Food and consumables represented over 70% of sales and remained strong sales pillars for the company. Most sales (76%) were performed in-store. Online sales accounted for 23% of Musti’s business, a slight increase of 1%.

Operating profit also showed a positive incline of nearly €7 million (€7.6M) to €37.8 million ($41.2M).

The retailer’s Annual Report 2023 points out that the average spend per loyal customer increased to €182.7 (€200) despite the effects of the unfavorable currency exchange rates. A year ago, the average expenditure was slightly lower, €181.5 (€198.9).

The number of loyal customers from October 2022 to September 2023 increased by 6.1% to 1,543 thousand across Finland, Sweden and Norway.

New pet food factory

The complete acquisition of Premium Pet Food Suomi Oy’s pet food plant in Lieto, Finland, earlier in the year is one of the drivers behind these numbers.

According to CEO David Rönnberg, the integration of the new factory is going “very well.”

“The benefits, both financial and operational, are already visible. The investment in the factory has strengthened our commitment to sustainably produced products and will be a key success driver going forward,” he says.

Musti believes that the investment in the factory has strengthened their commitment to sustainably produced products and “will be a key success driver going forward.”

Potential acquisition

After Portuguese multinational Sonae entered a bid of €868 million ($947M) to take over the Finnish company, a consortium has been formed for the voluntary recommended public cash tender offer of all outstanding shares in Musti Group.

The offer price is €26 ($28.3) cash settled for each share validly accepted during the offer. Musti’s Board of Directors has unanimously decided to recommend that the company’s shareholders accept the tender.

The offer period began on 18 December 2023 and will expire on 5 February 2024 unless there is an extension.

The association’s Post-Pandemic State of the Industry Survey 2023 concludes that its members hit a revenue of $94,563 (€86,095) in 2022, an increase of 37.6% from $68,699 (€62,547) in 2021, a year when COVID restrictions were in fuller force.

The number of visits performed increased from 2,849 in 2021 to 3,667 in 2022.

“The resurgence of travel, return of pet parents to work and increased number of pets adopted during the pandemic have all contributed to the increase in average pet-sitter revenue and households served,” says PSI President Beth Stultz-Hairston.

Adapting to client demand

In a conversation with GlobalPETS, Stultz-Hairston noted that the services offered by pet sitters have increased since the pandemic to adapt to client demand.

“From offering deep litter box cleaning packages to transportation to the vet or groomer, [PSI] adopted additional safety protocols, such as contactless dog walking or paperless payment and forms,” she adds.

According to Stultz-Hairston, professional pet sitters are already achieving unprecedented financial success, surpassing their pre-pandemic earning potential.

Currently, the average cost of a basic pet care visit in the US is $24.18 (€22), while a dog-walking visit costs $22.55 (€20.40).

Most of the services offered by PSI members are for cats (96%), dogs (94%), small animals (73%), birds (70%), freshwater fish (66%) and reptiles & amphibians (56%).

The new proposal has laid out the main points it will address, which involve ensuring minimum common animal welfare standards for breeding. This includes the keeping and placing of dogs and cats bred or kept in establishments on the market.

The legislative text also proposes strict traceability requirements, together with automated checks for the online sale of animals. According to the EU Commission, this will help authorities control the breeding and trade of dogs and cats and buyers to check that the identification and registration process is correct.

Brussels officials expect this new regulation to resolve the divergence between Member States on animal welfare standards for the professional breeding, keeping and selling of dogs and cats.

Countries will have to report every 3 years to the European Commission on the application of the new set of rules.

Online trade and registration

According to official figures, trade in dogs and cats has grown considerably in recent years and now represents an annual value of €1.3 billion ($1.4B).

The proposal establishes a mandatory identification and registration of dogs and cats in national databases to fight illegal trade and better control animal welfare conditions.

The estimated number of pet owners who purchased a cat or dog online is around 60%. Those acquiring an animal through online platforms will now be able to verify the authenticity of the animal. The prospective owner can do this by cross-checking identification and registration through a website connected to national databases.

Reducing animal suffering

Non-EU countries exporting dogs and cats into Europe must also register animals accordingly and fulfill the basic welfare requirements.

The body exporting the animal must provide the person acquiring it proof of its identification and registration and list its vital information, for example, breed, sex, country and date of birth.

Under the stated guidelines, animals kept by breeders and sellers must meet minimum requirements to ensure that their needs are met and that they are healthy when passed to their new owners.

Some conditions that must be adhered to include providing dogs and cats with the necessary quantity and quality food to receive proper nutrition and hydration. In addition, the EU Commission wrote that it is vital to ensure ease of movement and to keep the animal in a safe and clean environment.

