Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

Home Products Our experts uncover key changes in consumer lifestyles and product development shaping the global home products market landscape; looking across home care, home and garden and pet care.

Del Monte Goes All-Natural

Paula Flores Profile Picture
Paula Flores Bio

Del Monte, ranked fifth globally in pet food with a 3.5% value share in 2012, has signed a deal to buy Natural Balance, a super-premium label which will help broaden the company’s portfolio in the key US market. Del Monte has struggled of late, with its share stagnating, and so the purchase can be seen as a strong attempt to diversify. Similar motivation prompted rival Procter & Gamble to acquire Natura back in 2010 and so both companies are now looking to non-therapeutic, super-premium pet food as a driver of future value growth.

Natural Balance will certainly add super-premium credibility to the company’s portfolio, which is largely focused on mid-priced and economy platforms through brands such as Kibbles ‘n’ Bits, Meow Mix and Milk-Bone treats. While weakness in the US economy might suggest lower price point products would flourish, it is actually the non-therapeutic premium segment which has thrived, posting a near 4% value CAGR over 2008-2013 in dry dog food, for example. With medium-term forecasts indicating that the same category will be responsible for over 50% of the US$2.6 billion value growth predicted across the US pet food market to 2018, an upper-tier positioning can be seen as all the more important.

Despite the market’s maturity, premiumisation is likely to be driven by consumers’ growing awareness of pet food ingredients. This is also reflected in the rise of organic, all-natural products and more recently the arrival of grain-free offerings. While recent recalls have served to keep safety high on consumers’ list of concerns and continue to remind them of the 2007 Menu Foods’ recall, the premium segment has certainly benefited from perceived advantages when it comes to credibility.

That said, the thought of Del Monte as Natural Balance’s owner might cause some consternation among consumers who have opted for the brand as an alternative to mainstream players, which many still feel have safety issues. Nevertheless, if successful in placating these consumers and maintaining current standards, Del Monte’s move into the natural/non-therapeutic category might be just what the company needs to return to growth. While Del Monte will likely benefit there is good reason to predict the continued rise of other independent players such as Zignature, Halo and Orijen, which will continue to ride on the popularity of super-premium food and their non-association with larger corporations, at least until the next round of M&A.

Interested in more insights? Subscribe to our content

Explore More

Shop Our Reports

A Plant-Based Approach to Sustainability in Asia Pacific

The increasing awareness about the health and challenges of the planet has been translated into accelerated actions and investments by companies and…

View Report

Global Inflation Tracker: Q1 2023

This report examines inflation levels and drivers globally and in key countries. In 2023, global inflation is expected to ease from its peak in 2022, but…

View Report

Surface Care in Latin America

After surface care sales spiked in Latin America in 2020 due to the pandemic, growth slowed in 2021, before slipping into decline in 2022, albeit remaining at…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More