Pet food industry sets sights on Spain

The Mars investment in Ávila and the acquisition of Happets confirm the interest of young and old alike

According to the Facts & Figures 2021 report issued by the European Pet Food Industry Federation (Fediaf), Spain is the European country with the highest number of pet dogs per capita. This is a draw for pet food brands, which have made several moves in recent years to position themselves in the Spanish market and grow internationally.

One of the latest investments announced in February was by the American company Mars (the same company that produces the well-known M&M's product). The details of this transaction were made public during a visit by the Minister for Industry, Trade and Tourism, Reyes Maroto, to the company's pet food production plant in Arévalo (Ávila) to catch up on the progress of an expansion that has already begun.

New production line
The multinational will in fact invest a total of 50 million euros in this expansion, with the installation of a second production line to increase production from the current 26,000 tonnes per year to 70,000 tonnes by 2024. 70 new direct jobs will be created when it is operational, in addition to the 150 employees currently working at the plant. Use of raw materials from the region, which currently account for 90% of its consumption, will also be maintained.

As Rez Hassan, General Manager of Mars Iberia, explained during the visit, “The pet care category is strategic for Mars both globally and in Spain”. But it is not the only company in the sector that has set its sights on Spain. Back in 2018, Belgian group United Petfood, a European leader, acquired Mercadona's dry dog and cat food supplier, the Aragonese group Bynsa.

The Argentinian company DrZoo arrived in Spain two years ago with the support of ICEX-Invest In Spain to make Spain the base for its expansion into Europe. It already distributes to six EU countries now and in July it started up its first local production plant in Valencia, with an investment of 1.2 million euros.

Europe's largest
As data compiled by the website www.petfoodindustry.com indicates, United Petfood was Europe's largest pet food company by revenue in 2021. It is followed in the rankings by Spain's Agrolimen, which does in turn own another company situated in sixth place, Affinity Petcare.

Small companies, even in the customised pet food segment, also attract the attention of investors. The most recent deal took place last September, when Portugal's Barkyn announced the acquisition of its rival Happets, a Barcelona-based start-up focused on dog nutrition.

Spanish R&D
French group ADM, for its part, has had a production site in Rivas-Vaciamadrid (Madrid) for over twenty years, where over a hundred people work. With 9,000 square metres of floor space, Setna's facilities also have room for innovation, with development programmes running in collaboration with universities and international experts. 

But it is not only the sector's own companies that are looking to Spain. Investment funds have also started to make a move. This is the case with Portobello, which acquired Elmubas in July 2019, a Spanish manufacturer of extruded dry dog and cat food, and in what the press described as “a tough bid” which purportedly involved a figure of 200 million euros.

Solid foundations
The decision to invest in this company was made because it is an “attractive industry with solid foundations: resilient and non-cyclical and with positive organic growth dynamics”, the fund explains on its website. It also highlights its organic and inorganic growth potential and the 25 years’ experience of its management team.

In October, the US Department of Agriculture's own Foreign Agricultural Service identified Spain as one of the top three potential destinations for pet food exports. According to their report, Spain's import demand has grown steadily over the last five years, and the United States is one of its main suppliers. One of the reasons, it explains, is the growing pet population and pet owners' awareness of their nutritional needs.

Photo: Mars and Barkyn