Above Food expands plant-based pet food ingredients with acquisition

Above Food expands plant-based pet food ingredients with acquisition

Above Food Ingredients has expanded its pet food ingredients business with the acquisition of The Redwood Group (TRG), which is an employee-owned supply chain and ingredient company that sources, processes and packages commodities for domestic and international customers. Based in Montana, the company’s products include grains, cereals, oilseeds, pulses and other alternative sources of protein for human and pet food companies.

This strategic acquisition significantly enhances Above Food’s presence in the rapidly growing plant-based pet food market, positioning it to capitalize on emerging trends and meet increasing consumer demand for high-quality, plant-based pet nutrition, said Lionel Kambeitz, founder, president, CEO and executive chairman of Above Food.

“This acquisition significantly enhances our position in the rapidly growing plant-based pet food market, expanding our total pet food business to approximately US$110M, or 25% of our combined revenues on a proforma basis,” said Kambeitz. “Furthermore, our seed-to-fork platform uniquely positions us to serve the evolving needs of the plant-based pet food industry, previously demonstrated by delivering a 13% organic CAGR in our legacy pet food business since 2022.

By controlling every step from seed selection and farming to ingredient processing and formulation, Above Food can offer traceability, quality control and customization capabilities, said Kambeitz.

“This vertical integration allows us to develop innovative, nutritious plant-based ingredients specifically tailored for pet food applications, meeting the growing demand for high-quality, sustainable pet nutrition solutions,” he noted. “As pet parents increasingly seek transparent, plant-based options for their pet companions, Above Food’s comprehensive approach enables us to be an invaluable partner to leading global pet food manufacturers. We can rapidly respond to market trends, ensure consistent supply of premium ingredients, and support our partners in developing differentiated products.”

Pet food market significance

According to Above Food, the pet food industry represents a substantial and growing opportunity for the company, driven by several key factors:

  • Large and growing market: The US$26 billion global plant-based pet food market is projected to grow at a CAGR of 9% through 2032, according to Future Market Insights. This growth is outpacing the overall pet food market, indicating a strong shift towards consumers adopting plant-based protein formulations for their pets.
  • Expanding pet ownership: 66% of U.S. households own a pet, according to the American Pet Products Association. The U.S. pet population has been consistently growing at 1% to 2% annually from 2013-2022, as reported by Euromonitor. This trend is expected to continue, creating a steadily expanding customer base for pet food products.
  • Pet humanization trend: According to Packaged Facts, 92% to 96% of U.S. pet owners view their pets as family members. This humanization of pets has been a strong long-term trend for over a decade, transforming pet owners into “pet parents” who prioritize their pets’ well-being and are willing to invest in premium nutrition options.
  • Health and nutrition focus: Mirroring trends in human nutrition, pet parents are increasingly seeking healthier, higher-quality food options for their pets. There’s a growing demand for fresh, natural, and organic plant-based food products with transparently sourced ingredients. This trend has been further accelerated by the COVID-19 pandemic, with 48% of pet parents reporting feeling closer to their pets due to the pandemic, according to an American Pet Products Association’s Pulse Study.
  • Plant-based innovation: The plant-based food movement is driving innovation in pet food, with ingredients like chickpeas and flaxseed becoming increasingly popular alternatives to traditional soy, corn, and wheat proteins. This shift opens up new opportunities for differentiated ingredient suppliers like Above Food, now said to be North America’s largest chickpea manufacturer following the acquisition of TRG, to become innovation partners with manufacturers in developing novel, nutritious plant-based pet food formulations.
  • Market resilience: The pet category has historically shown resilience during economic downturns, as consumers continue to prioritize spending on their pets even when tightening budgets in other areas. This resilience was demonstrated during both the financial crisis in 2008 and the COVID-19 pandemic when the pet industry experienced positive growth despite a reduced appetite for consumer spending.

Adapted from a press release.

link

Leave a Reply

Your email address will not be published. Required fields are marked *