Above Food Ingredients has expanded its pet food ingredients business through the acquisition of Redwood Group (TRG), an employee-owned supply chain and ingredients company that sources, processes and packages commodities for domestic and international customers. The Montana-based company’s products include grains, cereals, oilseeds, pulses and other alternative protein sources for human and pet food manufacturers.
“This strategic acquisition significantly strengthens Above Food’s presence in the rapidly growing plant-based pet food market and positions the Company to capitalize on emerging trends and meet increasing consumer demand for high-quality, plant-based pet food,” said Lionel Kambeitz, Founder, President, CEO and Chairman of Above Food.
“This acquisition significantly strengthens our position in the fast-growing plant-based pet food market and expands our total pet food business to approximately $110 million, or 25% of our total revenue on a pro forma basis,” said Kambeitz. “In addition, with our seed-to-fork platform, we are uniquely positioned to meet the evolving needs of the plant-based pet food industry, which we have already demonstrated by achieving a 13% organic compound annual growth rate (CAGR) in our legacy pet food business since 2022.
By controlling every step, from seed selection and cultivation to processing and ingredient formulation, Above Food can offer traceability, quality control and customization options, Kambeitz said.
“This vertical integration allows us to develop innovative, nutritious plant-based ingredients specifically tailored to pet food, meeting the growing demand for high-quality, sustainable pet food solutions,” he noted. “As pet owners increasingly seek transparent, plant-based options for their pets, Above Food’s comprehensive approach allows us to be an invaluable partner to leading global pet food manufacturers. We can respond quickly to market trends, ensure a consistent supply of premium ingredients and support our partners in developing differentiated products.”
Importance of the pet food market
According to Above Food, the pet food industry represents a significant and growing opportunity for the company based on several key factors:
- Large and growing market: The $26 billion global plant-based pet food market is expected to grow at a compound annual growth rate of 9% through 2032, according to Future Market Insights. This growth is outpacing the overall pet food market and indicates a strong trend of consumers using plant-based protein supplements for their pets.
- Increasing pet population: According to the American Pet Products Association, 66% of U.S. households own a pet. According to Euromonitor, the pet population in the U.S. grew by 1-2% annually from 2013 to 2022. This trend is expected to continue, leading to an ever-growing 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 pet humanization 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 nutritional options.
- Focus on health and nutrition: Similar to human nutrition, pet owners are increasingly looking for healthier and higher quality food options for their pets. There is a growing demand for fresh, natural and organic plant-based foods with transparent ingredients. This trend has been accelerated by the COVID-19 pandemic. According to a Pulse study by the American Pet Products Association, 48% of pet owners reported feeling closer to their pets due to the pandemic.
- Plant-based innovation: The plant-based food movement is driving innovation in pet food. Ingredients like chickpeas and flaxseed are becoming increasingly popular alternatives to traditional proteins from soy, corn and wheat. This shift is creating new opportunities for differentiated ingredient suppliers like Above Food, which is now North America’s largest chickpea producer following its acquisition of TRG, to become manufacturers’ innovation partners in developing novel, nutritious plant-based pet food formulations.
- Market stability: The pet category has historically proven resilient during economic downturns as consumers continue to prioritize spending on their pets even as they cut budgets in other areas. This resilience was evident during both the 2008 financial crisis and the COVID-19 pandemic, when the pet industry experienced positive growth despite a reduction in consumer spending.
Adapted from a press release.