Europe also wants to establish stricter limits on the maximum breeding frequency and age of the animals that can be used for breeding.

Next steps

The Federation of Veterinarians (FVE) and other associations recently called EU officials to publish the new proposal.

“The veterinary profession has long been working towards and calling for EU rules to protect the welfare of dogs and cats, including mandatory identification and registration,” says Nancy De Briyne, Executive Director of FVE.

The legislative text will now be submitted to the European Parliament and the Council for consideration. The European Food Safety Authority (EFSA) will deliver a scientific opinion on the proposed measures by March 2025.

The company told investors it plans to open between 4 and 8 new practices by the end of next year.

The practices will be supplemented with Chewy’s custom-built open platform, which can be applied both to Chewy Vet Care and third-party partner practices. According to Mita Malhotra, President of Chewy Health, expanding into veterinary care is a “natural step” in Chewy’s evolution.

Chewy Vet Care is another addition to Chewy’s pet health portfolio, which includes Connect with a Vet, a pet pharmacy and tele-triage service, and CarePlus, an insurance branch.

$3 billion

The announcement comes just a few months after retailer giant Walmart announced the opening of a new pet service center in Georgia.

According to the latest figures, Chewy Health made over $3 billion (€2.7B) between Q3 2022 and Q3 2023. Internal research conducted by the retailer suggests that 50% of US pet parents would “definitely” or “probably” want to switch to Chewy Vet Care clinics if presented with this service.

Warning for unapproved animal antibiotics

Chewy has also come under fire recently as it received a warning from the U.S. Food and Drug Administration (FDA) for selling products containing unapproved antibiotics and other antimicrobial drugs for animals, such as penicillin and amoxicillin.

The FDA warns that these could potentially “contribute to the development of antimicrobial resistance, which affects both human and animal health.”

The retailer has been granted until the end of the year to state how they will address the violations, failure to which may result in the regulator taking legal action, which may include product seizure or a court order to stop the distribution of unapproved products.

While 50% of Indian pet parents in big cities are inclined to use online vet consultations due to convenience and accessibility, less than 2 out of 10 respondents (16%) use teleconsultations.

30% of pet parents complained about challenges accessing veterinary services. Nearly half (48%) of respondents living in tier 1 cities and 36% living in tier 2 and 3 cities reported that cost of care is the major challenge in accessing veterinary care.

According to Supertails, India houses over 32 million pets but only has 5,000–7,000 companion animal veterinarians. This results in a ratio of just 1 vet per 5,000 pets.

Health care attitudes

The survey notes a gap in pet health awareness. The survey found that only around a third of dog and cat parents (35% and 32%) adhered to regular 3-month checkups.

Almost half of pet parents (49%) overlooked the need for regular deworming, and 41% occasionally forgot to ensure they vaccinated their pets at the right time.

Dermatological issues are the largest concern, with 51% of the pets reported to have been affected by skin and fur issues. 36% reported facing gastrointestinal challenges that prompted timely intervention from pet parents.

A sign of the segment’s potential is seen in the optimism that companies in the sector have for 2024.

Entobel

Entobel, a Singapore-based biotech company that produces insect-based ingredients from black soldier fly larvae (BSFL), recently launched its second insect production facility in Vũng Tàu province in Vietnam.

According to the company, the facility features 50 levels of vertical rearing, incorporating automation via robotics, cutting-edge sensors and data analytics that enhance productivity.

With an annual production capacity of 10,000 tons, it is expected to generate $25–30 million (€23–€28M) in revenue. “We hope to reach at least 50% of the capacity by the end of next year from the site,” Co-Founder Gaetan Crielaard tells GlobalPETS.

Entobel’s first production plant, established 3 years ago, helped the company understand the local market. Its second facility also caters to the regional market. Entobel’s priority is to expand within the country. However, other countries in the region, such as Indonesia, are also on its expansion map.

New funding in 2024

After closing a $30 million (€28.3M) funding round in 2022, Entobel plans to re-enter the fundraising market in the first half of 2024. “The Series C fundraiser will be bigger than the Series B. So, we want to go quite aggressively in terms of capacity increase”, adds Crielaard.

After Entobel’s first demonstration facility, the company decided to scale up the automation capabilities and facility size of the second Vũng Tàu site to reduce the product and labor cost per ton of produced insect meal. As Gaetan shares, the next step for Entobel would be to supply the volumes that the market needs and have an impact.

“We want to reach 100,000 tons of insect meal per year capacity in the next 10 years. And that’s why we need to raise funds to grow because it’s still a CapEx-intensive (capital expenditure) industry.”

