FDA Safety Proposal Draws Attention to the Growing Pet Food Industry
If you own what statisticians dryly call a “companion animal,” then it's no surprise to you that the pet care industry is massive.
The global market has reportedly been growing at a rate of four percent annually since 2008 – making it one of the few industrial sectors to see growth during the international economic downturn.
It is also expected to reach $96 billion in sales by the end of this year – and top the $100 billion level in 2014.
In the U.S. alone, according to the American Pet Products Association, over $21.2 billion will be spent in 2013 on pet food. And a series of scandals involving tainted pet food and treats – the most recent being contaminated jerky that has reportedly killed nearly 600 pets in the U.S. since 2007 while sickening thousands more – is drawing new attention to how the sector is regulated.
On Friday, The Food and Drug Administration announced a proposed rule to strengthen the safety of food for animals – including both pet food and animal feed. The planned regulation, according to a press statement, would establish new, preventative controls for such products during their manufacturing, processing and storage – both in the U.S. and overseas.
One of the goals of this rule, according to the FDA, is to prevent foodborne illness in both animals and the humans.
That issue is already high up on the agenda of pet food manufacturers. Purina, a division Nestlé (OTC: NSRGY), has a web page devoted to calming consumer concerns about its pet food – which outlines ingredient sourcing, testing and control procedures at its North American facilities.
The pet food industry is also going through a wave of consolidations. Earlier this month, private equity-backed Del Monte Foods annnouced it had reached an agreement to sell its off its consumer products division for $1.675 million – in order to focus on the pet food and snack market.
The company says its pet products line – which includes such well-known brands as Meow Mix, Kibbles n' Bits, Milk-Bone, Nature's Recipe and 9Lives – already has a strong market share. It also expects the “continued heightened importance of pets as part of the family, as well as higher consumer spending on more premium pet products, will continue to drive market expansion.”
PetfoodIndustry.com, meanwhile, notes outside investment has helped spark a series of recent acquisitions in the lucrative pet speciality distribution sector, which in turn could have implications for big pet retailers such as PetSmart (NASDAQ: PETM) and privately-owned Petco – as well as small, independently-owned pet stores.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.