Navigating the Evolving Landscape of Pet Industry Investments
Analyzing the Recent Dip in M&A Activity within the Pet Food Sector
The pace of consolidations and acquisitions within the pet food industry experienced a decline in 2025, marking a continuation of a multi-year trend. Data indicates a total of 23 transactions for the year, a decrease from 26 in 2024. While 2024 saw a slight increase from 18 deals in 2023, these figures are a significant departure from the boom years of 2020-2022, which recorded 48, 58, and 38 deals respectively. Although some of the earlier high numbers encompassed broader pet sector deals beyond just pet food, the general pattern of diminishing activity over the past three years is unmistakable.
Expert Perspectives on the Future of Pet Industry Mergers and Acquisitions
Insights from Carol Frank, founder of BirdsEye Advisory Group, published in the December 2025 edition of Pet Age, characterize the recent period as the slowest in her 15-year career specializing in M&A. Despite this, discussions with six prominent acquirers in the pet industry reveal a collective "cautious optimism" for increased activity in 2026. However, none foresee a return to the peak transaction volumes of the early 2020s.
Segments Attracting Continued Investment and Growth in the Pet Market
Despite the overall slowdown, certain categories within the pet market continue to demonstrate strong appeal for investors. These include: consumables, with a particular emphasis on cat food due to steady or rising cat ownership contrasted with plateauing dog ownership; pet treats; a range of pet services such as boarding, daycare, training, and grooming (with insurance sometimes viewed as a distinct category); premium and especially functional products; and pet supplements and other health-focused items. The sustained growth and profitability within these areas, coupled with their inherent resilience, are key factors that attract investor capital. Harrison Seeman from Central Garden & Pet emphasizes the importance of evaluating businesses based on fundamental strengths like barriers to entry, margin potential, and management expertise, ensuring growth prospects align with valuation.
Investor Criteria: Beyond Market Trends
Beyond specific product categories, investors are actively seeking companies that are strategically positioned, efficiently managed, and demonstrate a clear readiness for acquisition. David Cunningham of Visio-Cap highlights that capital is available, but exclusively for entities that can articulate a compelling vision for sustained endurance and growth regardless of market conditions. This underscores the need for robust business models and forward-thinking strategies to attract investment in a more discerning market.
Contrasting M&A Dynamics: North America Versus Europe
It is important to note that these observations primarily pertain to the North American pet M&A landscape, particularly the United States. The European market, for instance, has shown different dynamics, with companies like United Pet Food (2023-2024) and Nutriment Co. (starting in 2024, with significant activity in 2025) leading numerous acquisitions. This regional divergence suggests that global pet industry M&A trends are not uniform. The question remains whether another European pet food giant will emerge to drive substantial M&A activity in 2026.