Final decision: BRF keeps its pet food business
The Brazilian food giant considered selling its pet portfolio earlier in the year. Why has it suddenly changed its mind?
After opening bids to sell its pet food business for R$2 billion ($384M/€363M) last March, BRF announced its decision to “maintain” its operations in the pet industry.
According to the food giant, they are the third-ranked player in the Brazilian pet food market and the leader in super premium natural pet food. And the company’s strong presence in the market seems to have prompted the decision to hold onto its pet portfolio.
“The company will continue to drive growth in this segment by increasing distribution through specialized channels, strengthening brand strategy by segment and channel, consolidating integration synergies and advancing the export expansion strategy,” reads a statement.
What are analysts saying?
A few months ago, some media reports suggested that up to 10 companies had bid to acquire BRF’s pet portfolio, including Swiss multinational Nestlé for R$1.7 billion ($346M/€323M).
But the unsuccessful bids could also be one of the reasons behind the Brazilian company’s decision to no longer sell its pet business.
“The decision to not go ahead with the sale could be because BRF has not received bids that are in line with its target valuation,” tells Bloomberg Leandro Fontanesi, Head of Latin America Food, Beverage and Agribusiness at investment-banking firm Bradesco BBI.
Fontanesi adds that the decision “shows that the company is committed to its financial discipline and does not need to liquidate assets at unattractive valuations to raise cash.”
Good perfomance
In the 3 months ending September 2023, BRF’s pet food sales volume climbed over 5.1% compared to the same period in 2022.
The company announced that BRF Pet “continues to advance” and that it even started exports to Taiwan in September.
BRF was created in 2013 from a merger between Brazilian pet food corporations Sadia and Perdigão. Today, it is one of the largest global food companies and operates in 117 countries. The company acquired the pet food brand Mogiana Alimentos and manufacturer Hercosul in 2021.
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