Sunday 15 September 2019

Firms making pet food sector sit up with food fit for humans

Businesses are capitalising on a growing market for real treats like home-made meals, writes Gavin McLoughlin

With concerns growing about obese pets, Irish firms are out to cash in on a lucrative market that provides healthier meals for animals. Stock image
With concerns growing about obese pets, Irish firms are out to cash in on a lucrative market that provides healthier meals for animals. Stock image
Gavin McLoughlin

Gavin McLoughlin

The pet owner has now become the pet parent.

Humanisation is the big buzzword in the pet food industry as the trend for healthy eating spreads from humans to their pets.

It's a move that has presented a major opportunity for Irish Dog Foods - the pet food arm of the Arrow Group, the conglomerate founded by Dan Browne and John and Peter Queally, which also encompasses Dawn Meats.

Initially most of the company's business was in dry-food - the large bags of nuts. The company owns the Madra and Irish Rover brands, as well as Supercat.

But according to chief executive Liam Queally, most of the growth in the last couple of years has come in the snacks and treats area - which is higher margin to boot.

"We initially set up to do natural snacks and treats - pig's ears, roast beef bones, roast pork bones, liver, lungs. We'd do all that kind of stuff dry roasted and maybe add some natural flavours."

Irishman Kevin Glynn left a job at Goldman Sachs to co-found the business, which makes homemade dog food.
Irishman Kevin Glynn left a job at Goldman Sachs to co-found the business, which makes homemade dog food.

But those products were relatively easy for rivals to copy and so innovation became important. The company began making things likes burgers, sausages and steaks for dogs.

Things have progressed even further from there and the company is producing products like salmon cookies, fish skins, and a range of meat treats with flavours ranging from chicken fried rice to maple-glazed ham. "People's attitudes are changing big time. America was a real eye-opener. When we looked at the American market and spoke to some of the big players in the game, it was no longer the housekeeper who was coming in to buy the treats, it was the pet parent. They were spending more on the dogs than they were on themselves," says Queally.

"More often than not the little dogs were their babies. So we went to work on that and we evolved a range of treats. Our beef treats were the only ones in the market that could say hormone-free, grass-fed, and a whole range of other things that nobody else could say.

"Stuff that's natural to us wasn't natural in America so that opened endless opportunities for us."

The company is expecting turnover of around €85m this year and plans to expand aggressively. The company will also seek to grow the dry food business - another evolving area - by bringing more premium products to the market.

On Brexit, Queally says the company's strategy has been to try and find new markets.

"The UK were at one stage 100pc of all our exports. Now they account for less than 20pc. So we've evolved within Europe, we're going to South Africa, America, Canada, Australia. And hopefully very shortly we'll be launching in Singapore and South Korea," Queally said. Another company with an Irish link in this sector is Butternut Box. Irishman Kevin Glynn, pictured, left a job at Goldman Sachs to co-found the business, which makes homemade dog food.

The business model is to home-deliver freshly made meals, which are tailored for the requirements of each individual dog. The company raised £1m in seed funding earlier this year from early-stage investor Passion Capital.

"People view dogs as part of the family, but often, diet-wise, pets get left behind," Glynn told the Irish Independent earlier this year.

"Pet owners are left choosing their dog food in an aisle cluttered with washing powder and bin bags and dominated by a few unhealthy choices."

"There is nothing in the meals we wouldn't eat ourselves," he added.

The men see an opportunity to carve out a slice of the lucrative British pet food market.

Also active in the pet food sector is C&D Foods, a division of Larry Goodman's ABP. That business was set up in 1969 by former Taoiseach Albert Reynolds.

Last year it bought a major French pet-food manufacturer, Continentale Nutrition out of bankruptcy.

At the time Continentale employed 358 people and has sales of €100m a year. C&D had a staff of 1,100 and annual revenue of €350m. It had unsuccessfully tried to acquire the business two years previously.

The company joined ABP in 2008, although the Reynolds family retained an interest.

Sunday Indo Business

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