Unveiling the Dog Food Industry: The Key Players
Introduction
The dog food industry, a multi-billion dollar global market estimated at $133.9 billion in 2023, plays a crucial role in the lives of pet owners and their furry companions. Despite its significance, many aspects of this industry remain shrouded in mystery. Where does the massive array of brightly colored dog food packages come from? This article aims to review who the key players in the dog food (and overall pet food industry) are and shed light on some of the market dynamics, agendas and the power that these companies have on the overall pet food market. This information is useful to consumers in gaining a clearer understanding of the motivations behind the company’s creating the foods that your pet consumes.
The Dominant Players in the Dog Food Industry
The chart below depicts the percentage breakout of market share by company internationally and based on 2023 revenue numbers available to the public:
Note that the chart above is for the global pet food as opposed to just the US. The key players above would have higher percentages if we changed the numbers to be for just the US. As you can see from the chart, Nestle Purina and Mars Petcare are the power players in the game with a handful of other large companies and then a heavily fragmented market making up the majority of the market internationally. Many of the brands owned by Mars and Nestle are very recognizable from store shelves:
- Mars Petcare Inc.
- Brands: Pedigree, Royal Canin, IAMS, Eukanuba, Nutro, Cesar, Greenies, Sheba, Whiskas, and more.
- Overview: Mars Petcare is a subsidiary of Mars, Incorporated, one of the largest privately-held companies in the world. Mars Petcare dominates the global pet food market with a diverse portfolio of brands catering to various dietary needs and price points.
- Nestlé Purina PetCare
- Brands: Purina ONE, Purina Pro Plan, Purina Dog Chow, Beneful, Fancy Feast, Friskies, Beyond, and more.
- Overview: Nestlé Purina PetCare, a subsidiary of the Swiss multinational Nestlé, is another major player in the pet food industry. Known for its extensive research and development, Purina has a strong reputation for scientific nutrition.
Financial Influence and Market Control
These power players not only control a significant portion of the market through their brands but also exert substantial financial influence on various aspects of the pet food industry with the overall goal of maintaining market dominance by influencing and shaping public perception, regulations, and academia. They do this by maintaining memberships and sponsorships with various special interest groups and funding academia.
Influence on Special Interest Groups
Special interest groups, including industry associations and lobbying organizations, play a crucial role in shaping policies and regulations that affect the pet food industry. Major pet food companies often contribute significant amounts of money to these groups to ensure their interests are represented. For example:
Pet Food Institute (PFI): The PFI is a trade association representing pet food manufacturers. Major companies like Mars Petcare, Nestlé Purina, and Hill’s Pet Nutrition are prominent members and contributors. The PFI advocates for industry-friendly regulations and standards, often influencing legislation in favor of its members. The PFI manages approximately $5 million in annual revenues which go directly to the organization’s causes, primarily influencing legislation.
For example, in February 2024, the PFI assisted in putting fourth legislation that would eliminate the state by state guidance on pet food safety and replace them with a centralized and clearly defined federal guidelines. The bill would put the review of the labeling and ingredient review on the FDA with individual states assisting to enforce quality standards through inspection. The overall purpose of the bill is to reduce red tape (i.e. costs, legal, regulatory, time to market) in theory improve nutritional outcomes for pets, although the bill does not explicitly say how that would happen.
Critics of the bill say that the FDA promises to provide education on the safety of pet food and access to information on the latest science-based nutrition; however, nothing in the bill specifically provides for access or education related to pet food. In fact, the bill appears to simply “delegate to the Director of the Center for Veterinary Medicine responsibility for…educating pet owners, veterinarians, and the companion animal industry about pet food.”
This is one example of the many legislative items the PFI promotes. The overall goal of all of these items promoted by the PFI is unsurprisingly to make doing business more profitable but does appear to be at the cost of the consumer, and as this is a battle that is taking place very much in the background; consumers are generally not going to be aware of any changes in the pet food products sitting on store shelves. Reducing red tape generally does not improve quality for consumers; however, it remains to be seen if this bill ultimately passes.
American Feed Industry Association (AFIA): The AFIA represents the entire feed industry, including pet food manufacturers. Large pet food companies are active members, contributing to the AFIA’s lobbying efforts to shape policies that benefit the industry. AFIA manages revenues approximately $6.3M (2022 is the most recent number available) which is used to support its causes.
An example of the positions that AFIA takes is the concern it has expressed over the ending of the partnership between the FDA and the AAFCO (Association of American Feed Control Officials), a non governmental entity. The partnership had essentially been a set of defined responsibilities between the FDA and AAFCO in reviewing feed ingredients and had been entered into to increase the speed to market of new feed products and in theory improve the quality of those feed products.
AAFCO, similar to PFI, seems primarily concerned with the time it takes get products to market and costs for pet food companies which again has little to do with the consumer. This is another example of the primarily regulatory and non governmental organizations being more concerned with pet food companies instead of consumers.
