Animal Food Manufacturer

Nonetheless, there are 1200 animal and pet food manufacturers in the United States and 255 manufacturers located in the State of California according to Dun & Bradstreet. 

California And US Animal Pet Food Feed Production Landscape

A typical animal feed manufacturer employs 31 workers and generates about $34 million annually. A typical pet food manufacturer employs 79 workers and generates $80 million annually.

• The pet and animal food manufacturing industry consists of about 1,200 companies that employ 66,000 workers and generate about $56 billion annually.
• Animal feed manufacturers account for 77% of companies and 58% of industry sales. The poultry and swine industries are the largest consumers of animal feed.
• Pet food manufacturing is highly concentrated, with the top 20 companies accounting for 86% of sales. Animal feed manufacturing is less concentrated, with the top 20 companies accounting for about 50% of sales.
• Large animal feed companies include Land O'Lakes, Cargill, and Archer Daniels Midland. Most major pet food brands are owned by large consumer product companies, such as Mars (Pedigree, Iams), Nestle (Purina), and Colgate-Palmolive (Hill's Science Diet).

Source - Virtual IQ | NAICS 3111, SIC 2047, 2048

In California, as in the US, an increasing share of animal feed and pet food manufacturers are owned by small and medium-sized companies accounting for 57 percent. 

A recent study showed that the share of animal and pet food manufacturers owned by:

• female entrepreneurs are 27% 
• followed by 12.7% veteran owned 
• and finally, 12% are owned by minorities.

Forty-three percent are classified under a corporate entity.

Get A Copy Of The Full-39-Pages-Pet-Animal-Food-Manufacturers-Industry-Report: DOWNLOAD

Strong Growth Drives M&A Activity 

The pet food and treat industry saw unprecedented activity in 2022, with 35 mergers and acquisitions occurring alone in the first half of 2022. These lower- to middle-market transactions totaled over $121 billion for 2021 - a figure that speaks volumes about investor demand which may very well be showing no signs of slowing down anytime soon. 

According to Carol Frank from BirdsEye Advisory Group, private equity firms are financing major deals as industry leaders strive to meet consumer demands while at the same time growing their market share. 

It appears Warren Buffett's famous words ring true: "If you don't find a way to make money while you sleep, you will work until you die."

Rogerson Business Services have been brokering manufacturing companies since 2006 in California. We have sold many manufacturing-related businesses in various niches and sectors. Most recently, we sold a $36 million manufacturing company deal in 2021. 

Send us an email to support@rogersonbusinessservices.com and get the full list of manufacturers sold. 

The market is bullish in California, but certain factors can influence this market environment. 

Let’s dive in…

5 Buy-Sell Business Factors in 2023

First Factor: Interest Rates Outlook 

The pet and animal feed production industry is an attractive investment for private equity firms, strategic buyers, and acquirers alike. 

With 2023 marking a great time to sell your lower middle market manufacturing company in the first quarter, now could be the perfect opportunity: current interest rates make it particularly attractive to strategic buyers, but not so much to private equity; whilst its recession-proof nature practically ensures the security of funds invested. 

In light of recent Fed action towards keeping high rates elevated long-term - this looks like an opportune moment! Selling your business now is the perfect economic time to make you laugh all the way to the bank. 

Second Factor: Strategic Buyers Bullish

California is home to some of the most sought-after strategic buyers in pet food, like:

• Dog Food 
• Animal Feed 
• Cat Food 
• Specialty Nutrition Gourmet Pet Foods. 

Yet one Berkeley-based company stands out from them all: Wild Earth strives for clean protein and nutrition-packed dog foods without any harm coming to animals or their environment - a noble ambition if there ever was one! 

Plus they've developed a "cellular-based meat broth topper" that's about to be launched within the industry as its first cell-based product. 

Talk about taking sustainability up several notches! We can thank Wild Earth too; an astounding 30% of US consumption comes from pets' stomachs alone (woof!). With products such as this plant & cellular-based offering, it could well reduce our environmental footprint significantly – let’s pawsitivity set us on a course here folks!

Third Factor: Availability Of Capital 

With capital readily available, now is the perfect time to capitalize on great business opportunities. 

