Hi everyone, happy last friday in August! An increasing number of premium, health-focused pet food brands are being snapped up by investors following several M&A deals last week, reflecting a booming demand for higher quality products, and continued interest in a category that’s projected to reach $275 billion by 2030 in the U.S. alone. Meanwhile, the USDA predicts higher food prices due to expensive commodities in the coming year. How will the consumer react? Read below:
What’s happening in the pet food industry?
- Wolf Spring, a pet nutrition startup founded in May 2019 and launched its first vitamin-enhanced water supplement for dogs of all ages, has just raised $2 million to expand product portfolio and distribution both online and in retail. Investments were made by angel investors Michael Frizell, founder of Pet Circle, Richard Setterwall, founder of Dogbuddy.com, and Baron Davis, an investor in Vitamin Water and two-time NBA All-Star. Pet-focused investments fund directors also contributed to the seed round, including those at Harvard and INSEAD Business Angel.
- Zesty Paws has signed an acquisition agreement with Health & Happiness (H&H) Group International Holdings Ltd., in which H&H Group would purchase 100% of the pet supplement company for an undisclosed amount, and leverage the latter’s expertise and network to grow its business. H&H ventured into the global pet nutrition market in Nov 2020 after acquiring Solid Gold Pet.
- CODICO Nutrition Animale acquired SANYpet, a European producer of branded premium dry and wet pet food for domestic animals. CODICO was established in 1975 by Chabbert to provide pet food products, mostly soup for dogs at the time. Bought by Dominique Senes and Dr. Yves Bienes (veterinary doctor) in 1995, the company’s positioning has evolved around proximity and originality in recipes, with a premium product. The group developed its offering range around two brands, Bab’in in specialty retail and Tonviet in vet retail, and private label. In 2016, CODICO was taken over by a group of private investors with a strategy to develop organically and through M&A over the long run with no timeline horizon.
- Hannah Crum, president and cofounder of Kombucha Brewers International (KBI), says word of mouth has been the number-one advertisement for the kombucha industry as consumers are increasingly realizing its health benefits, and predicts the category grow at a rate of nearly 20% CAGR, estimated to hit $8.5 billion by 2028. Better Booch, we are looking at you! “There is plenty of room for growth and innovation… Novel product offerings in the form of ‘exciting ingredients’ such as adaptogens and premium teas – as well as ‘healthy’ alcoholic offerings like hard kombucha – are just a few ways brewers are adapting their product for new markets.” Crum told FoodNavigator-USA.
- General Mills is dipping its toes in the animal-free dairy sector by launching a brand called “Renegade Creamery” focusing on cheeses made with proteins made via microbial fermentation. General Mills does not currently play in the plant-based or regular cheese category, but has developed plant-based yogurts under the Oui and GoGurt brands, vegan mac & cheese (Annie’s), and has invested in plant-based dairy such as Kite Hill and plant-based seafood brand Good Catch via its 301 Inc ventures arm.
- According to new data released yesterday by USDA’s Economic Research Service, the price of food consumed at home is now expected to increase between 2.5 and 3.5% and food consumed away from home is expected to increase 3.4 to 4.5% in 2021 over 2020. The agency predicts this trend will continue in the coming year with at-home prices climbing an additional 1.5 to 2.5% and away-from-home prices increasing between 3 and 4%.
- P&G has acquired Bodewell, a plant-based direct-to-consumer personal care brand aimed at consumers with psoriasis, eczema and sensitive skin. Terms of the deal weren’t disclosed. A P&G spokeswoman informed Beauty Independent that Bodewell has moved into P&G Ventures’ organization, where it’s being guided by a team of people overseeing marketing, communications, design, analytics, product supply, finance, and research and development.
- Food delivery service Trifecta raised $20 million in a Series B funding round led by Spring Lake Equity Partners, with participation from Data Point Capital, Raptor Group and Hall Group. Launched in 2015 by founder and chief executive officer Greg Connolly, Trifecta’s meals are made with organic and gluten-free ingredients that are never frozen and are sustainably caught or grass-fed.
- Israeli startup Yofix Probiotics has secured $3.5 million in a funding round led by the Millennium Food-Tech, Israel’s largest food tech R&D partnership and investment firm. The fresh funds will be used to ramp up Yofix’s manufacturing capacity amid surging demand for plant-based dairy. Yofix Probiotics has bagged $3.5 million in a new investment round led by Millennium Food-Tech, alongside alt-protein VC Big Idea Ventures (BIV) and The Kitchen FoodTech Hub, an incubator supported by the state’s Israeli Innovation Authority.
- Media marketing guru and serial entrepreneur Gary Vaynerchuk, best known for his forward-thinking investing strategy and bullish outlook on NFTs, is actively expanding his consumer products portfolio, leading two separate investments recently in Canadian meal delivery company Ethey, and plant protein-enriched oatmeal startup Kreatures of Habit.