Financial Ties to Academia
In addition to significant influence in the governmental/regulatory side of pet food, major pet food companies also invest heavily in academic research and partnerships with universities. While this can lead to advancements in pet nutrition, it can also create conflicts of interest that again are focused on benefiting pet food companies and not necessarily consumers. Some key examples include the following:
Research Funding & Academic Partnerships: Companies like Nestlé Purina and Hill’s Pet Nutrition fund research at veterinary schools and institutions. While this research can lead to valuable insights, it also raises concerns about bias and the potential for studies to favor the interests of the funding companies.
There have been no significant easily accessible or publicly available studies exploring the potential conflict of interest between studies conducted on animal food by academics and funding from pet food companies or the potential impact to the results of those studies. However, many critics of the food processing industry believe that there are potential negative implications related to private companies providing funding for academic studies over their own products or information used to present their products in a positive light.
Although private institutions may have an impact on the direction of what is studied and what they choose to fund, that doesn’t necessarily indicate that a bias is represented in the results obtained from those studies. A 2020 study of potential conflicts of interest in academia as a result of funding from private company food producers (not pet food), found that the information available on the amounts of funding received from private institutions and the purposes of the funding was not clear and did raise concerns around population health. Although there are no similar studies for pet food, we will make the assumption that there is less transparency around pet food and therefore we would likely conclude that there do need to be more disclosures on the amounts and purposes of grants and other funding from private companies to academic institutions in order to ascertain potential impact to pet food products.
Marketing and Consumer Perception
The marketing strategies employed by major pet food companies are designed to shape consumer perception and drive sales. This includes:
Advertising: Extensive advertising campaigns across various media platforms create brand recognition and loyalty. Companies invest heavily in marketing to position their products as premium choices for pet owners. For example, Nestle Purina spent over $17 billion in advertising and administration expenses in 2023. Although that number does include the total advertising for all of Nestle Purina products including those that are not pet food and likely does include expenses that are not directly marketing or advertising, the size of the number provides context for the dominance of companies like Nestle Purina in purchasing advertising spaces in stores and online. The advertising expenses for Nestle Purina are more than the sales market share of virtually all other competitors.
Sponsorships and Endorsements: Sponsoring events, competitions, and pet-related activities helps companies build a positive image and connect with pet owners. Endorsements from veterinarians and pet influencers further enhance credibility. To further impact increase the dominance in the marketplace, Nestle Purina and other large pet food producers have begun to purchase significant portions of the veterinary services market.
The Impact on Prices and Market Competition
The market dominance of a few major players has significant implications for prices and competition in the dog food industry. These companies have the resources to control various aspects of the market, leading to both positive and negative consequences for consumers and smaller competitors.
Price Control and Profit Margins
Large pet food companies can leverage their scale and resources to control prices. This can manifest in several ways:
Economies of Scale: Major companies benefit from economies of scale, allowing them to produce large quantities of pet food at lower costs. This can result in competitive pricing, making it challenging for smaller companies to compete on price alone even though the ingredients used at scale are not necessarily better than alternatives from smaller companies that produce at a lower level.
Premium Pricing: While some brands offer affordable options, many premium brands under the umbrellas of these major companies are priced significantly higher. The perception of higher quality and extensive marketing efforts justify these premium prices, leading to substantial profit margins and low competition which is not in favor of consumers.
Barriers to Entry for Small Competitors
The dominance of major players creates barriers to entry for smaller companies looking to enter the market. Challenges faced by smaller competitors include:
Distribution Networks: Established companies have extensive distribution networks, ensuring their products are readily available in various retail outlets. Smaller companies struggle to secure shelf space and distribution channels.
Marketing Budgets: The substantial marketing budgets of major players dwarf those of smaller competitors. This limits the ability of small companies to create brand awareness and attract customers.
Regulatory Compliance: Meeting regulatory requirements can be costly and time-consuming. Major companies have the resources to navigate complex regulations, while smaller companies may find it challenging to comply.
Conclusion
The dog food industry is dominated by a few major players who wield significant financial influence and control over the market. Companies like Mars Petcare, Nestlé Purina, Hill’s Pet Nutrition, J.M. Smucker, and General Mills not only control a vast array of brands but also shape regulations, influence academia, and drive consumer perception through extensive marketing efforts. The power structures within the pet food market are best presented with the chart below:
In an ideal world, unbiased/third party studies (academia) would would be at top of the hierarchy, government organizations next, and pet food companies after that in terms of influence on what is ultimately used in pet food products and what is disclosed to the public. Consumers also should have a voice in what is being produced for their pets. Under current guidance, pet food is regulated under the same framework as livestock food which is not necessarily in line with the health outcomes (longevity, quality of live, etc.) that many consumers desire for their pets.
As pet owners, it is essential to be informed about the forces shaping the products we feed our beloved pets. By understanding the agendas and financial influence of major dog food companies, we can make more informed choices and advocate for transparency and fair competition in the industry. Ultimately, our goal should be to ensure the health and well-being of our pets, free from the undue influence of corporate interests.
Want to read out review of the Farmer’s Dog Food? Click here.