Increasing demand

Entobel currently exports around 50% of its production for pet food applications. Its key markets include Australia, Japan and the US. Gaetan asserts that the market “is not yet ready to pay a huge premium for sustainability today.” However, the company is looking for potential distribution partners in developing markets like Japan.

The company also seems to hold a strong regional presence: “In Vietnam, we are able to offer [our insect meal] product at a price that is competitive against imported fishmeal,” and in the pet food market, Entobel’s clients “seem to be happy” with the offered cost value equation, indicating market competitiveness.

“We want to focus on what we’re good at producing: a quality insect protein at a competitive price,” Gaetan concludes.

Percuro

UK-based insect-protein pet food producer decided earlier in the year to push its production capacity and expand its portfolio into new markets after witnessing a 300% growth in its 2023 performance.

“Our ambition over the next 3–5 years is to capture 1% or $180 million (€167.4M) in revenue in the premium pet food market,” comments CEO Brett Vye.

Percuro currently offers 8 SKUs for the dry pet food market for puppies and adult dogs and looks forward to expanding its range of products to cats in the first half of 2024. The company told other media about their inclination toward the wet cat food market as it offers better opportunities than dry cat food.

The 2020-established company has raised £2.5 million (€2.9M/$3.1M) in funding to date. Percuro’s projected revenue for 2023 is reportedly over £1 million (€1.1M/$1.2M).

International expansion

Apart from its home base in the UK, Percuro is first targeting markets in Germany, the United Arab Emirates (UAE) and Asian countries such as Singapore, Malaysia, Taiwan and Japan.

Vye says that the US also presents a massive opportunity for the company. However, he cautioned that this competitive market requires a cautious and calculated approach. The company will begin distributing from New York when it enters the market.

“This recognition enhances our brand visibility and credibility, attracting environmentally-conscious consumers and potential business partners,” Andreas Böhm, the company’s Brand Marketing Manager, tells GlobalPETS.

This award acknowledges companies committed to addressing climate change since 2008. These companies have implemented innovative and environmentally friendly processes in their operations.

The environmental impact

Green Petfood’s products are based on meat-reduced or completely meat-free recipes, focusing on plant proteins (like lentils, peas or insects).

To combat CO2 generated through the production, transport and packaging, the brand is developing solutions for recipes and packaging to reduce the production of greenhouse gasses. Green Petfood has also partnered with forest conservation and climate protection organizations to protect habitats and offset emissions.

“We even compensate for a full 25% more than we emit. Anyone who feeds Green Petfood can significantly reduce their own CO2 footprint as well as the paw print of their cat or dog,” says Rafael Rybandt, Brand Lead at Green Petfood.

The pet food brand is currently present in 33 countries—from European markets to South Korea, Panama, Tanzania and Philippines—and it is hoping to expand its portfolio in 2024.

On the other hand, the company achieved a net loss of $35.8 million from a profit of $2.3 million (€2.1M) in the previous year.

Chewy also revealed its 9-month earnings, reaching net sales of $8.3 billion (€7.7B), up from $7.39 billion (€6.86B) during the same period in 2022.

Net income was much higher over the 9 months this year at $5.3 million (€4.9M) compared to the $43 million (€39.9M) last year.

Canada and Black Friday

After announcing its international expansion to Canada in June, the Florida-based online pet retailer confirmed that initial customer demand “has been strong” and that the sign-ups for recurrent orders (Autoship) are “healthy.”

Chewy started operations in Toronto, the largest metropolitan area in Canada, and plans “to take a gradual and responsible approach to expanding [their] footprint.”

The company also stressed that shopping events like Black Friday are a considerable opportunity for businesses like Chewy. According to the online pet retailer, this year’s event was a success, as traffic and sales exceeded expectations across all categories.

Yearly guidance

Chewy has reviewed its full-year guidance to fall between $11.08 billion and $11.1 billion (€10.29B–€10.3B). Previously, the retailer had forecasted $11.15 billion to $11.35 billion (€10.35B–€10.54B).

“While we are confident in our ability to continue gaining market share and deliver attractive levels of profitability, our guidance reflects the continued macro pressures observed industrywide,” reads a letter to shareholders.

Analysts from Market Watch noted that shares in the company dipped by 8% after the earnings announcement and said that this year, there has been a huge decline of 48% in shares.

Leadership changes

David Reeder, currently the CFO at semiconductor multinational GlobalFoundries, will take on the role of Chewy’s new Chief Financial Officer (CFO) in early 2024. Current interim CFO Stacy Bowman will serve as Chief Accounting Officer.