Whether you're looking for growth or an exit strategy in 2023, a forward-thinking pet food brand that keeps its financials impeccably organized can provide strong valuation metrics and ensure success! 

Warren Buffett would approve.

Fourth Factor: Taxes 

California understands that taxes can be complex. 

A lucky break this past year put the state in a better spot when it comes to capital gains-- no thanks to Biden's proposed hikes! 

Thankfully, taxpayers remain savvy on how their investments are taxed - even if Warren Buffet requires extra help figuring out his tax bill.

Five: Timing The Sale

Animal and pet food manufacturers in California might have to wait until 2028 for the optimal exit or capital raise opportunity when economic cycles reach their peak. But those near retirement should carefully evaluate if they are prepared to do so; after all, timing is everything! 

Pet food manufacturers have a choice to make - wait for the market to rebound in 5-10 years, or capitalize on potential growth now by assessing the market conditions of early 2023. Timing is critical as strategizing appropriately could lead to valuations that maximize profits later down the road.

With just a bit of strategic planning from today's business owners, that next growth cycle may prove incredibly lucrative indeed.

Despite sounding the alarm bells, Rogerson Business Services continues to defy expectations and thrive in the buy-sell market. Last year saw a record high; this coming year is predicted to be even more remarkable! The 2022 business trading climate has been fueled by several factors that are sure to stay around for 2023 - setting an impressive trend of growth for years ahead. 

Get A Copy Of The Latest Pet-Animal Food Manufacturers Industry Report: DOWNLOAD

2023 Will Be an Even Better Year to Sell your animal feed production manufacturing company in California if the Timing is Right. Why?

With an aging "baby boomer" demographic and a predicted stronger financial performance of businesses in 2022, Rogerson Business Services is expecting to see higher cash flow multiples that will incentivize more sellers as they consider their exit from the buy-sell market. 

Warren Buffett concurs: it could be prime time for transitioning owners looking to capitalize on these favorable conditions!

Rogerson Business Services is thrilled to forecast that the 2023 buy-sell landscape in California's pet and animal food manufacturing industry will be an attractive playground for buyers, sellers, and investors alike. 

Retiring business owners can look forward to a highly efficient deal process with generous cash flow multiples as rewards for years of work dedicated to success. 

This could very likely prove one of Warren Buffett’s famous investment aphorisms: “Price is what you pay; value is what you get”!

California is Poised to Overtake Germany

According to Bloomberg, California is poised to overtake Germany as the world’s 4th largest economy, continuing to outperform the nation and other countries in GDP growth, companies’ market value, renewable energy, and more.

This growth and prominence within the global economy will lead to increased demand for pet and animal food manufacturing companies with strong production capabilities. 

As such, strategic buyers, financial investors, venture capitalists, private equity groups, family offices, high net-worth individuals, and other stakeholders are likely to show interest in this sector.

These entities will be looking for companies with strong financials, good management teams, and the potential to generate long-term value through organic and inorganic growth.

To maximize value, these companies must pay attention to costs including labor, raw materials, transportation, production processes, and other related expenses. 

Additionally, manufacturers should focus on understanding consumer habits and preferences; innovating new products; improving quality control; and investing in research and development to stay ahead of the competition. 

Companies should also explore opportunities for new markets, customers, and partnerships.

Furthermore, they must develop efficient business models that make digital transformation a priority while ensuring compliance with existing regulations. 

Finally, strategic buyers will be looking for companies with an international presence or those that can help them expand into global markets.

In conclusion, when it comes to survival in today's competitive market, manufacturers need to take into account a variety of factors such as costs, consumer preferences and trends, quality control, research & development, digital transformation, and international trade. Working on these elements will help companies remain viable and profitable in California.

“While critics often say California’s best days are behind us, reality proves otherwise – our economic growth and job gains continue to fuel the nation’s economy,” said Governor Newsom. “California’s values and entrepreneurial spirit have powered this ascent to becoming the 4th biggest economy in the world, and we’ll continue doubling down on industries of the future, like renewables and clean energy. I feel tremendous pride in California’s resilience, leadership, and formula for success.”

Demand for Animal Feed In California: DOWNLOAD THE FULL REPORT