Ratings in the pet sector: 2025 brings upgrades and new entries

2025 has seen a reshuffling of credit ratings across the pet industry. One of the big 3 credit rating agencies, S&P Global, upgraded 2 companies and gave a positive inaugural rating to another one this year. 

S&P classifies companies into 2 broad categories: investment grade and speculative grade. Within the investment grade, companies can be rated in the following order: AAA (extremely strong), AA (very strong), A (strong) and BBB (adequate capacity). These “strengths” refer to the company’s ability to meet financial commitments.

In terms of speculative grade, they can be classified as BB, B, CCC, CC, C and D, according to their vulnerability in the long and short terms to adverse business, economic and financial conditions.

Zoetis and Elanco 

The most recent movement was the upgrade of the American pharmaceutical company Elanco from BB- to BB in October. This follows another positive movement from Zoetis, the New Jersey-headquartered animal health company, which was upgraded from BBB to BBB+ in April. 

“The upgrade on Elanco largely reflects a more conservative financial policy highlighted by debt reduction with the proceeds of its aqua business sale to Merck & Co. and the sale of human health royalties for one of its parasiticides, as well as the success of several recent product launches,” the S&P Global ratings team tells GlobalPETS. 

The American company also had its ratings reevaluated by Fitch. In August, Fitch Ratings upgraded 2 types of the company’s debt while affirming one, and forecast a stable outlook. 

In turn, the upgrade of Zoetis “primarily reflected our view that the business has materially strengthened in recent years as its scale and profitability are stronger than its industry peers,” S&P analyses. 

Mixed scenario

According to the ratings team, the recent moves suggest a mixed scenario for the pet segment. On the one hand, there’s the expectation of a sustained and long-term increase in spending on pets as well as a strong “consumers’ willingness to pay” that will back innovation in pet health. 

S&P also highlights the role of farm products, including medicines and feed additives, in supporting the animal health segment, which also “benefit[s] from growing global demand for animal proteins.”

While spending helps strengthen companies in the segment, general market conditions put pressure on demand. “Economic uncertainty has contributed to declines in vet visits, declines in pet adoption rates and resulted in negative credit rating actions in 2025,” the team says.

They refer to the downgrades of the US-based veterinary practice management company Pathway Vet Alliance from CCC+ to SD in April (followed by a rapid recovery 6 days later) and the Maine-based animal health distributor Covetrus from B- to CCC+ in September. 

Portfolio, diversification and conservative finance

An efficient portfolio has been a “key focus” for Elanco and Zoetis, as both sold side businesses in 2024. “These moves and their product pipelines help the companies be more heavily indexed to higher-growth and innovative product categories,” explains S&P. The result is improved profit margins and cash flow, “which are viewed favorably from a credit perspective.”

This is important because it allows “financial flexibility to invest in long-term growth,” the company explains, and opens space to support share price, growth by acquisitions or repayment of debts. S&P also highlights that financial caution is an asset for companies facing possible headwinds amid global economic uncertainty. 

The companies’ diversification across geographies, pet and livestock, and animal species was another positive sign for the rating agency.

Symrise 

The newcomer of Germany-based ingredient manufacturer Symrise completed the positive side, having received its inaugural rating in September, a BBB+ on the investment-grade level in S&P’s scale.

The inaugural evaluation of Symrise points to leading market share in the specialty ingredients segment, which S&P classifies as a growing industry, and a strong position in the pet food and aroma molecules markets. 

As in the previous cases, the agency also highlighted Symrise’s global presence, large portfolio of products and innovation capabilities as positive points to back the rating. “We believe Symrise is well positioned to further improve its operating performance thanks to positive growth prospects for the sector, pricing power and efficient operations,” S&P assesses. 

The outlook was classified as stable, as the agency forecasts solid operating performance and credit metrics due to “industry growth prospects and leading market positions.”

The ratings search occurred as Symrise “expands its access to capital markets and diversifies its funding sources,” according to CFO Olaf Klinger.

United Petfood

In January, Fitch published an inaugural rating of BB- to the private label producer United Petfood Group’s Long-Term Issuer Default Rating (IDR). The rating agency attributed the classification to the company’s “solid position as one of the leading producers of private label products and third-party brands in the European pet food industry.”

Fitch also highlighted the company’s manufacturing network and innovation capabilities as drivers of scale growth, and forecast a stable outlook for United Petfood. 

Fitch’s rating scale goes from AAA to BBB as investment grades, and BB to D in the speculative grades, with the addition of + or – “indicating relative differences of probability of default or recovery for issues.”

Stable outlooks

Other major players are also classified by rating agencies, although without changes throughout 2025.

One of them is the American company Central Garden and Pet, rated BB by S&P Global and Fitch, and B1 by Moody’s. In their assessment of the company, Moody’s attributed Central’s stability to the pet business. 

“Central’s portfolio of consumer-oriented and largely consumable products is resilient through economic downturns, and the steadier pet business helps mitigate the consolidated effect of weather-related declines in the Garden segment,” the agency wrote in February. 

And Fitch pointed to the pet segment’s “diverse customer base” as a mitigating factor against customer concentration. 

Another important player is the German pet care retailer Fressnapf, which was assigned a preliminary BB- rating last November by S&P. The agency says that the company’s “elevated leverage” due to the acquisition of Arcaplanet constrained its rating.