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ADM Animal Nutrition Grows with $1.77B Acquisition

It bought Neovia, a French company focused on animal nutrition.

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CHICAGO — Archer Daniels Midland Co. announced that it has completed its €1.544 billion (US $1.77 billion) acquisition of Neovia, a French company focused on animal nutrition.

“The addition of Neovia represents a major milestone in the execution of our strategic plan to become a global leader in nutrition,” said ADM Chairman and CEO Juan Luciano. “This acquisition — our largest since we added WILD Flavors in 2014 — instantly creates a premier global leader in animal nutrition, while simultaneously providing a strong platform for future growth. It meets our returns objectives, expands our geographic reach, and helps us continue to expand our portfolio and better serve our customers.”

ADM’s acquisition of WILD Flavors in 2014 kicked off the most extensive portfolio transformation in the company’s 115-year history, significantly expanding its human and animal nutrition capabilities. In the animal health and nutrition space, the company has made a series of expansions and investments in recent years, including:

  • Building and renovating three specialty animal nutrition plants in China and four plants in the U.S.
  • Acquiring pet treat manufacturer Crosswind Industries.
  • Expanding pet food ingredient manufacturing capabilities in North America.
  • Investing in state-of-the-art value added complete feed manufacturing facilities in North America.
  • Entering into a partnership with China-based Qingdao Vland Biotech Group and building a research lab in California to develop and commercialize animal feed enzymes.
  • Purchasing Protexin, a provider of probiotic supplements for human wellness as well as a variety of animal markets, including aquaculture, equine, livestock and companion animals.

Now, with the addition of Neovia, ADM Animal Nutrition spans the globe, offering premixes, complete feed, ingredients, pet care solutions, aquaculture, additives and amino acids.

“The acquisition of Neovia marks an important new chapter for ADM Animal Nutrition,” said Pierre Duprat, president, ADM Animal Nutrition. “I have been fortunate enough to meet with talented colleagues from Neovia over the last six months, and I am excited about the global platform this combination of our existing capabilities and Neovia has created to serve our customers and accelerate our growth. Combining our resources, expertise, innovation and research-driven technologies creates something very special: the premier global provider of animal nutrition ingredients and solutions, best-in-class customer service and leading R&D capabilities for our animal nutrition customers across the globe and creating value for our shareholders.”

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Headlines

Pet Food Sales on Amazon Hit $1B

Blue Buffalo was the top-selling brand.

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BOSTON — Pet food sales on Amazon.com reached an estimated $1 billion in 2018, up 20 percent compared to 2017, according to data from Edge by Ascential.

According to the firm, the top five pet food brands (and their share of total pet food sales) on Amazon for 2018 were:

  1. Blue Buffalo (11%)
  2. Purina (9%)
  3. Hill’s (8%)
  4. Wellness (6%)
  5. Greenies (5%)

“Blue Buffalo’s continued top-selling status illustrates how important it is for brands to incorporate in their packaging what consumers are looking for: healthier pet foods,” said Pete Andrews, director of insights at Edge by Ascential. “Blue Buffalo’s top seller contains the keywords ‘Protection Formula’ and ‘Natural’ in the title.

“The brand includes in-depth content on their product detail pages along with complete ingredient lists, nutritional information, numerous customer reviews and peer-answered questions. The Blue Buffalo brand understands how important community is to the pet owner, whether they are shopping online or in-store. By encouraging consumer interaction on Amazon, brands can recreate some of the interactivity that pet owners value from brick-and-mortar stores.”

Other top-performing brands on Amazon in 2018 like No. 2 Purina (up 13 percent year-over-year), No. 10 Rachael Ray (up 27 percent) and No. 6 Fancy Feast (up 17 percent) demonstrate that pet owners are choosing brands with “the right combination of pet nutrition and shopper value,” according to Edge by Ascential.

“Amazon’s own label Wag, launched halfway through 2018, brought in almost $2 million in sales in 2018, a negligible share in the current Pet Food category,” Andrews said. “Not long after its Wag launch, Amazon began offering its dry dog food under the Solimo private brand as well. Much of the on-page content is nearly identical but Solimo actually offers more A+ content and a cheaper equivalent to Wag.

“Whether this is an A/B test on Amazon’s part to identify the effects of small product differences on sales or a transition away from Wag is yet to be determined – but it does suggest that Amazon is not yet ready to challenge major pet food brands head-on while they still gather experimental data.”

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Demand for Sustainable Pet Products Is Up, and Most Firms Aren’t Prepared, Report Finds

225+ responses were collected from pet industry professionals.

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The World Pet Association and the Pet Sustainability Coalition have released a report focusing on sustainability in the pet sector, highlighting advancing business opportunities for environmentally and socially friendly pet product companies.

The report, analyzing over 225 responses from pet industry professionals, reveals a dramatic increase in demand for sustainable products, explores where companies are encountering roadblocks to successful sustainability programs, and examines what tools and resources are available within the industry.

Expectations are increasing, and fast

The data shows a dramatic increase in pressure on businesses to expand their responsibility strictly from shareholder value to now include demonstrating responsible treatment of communities and environments where they do business. The expansion in business accountability means that brands are held accountable not just for their own direct business practices, but also the practices of their tier 1, tier 2 and tier 3 suppliers.

Current sustainability programs are ineffective

Only 23 percent of pet industry professionals rank their own sustainability program as effective, and 26 percent report that they have no sustainability program at all.

Support is needed to create success

This increase in accountability for businesses is fueling a need for more education to inform the industry about what is expected of them and where their current performance is, tools to ease implementation and collaborative opportunities particularly for small businesses that need more leverage to drive systematic improvement in areas that are too large for one company to change on its own.

Download the full report here: https://mailchi.mp/petsustainability.org/industryreport2019

PSC was founded in 2013 with the mission to advance business through environmental and social business practices.

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45-Store Pet Chain Acquired

Its 494 employees will be retained.

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Independent Pet Partners has acquired Chuck & Don’s, a pet supplies chain with 45 locations spread across four states, the Minneapolis/St. Paul Business Journal reports.

Financial terms of the deal were not disclosed.

New York-based Independent Pet Partners plans to retain Chuck & Don’s 494 workers, according to the Business Journal.

Jeff David, CEO of Independent Pet Partners, was quoted saying the acquisition “gives IPP a valuable and strong brand that can help us continue to strive to make pet parenting simple, smart, social and fun.”

Founded in 1990, Chuck & Don’s has locations in Minnesota, Wisconsin, Kansas and Colorado.

Its 2016 sales totaled nearly $68 million.

With this deal, Independent Pet Partners, which has purchased several pet chains, now has 160 stores across 12 states and Washington, D.C., the Business Journal reports.

Read more at the Minneapolis/St. Paul Business Journal

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