Pet food and treats expect to account for roughly $67.7 billion in sales in 2025, according to the American Pet Products Association (APPA). The pet food market is incredibly competitive and profitable, which makes it a big draw to manufacturers.
Nevertheless, pet food processors face challenges as the industry continues to evolve. Even major companies, such as Mars, Inc. have their battles.
Challenges pet food manufacturers face in 2025
Mars has historically been known as a chocolate producer, but in 1935, it acquired its first pet food company, Chapel Brothers, Ltd., the group that made Chappie canned dog food. Mars expanded its pet care business in the 1980s and 90s, and around the year 2000, the company’s pet food sector surpassed its chocolate revenue, according to Joydip Dutta, a Senior Engineering Project Manager who works for Mars’ pet food division.
“Pet food makes more money than chocolate now, which is really remarkable,” Dutta says.
By acquiring more companies and building expertise, Mars has been able to grow the sector. In August 2014, Mars acquired Proctor & Gamble’s pet food division, which further strengthened its portfolio. However, despite the growth, integrating company culture with acquisitions remains a notable challenge.
“The main challenge is when you acquire another company,” says Dutta. “The culture is different, right? So, you have your own culture, one way to make product, one way to deal with employees. But when buying another company and bringing them into your portfolio, there’s a cultural shift that happens [that causes you to need to integrate well].”
On the processing side, a prominent company like Mars seems to have its ducks in a row, but as for many companies, continuous improvement remains important.
“It’s not like you have to reinvent the wheel… it’s just making sure you can make [processes] efficient. Bringing new technology [is important], especially with the way the world is moving,” states Dutta.
Namely, Mars is putting effort toward improving its automation.
“We have a vision to make [pet food processing] as automated as possible. So that’s what my team and myself, we come into the place to upgrade the machines and all other infrastructure around it,” Dutta states.
Dutta provides an end-of-line packing example to illustrate how the company would like to increase its automation. After products are packed and palletized, forklift drivers pick up pallets and take them to trailers to be loaded. Ideally, the company would want an automated, unmanned truck to pick up loads. That way, employees can be redistributed to other needed operations.
Dutta says some companies are developing automated loading vehicle solutions, but the challenge in acquiring them is (1), the technology is new, and companies want to buy from a solutions manufacturer with more experience, and (2), the cost is high.
“[In 2024], I saw some companies [with solutions]. They are very new to the business. So maybe, they have a history of three to five years. That may seem high, but not in manufacturing. [Ideally], you want to deal with a supplier who has at least 20 to 30 years of experience,” Dutta explains.
Moreover, Dutta says buying such an automated solution could cost half a million dollars. The technical requirements of the solution are the culprit of the high price.
“It’s not only the hardware, but there’s also a lot of software included, because that robot needs to talk to site IT. The site has our own infrastructure, so that handshake needs to be done, and they will charge you more money for that. [But] every company is different,” Dutta adds.
Trends to take note of and the impact of AI
Refrigerated pet food continues to gain prevalence, as pet owners seek higher quality, fresher food. Dutta sees refrigerated products as a trend that will keep growing, and one Mars plans to further develop.
“We actually don’t make any refrigerated pet food right now, but we are working on it, so it could be on the market in the next year or two,” Dutta shares. “We are still evaluating everything, how that process can be done, because right now we don’t have any refrigeration on the line.”
Dutta believes bypassing traditional dry and wet processes and opting for a minimal processing route will be key to producing a refrigerated product.
Outside of refrigerated food, Dutta says changes in how products are packaged are another notable trend in the industry.
Dutta shares that wet processed product was historically packed in cans, but a shift toward tub packaging has occurred.
“We built a new factory in Arkansas, and that factory got an extension a couple of years ago [exclusively] making small plastic tubs. So, we have about 10 lines in Arkansas doing just that. So, that was a huge change in our packaging,” Dutta shares.
Furthermore, Dutta says the trend of pouch packaging has decreased in prevalence, taking up to an estimated 5% to 10% of the market.
Speaking of markets, Dutta believes AI will change the way the pet food processing industry forecasts its demand.
“Right now, we have a certain volume of product getting sold, right? So, AI can predict what will happen next year, or say, changes coming this Christmas, or an uncertain season,” Dutta says. “I think the forecasting will be better when you inject the AI capability.”
On the technical side of processing, Dutta hopes original equipment manufacturers will build more machines that include AI tools. He notes one important use of AI is its capability to predict when a machine will break down, helping manufacturers get ahead of potential problems.
As pet food processing continues to hold a prominent space in the larger food manufacturing industry, companies like Mars will continue to be on top of processes and trends that make manufacturing more efficient, enhance product quality, and increase sales.