons and moving into the pet care space

Despite a high number of existing players and recent downward trends in consumer spending, a wide range of human-focused businesses are being persuaded of the potential rewards of diversifying into the pet arena.

Subscription food

Berlin-headquartered direct-to-consumer (DTC) meal kit company HelloFresh recently expanded its portfolio to include home delivered, subscription-based premium pet food with its new service, The Pets Table, which is currently available in the US.

“Because the pet food space is a large, growing industry, we believe we have the right capabilities to create a successful vertical,” Laurent Guillemain, CEO of The Pets Table, tells PETS International.

The company caters to customers looking for as much convenience as possible and helps clients through “personalization, direct to-door delivery and convenient subscriptions”.

The Pets Table claims that 86% of US pet parents surveyed say that they prefer its products to their previous dog food.

Meat dog treats

Meat subscription delivery platform ButcherBox has also recently made headway in the pet sector with a line of chicken and beef based dog treats.

“We chose to start with dog treats to understand the demand from our existing customers, 50% of whom are dog owners,” says founder and CEO Mike Salguero. According to Salguero, the company has sold $1 million (€915,500) worth of dog treats since launch.

The Massachusetts-based company is looking to expand its product offering of dog kibble and meal toppers this year and considering targeting cats.

The protein market

British biofuel producer Ensus announced its entrance into the high-protein pet food market with a £90 million ($113.8M/€104.2M) investment in a new facility in north-east England.

“The move to diversify our product range beyond the cattle feeds that we have been producing at the plant for more than a decade was aimed at both increasing our business sustainability into the future and helping to address the UK’s shortage of high-protein feeds in other animal food sectors,” says a company spokesperson.

The project is still in its early stages and, when in operation, the facility will produce EnPro, a new high-protein product that will target the aquafeed and pet food markets in the UK and Europe.

Indian shrimp manufacturer Avanti Feeds recently diversified by expanding its portfolio into the pet care space through a joint venture with Thai pet food manufacturer Bluefalo.

The partnership between the companies, which is expected to be operational in 2 years, includes deals on manufacturing and trading capabilities not just for pet food but also for pet care and grooming products such as soaps, shampoos, medicines, creams and equipment.

Why now?

The pet industry’s potential is clearly catching the attention of companies that operate in other sectors, especially those related to human food.

Danny Zhang, Principal of management consulting firm Oliver Wyman’s retail and consumer goods practices, believes there is a reason why companies are only now entering the pet sector instead of at the height of the pandemic. “A lot of these businesses had their hands full with other issues during the pandemic and the supply chain disruptions that followed, so it wasn’t the time to deviate from the core focus for most companies,” he explains.

“Pet has also historically been considered a recession- resilient industry, which can help these companies accelerate their growth while also improving their cyclical exposure to economic downturns.”

Bryan Jaffe, Managing Director and Chief Operating Officer of investment banking firm Cascadia, believes there is a convenience behind some of the recent expansions into the pet sector. “If I deliver your groceries, it is more likely that if I offer to deliver your pet food that you would welcome that opportunity. For convenience-based fulfillment solutions, this defrays cost and supports profitability,” he says.