CEO Sumit Singh said that Reeder is a “highly experienced” finance executive who has driven strong results across a range of complex industries.

Although he does not come from a pet background, Reeder has experience leading financial strategy and is well versed in the insurance industry, as he was CEO of Florida-based Tower Hill Insurance Group.

Opportunity to boost finances

In the 9 months to 1 July, the Arkansas-based business hit net sales of $39.53 billion (€37B), falling flat compared to the same period in 2022, meaning the insect protein sector could be a good option to boost its performance.

According to finance expert Andrew Lokenauth, insect protein is a rapidly growing market, and Protix’s technology and expertise in the field will help Tyson stay “ahead of the curve.”

“Protix will likely have a positive impact on Tyson’s financial performance, as it diversifies the company’s protein offerings and provides access to a growing market,” Lokenauth told GlobalPETS. He added that this is something that Tyson may be enticed by following the slump in yearly growth in the company’s net sales.

On the other hand, Tyson’s reputation and expertise will help Protix scale its operations and expand its reach. Under the investment, the 2 companies have plans to construct and operate a low-footprint insect ingredient facility. The new plant is expected to produce up to 70,000 tons of live larvae (LLE) annually.

Sustainability goals

Lokenauth points out that the partnership “aligns with Tyson’s sustainability goals, as insect protein is considered more environmentally friendly.”

“The partnership will also help Tyson reduce its dependence on traditional meat products, which are subject to fluctuations in market demand and supply chain disruptions,” he adds.

In addition, Tyson “sees the potential” for insect protein to play a significant role in meeting the growing demand for alternative protein sources.

Following pet industry trends

The food processing company’s interest in alternative proteins follows ongoing trends in the sector.

“Tyson’s interest also probably stems from the role insect proteins can play as a potentially less expensive and environmentally sustainable alternative to meat protein,” Alexandra Kazaks, Ph.D., from the RDN Nutrition Division at the Chicago-based Institute of Food Technologists (IFT) tells GlobalPETS.

However, stepping into the insect market does not come without its challenges. Kazaks highlights that “perhaps” the most substantial challenge facing insect-based-ingredient feed businesses is gaining consumer acceptance.

“This challenge is particularly pronounced in the context of pet food, where consumer preferences play a significant role in product choices,” she adds.

For Kazaks, it is important that businesses “employ innovative education and marketing strategies to shift consumer mindset and promote the benefits of insect-based ingredients.”

The Pet Food Institute (PFI) believes consumers have become more willing to buy products made with insect protein. “Consumer acceptance has reached a tipping point, where more than 50% of pet parents would consider trying insect-containing pet food. There is a 10 to 15% growth in demand every year,” PFI president Dana Brooks told GlobalPETS in 2022.

Respondents reported cutting back on veterinary care (55%), pet insurance (51%), dog food in terms of either quality or price (50%), doggy day care and walking services (46%) and even grooming (34%).

A smaller percentage of dog owners also cut back on treats (25%), toys (22%) and spaying or neutering (16%). According to the survey, only 1 in 10 respondents did not cut back on anything in particular.

Basic needs

The OnePoll survey concluded that more than 6 out of 10 respondents had delayed or cut back on basic necessities like food, housing, clothing and personal healthcare, leisure experiences like travel or events and home renovations due to the cost of caring for their dogs.

A similar percentage (65%) had sought financial assistance from friends and family, while more than half (57%) had considered rehoming their dogs. 47% had gone into or experienced debt.

A little under half (48%) had to delay or cut back on education development expenses, and 33% had taken on second jobs or pursued new opportunities to earn extra income.

Around half of the respondents reported spending between $51 (€48) and $200 (€190) per month on pet care. Only 2 out of 10 reportedly spend between $251(€231) and $500 (€460) each month.

Dogs vs. children

Almost 4 out of 10 of those surveyed opted to delay or refrain from having children in favor of owning a dog.

The OnePoll survey unveils that dog owners in the Northeast of the country made up the highest percentage of those who chose to own dogs over having children (61%) compared to those in the West (37%), Midwest (26%), Southwest (26%) and Southeast (21%).

Most (81%) respondents attributed this to a dog being easier to care for than a child. 74% said it was due to affordability, while 54% found dog ownership easier and required less planning.

Younger dog owners prioritized their pets when making housing decisions, with 78% of respondents aged 18–26 admitting their dogs played a role in decisions involving where they live.

This age group also ranked highest when it came to taking into consideration their dogs’ well-being when it came to making career decisions (88%), romantic relationships (80%) and taking advantage of travel opportunities (75%).