Consolidation Knows No Borders: What U.S. and European M&A Activity Means for the Pet Industry

The pet food industry is booming. Driven by the humanization of pets and a surge in pet ownership, the global pet food market is projected to reach $137.4 billion by 2027. This lucrative landscape has spurred a wave of mergers and acquisitions (M&A), rapidly reshaping the industry.

With these forecasted projections and a solid historic 10% CAGR, the pet industry has always been a smart target for venture capital and private equity investors. However, as our market currently sits, the existing industry infrastructure is struggling to keep pace with rising demand.

BSM Partners’ proprietary forecasting platform, BSM Aperture—a powerful prediction tool launched during SUPERZOO 2024—indicates that achieving these ambitious market forecasts will require substantial innovation and investment in infrastructure development. For example, the current pet food and treat manufacturing capacity is not enough to meet predicted demand. The number of operational developments currently underway, both greenfield and expansions, are expected to be inadequate, and projects need to break ground soon to keep pace with the sector’s forecasted growth. This is an urgent priority to avoid significant supply chain bottlenecks that could stifle innovation, limit product availability, and ultimately fail to meet the demand from pet parents. The industry must act now to scale production capabilities or risk falling short of the immense potential that lies ahead.

While M&A activity might seem like background noise to some, it carries significant implications for everyone involved in the pet food space: brands, manufacturers, retailers, pet owners, and even consultants like our team at BSM Partners.

Why Pay Attention?

M&A activity is more than just a change in ownership—it's a barometer of the industry's health, future trends, and potential disruptions. Understanding the forces behind these deals is essential for informed decision-making for brands aiming to stay ahead of the curve, manufacturers seeking new partners, or retailers navigating competitive pressures.

Premiumization Push: Acquisitions like General Mills' recent purchase of Whitebridge Pet Brands and Inspired Pet Nutrition's acquisition of Butcher's Pet Care highlight the increasing demand for premium pet food products. These deals are driven by evolving consumer preferences for natural, high-quality ingredients and specialized formulas for various health needs and life stages. Brands and manufacturers can adapt to this trend by focusing on innovative solutions that differentiate their offerings and cater to discerning pet parents.

Growing Force of Co-Manufacturing: As larger companies acquire brands, they often seek to optimize their manufacturing operations, leading to a rise in co-manufacturing. This trend presents both opportunities and challenges for manufacturers. While co-manufacturing can provide access to new markets and increased production capacity, it also demands a focus on efficiency, quality control, and the ability to meet the specific claims and requirements of various brands.

Private Equity's Appetite for Pet Food: Private equity firms have become major players in the pet food industry, driving a significant portion of M&A activity. Attracted to the industry's strong growth potential, these firms are often focused on acquiring companies with strong brands and established market positions. Recognizing the investment strategies and priorities of these private equity firms can be key for companies seeking investment or considering an exit strategy.

BSM Capital, our investment support team, understands these private equity firms’ investment strategies and priorities and can be a key resource in this area. BSM Capital leverages real-time category-specific data analytics, a network of over 100 professionals actively working in the pet industry, and the team’s more than 60 years of combined pet industry experience to help companies navigate private equity’s expanded presence in this market.

Keeping an Eye Across the Atlantic: The US and EU Connection

The M&A wave isn't confined to the United States. Our BSM Europe team monitors trends across both sides of the Atlantic closely. European businesses are actively participating in this global consolidation, with companies like United Petfood, VAFO Group, and Inspired Pet Nutrition making significant acquisitions.

An increase in transatlantic M&A activity is anticipated as companies seek to expand into new markets and capitalize on global growth opportunities. This trend necessitates a global perspective for all stakeholders. Understanding regulations, consumer preferences, and competitive dynamics in the US and EU markets will be crucial for navigating the complexities of this interconnected industry.

BSM Partners: Your Guide Through the M&A Maze

Staying informed is only half the battle in this dynamic environment. The key to success is a partner who can translate market data into actionable insights and help navigate the strategic and financial complexities of M&A.

That's where BSM Partners comes in. We possess the expertise to:

• Stay ahead of the trends and claims curves with deep knowledge of consumer preferences, regulatory landscapes, and emerging trends. We develop winning product strategies for brands that align with the evolving needs of pet parents.
• Identify potential acquisition targets or optimize companies for acquisition, leveraging our financial expertise and insider knowledge of the pet food industry. We assess market opportunities, conduct due diligence, and negotiate favorable terms.
• Access our comprehensive M&A tracker (available upon request), a valuable resource that provides a detailed overview of recent transactions in the pet food industry. This "cheat sheet" allows readers to stay abreast of the latest deals and understand their implications for their businesses.

We believe that the future of the pet food industry belongs to those who can adapt and innovate. Let BSM Partners be your trusted advisor in this exciting and ever-changing market.

Follow us on LinkedIn for the latest updates on all things happening here at BSM Partners.

About the Authors

Ada-Miette Thomas is a senior analyst at BSM Partners. She received both bachelor’s and master’s degrees in food science with an emphasis on nutrition. Ada-Miette conducted research with a focus on human nutrition and studied the effects of carbohydrate sources on markers of Metabolic Syndrome in adults.

Émilie Mesnier's passion for pets ignited during a 2007 internship in palatability research and has propelled her ever since. A French-trained food scientist, she now blends two decades of global know-how—nutrition, marketing, sustainability, animal welfare and international growth—into one goal: better foods and lives for animals. A lifelong learner who has absorbed insights from 80-plus business books on strategy and continuous improvement, Émilie turns ideas into action every day. After 16 years in the US and running a small farm animal rescue sanctuary in Utah, Emilie moved children, husband and two senior pets back to France in early 2025 to bring BSM Partners’ full suite of consulting services closer to clients across the European market.