In 2022, companies Capital of CascadiaThe index of publicly traded stocks in the pet industry hit record earnings. However, rising material and supply chain costs have taken a toll on these companies’ profits. As pet food company revenue growth slowed during the year, input costs continued to rise.
“These headwinds resulted in significant public stock price compression, with our index falling 9.6%, compared to a 0.4% increase in the S&P 500,” Cascadia analysts wrote in their “Pet Industry Overview: Spring 2023” report.
The Cascadia Index of publicly traded stocks in the pet industry includes Nestle, JM Smucker, soft, FeeAnimal, Central Garden and Pet Company, Neogen, Virbac and Zoetis, as well as other pet care, veterinary and insurance companies. Cascadia Capital is an investment banking and advisory firm based in Seattle, Washington, United States.
In the second half of 2022, the turnover of index companies increased by 3.2%, compared to 12.9% in the second half of 2021. At the same time, the adjusted profit of index companies decreased by 9, 6% in the second half of 2022, compared to a decrease of 30.5% in the second half of 2021.
Pet Food Industry Economy in 2023
In 2023, the pet food industry will face a similar economic situation. Even if incomes continue to rise, these gains could largely result from price inflation. Pet food prices have outpaced the rise in overall consumer price indexes. Relevant producer price indexes suggest that pet food manufacturers’ prices will continue to rise through the remainder of 2023. Producer price indexes increased for meat from carcasses, rendering and meat by-products, as well as transportation and storage.