Investing in Pet Food? Market Expansion and ZACMI’s Contribution
Here we are, it’s the highly anticipated episode number 6, the ideal follow-up to the previous one, which (if you haven’t already done so) we warmly invite you to read, because the story of the pea is, to say the least, surprising.
Today, however, we are sending 4 technicians to France to assist one of the most important multinational companies in the world in the pet food sector.
On this occasion, we will not discuss specific pet foods in the usual way, because we already did so in Episode No. 3. Instead, we will share some curious anecdotes about food for our “four-legged friends” and how the industry related to their nutrition has developed, so much so that pet food has become, in recent years, a safe haven asset in economic investments.
With ZACMI, You Are Never Alone
However, we must never forget that the ZACMI Worldwide Tour also serves to provide you with a comprehensive overview of the interventions we carry out at our Customers’ premises, giving you another good reason to choose us.
It’s not just our 70-year of experience that makes the difference, nor just our robust, durable, high-performing, and always innovative machinery that should convince you, but also our post-sales and customer care service that allow us to truly be by your side on every occasion.
What Are We Doing in France?
So here we are, in one of our customers’ production plants which, for privacy reasons, we cannot name.
We left our Italian headquarters with the aim of inspecting two filling and seaming machines that, according to our calculations, needed maintenance.
As you can easily discover by joining the Customer Care Service, we can provide you with an exact report on scheduled maintenance to be carried out, based on the actual working hours of your machinery.
In this way, we can guarantee to minimise (or even eliminate) production stoppages, anticipating problems that could become more serious if not resolved in time.
But back to us.
This time we arrived in France with a tight schedule, as the production of pet food never stops and knows no seasonality. That’s why we sent a team of 4 units. Our 4 specialised technicians analysed the possible worn parts and subsequently created a list of spare parts. This list was then sent to the Customer as a proposal for the purchase of the parts to be replaced.
At this point, the company decided to proceed, fully confirming our post-inspection analysis.
The list thus became an order, and within a few days, the parts were shipped for installation.
But you didn’t think we would leave you alone right at the best part, did you?
In fact, the technicians were once again sent across the Alps for the installation after agreeing on the machine downtime.
In a short time, the seamer and filler underwent the necessary intervention, and production quickly resumed at full capacity. And soon we will be returning to Italy.
Now that you have patiently read how, why, and in what ways we maintain your machinery, it is time to fulfil the promises in our introduction by providing you with some anecdotes about pet food.
Origins of Pet Food. From Initial Controversies to Today’s High Quality
Modern pet food originated in the 1920s when the United States began producing food for companion animals. Initially, these foods were made from industrial by-products such as cereals, fats, and proteins, which were used to create a mix of nutrients for cats and dogs.
These by-products were available in significant quantities and at low cost, making them ideal for the production of pet food.
In the 1950s and 1960s, pet food began to gain popularity, and manufacturers started developing more specific foods for cats and dogs.
However, the use of industrial by-products as ingredients for pet food raised some criticism and controversy. Some argued that these ingredients might not be of the same quality as food produced for humans, pushing strongly for greater regulation.
Currently, indeed, pet food is subject to very strict laws, and manufacturers have greatly improved the composition and overall quality of their products, reaching what is now called human-grade quality.
We discussed this entire evolution in the article mentioned above. But why did the need for greater control of these foods arise? The answer is in the following paragraph.
Billions of Pets. Literally!
How many companion animals are there in Italy? And worldwide? How is their food packaged?
Let’s try to answer these questions to better understand the final point of this article, namely why the pet food market is constantly growing, so much so that it has become, for many financial advisors, a true safe haven asset to rely upon, even during traditional market crises.
In Italy, the population of companion animals is extremely large, with about 65 million specimens. This vast population includes dogs, cats, birds, fish, rodents, and other domestic animals.
The variety of species and breeds of companion animals is very wide. From large dogs to purebred cats, from exotic birds to small rodents, the demand for specific food for each type of animal is constantly growing.
Globally, “only” 57% of the population owns a companion animal. This means that there is a market that could potentially double in the coming years.
Among this 57%, however, 33% own a dog, 23% a cat, 12% a fish or aquarium, 6% a bird, and 6% other domestic animals.
According to the World Health Organization, there are about 1 billion dogs worldwide, with a forecast of continuous growth.
Other estimates indicate that the number of dogs worldwide could be even higher, possibly over 3 billion specimens, although other research suggests that the number is lower, probably around 600-700 million.
To meet the needs of this vast population of companion animals, increasingly considered as part of the family unit, pet food is subjected to more controls, and the quality of the products increases year by year.
Moreover, given the enormous heterogeneity of types of animals, species, and breeds, each with its own specific needs, pet food is packaged in different forms and formats. . It is available in a vast range of options, from the classic pouches and cans of wet and dry food to bags of snacks and treats, it is available in a vast range of options.
In addition to traditional packaging, the pet food sector is also experimenting with innovative packaging solutions, such as resealable pouches, single-portion packages, and eco-friendly packaging, to offer greater convenience and sustainability to owners.
In all this, ZACMI machinery is at the forefront.
Indeed, the packaging of pet food plays a crucial role in maintaining the freshness, safety, and quality of food for companion animals. Moreover, attractive and informative packaging can influence – at the marketing level – consumers’ purchasing choices.
The keyword is, therefore, growth.
- growth in the number of pets
- growth in the number of species considered companions
- growth in the quality of raw materials
- growth in regulation and, above all,
- growth in production.
The Pet Food Market as a True Investment Opportunity
The global pet food market is currently worth several tens of billions of dollars, with the top two companies in the sector (Mars Petcare and Purina) generating over $33 billion in revenue.
In recent years, many significant financial operations have taken place in the sector, such as the PTO for the German company Zooplus (valued at 3 billion euros) and the change of ownership of the Italian group Arcaplanet.
This demonstrates the interest of institutional investors in the pet food business, driven by an estimated growth potential of around 8% per year in the medium term.
There is a dedicated fund, Allianz Pet and Animal Wellbeing, which recorded a return of +28% in 2020 and approximately +22% in the first 10 months of 2021.
In the United States, the ProShares Pet Care ETF (ticker: PAWZ) is listed, an index fund that invests in companies related to the pet economy, although it is not harmonised and therefore has some constraints for Italian investors.
In addition to specialised funds, investors can consider directly purchasing shares of leading companies in the pet food sector, such as the Italian companies Monge, Farmina, Agras, and Morando.
The pet economy, which includes the pet food market, is estimated, as we have extensively demonstrated, to be continuously growing, with forecasts predicting it will reach $350 billion globally by 2027.
This positive trend seems destined to consolidate, also due to the increase in the pet population, particularly cats and dogs, and the ageing population.
In summary, the pet food market is emerging as a thriving investment sector, supported by solid development prospects and growing interest from institutional investors.
The available investment tools, such as dedicated funds and ETFs, offer investors the opportunity to gain exposure to this trend.
ZACMI and Pet Food
As you have certainly understood from reading this article (and the previous one on the same topic, in which we aimed to provide you with a comprehensive overview of this sector), ZACMI has long recognised the importance of ensuring that this substantial and growing number of consumers can purchase high-quality products for their pets, packaged in a safe and risk-free manner for the animal’s health.
This is why we have been chosen by the largest multinationals in the sector.
ZACMI’s machinery has always prioritised strict compliance with hygiene and safety regulations, with the same attention given to food intended for humans.
Moreover, as you are now aware, none of our customers are ever left alone. Our on-site assistance service aims to provide you with all the tools to best manage your production line and to anticipate problems and potential issues with quick and efficient solutions.
Indeed, as we also state elsewhere on this site: “Among the aspects that most drive and motivate the ZACMI team in their achievements are uptime, quality, and efficiency. If we are able to offer maximum performance with total peace of mind, while optimising your O.E.E. at the same time, we will have kept our promise!“