The COVID-19 pandemic reshaped global industries, and the pet food sector was no exception. From empty store shelves to ingredient shortages, the supply chain faced unprecedented challenges.
As lockdowns took hold in March 2020, pet owners scrambled to stock up, creating surges in demand that left many unable to find their usual brands. Meanwhile, even as pet food manufacturers remained operational as essential businesses, they grappled with shipping disruptions and ingredient scarcity, highlighting the pandemic’s widespread impact on pets and their families.
Though we’re several years down the road from the end of the COVID-19 pandemic, echoes of it are still impacting consumers and businesses alike. Processes and behaviors formed to cope with the global shutdown can still be seen today whether you’re a consumer or a business.
Petfood Industry gathered a cross-section of experts from the pet food space for a roundtable discussion focused on the lingering lessons learned from the global pandemic that shut down the world.
Significant challenges for the pet food industry
Q: What was the most significant impact of the COVID-19 outbreak on the pet food industry?
Louise Calderwood, director of regulatory affairs, American Feed Industry Association (AFIA): Though we believe the U.S. pet food industry can weather any storm, the pandemic taught us where a shift in available ingredients, lack of diversified suppliers, vacancies in key manufacturing positions and gaps in connectivity can pose challenges to the ability to continue providing affordable pet food and treats in a timely way.
For example, reductions in restaurant dining changed how food was packaged and distributed, and this rippled back to changes in available ingredients for pet food. Despite the challenges, we learned how resilient our industry is, thanks in part to the nearly 33,000 hardworking employees across the pet food industry’s commitment to our feathered, furred and finned friends.
Joe Toscano, vice president and director of trade and industry development, Nestlé Purina PetCare: The pandemic challenged every part of our business from sourcing to shipping and marketing to promotions. But, most importantly, for Purina, the pandemic reiterated the important role that our pets play in our lives and society and underscored the responsibility we have as a pet food maker to feed them. It also put a spotlight on just how critical our factory teams are in feeding the nation’s dogs and cats. They were deemed essential workers and certainly were then and still are.
Bob Connolly, vice president sales and marketing, The Peterson Company: As an ingredient supplier to the industry, we really felt the impact from a demand and cost standpoint. It was quite amazing how consumer nervousness and insecurity relative to supply of finished product and ingredients drove demand for our products.
Costs of raw materials and international freight also created challenges as both were constantly changing and created a fluid cost situation. From a supplier standpoint, COVID-19 was an incredibly demanding and rewarding period for The Peterson Company as we felt a great responsibility to our industry and pet owners.
Dennis Funk, vice president, Companion Animal and Aqua Feed with Wenger Equipment: A significant (and rapid) increase in pet ownership created a much higher demand for pet food globally. However, social distancing requirements, workforce reductions, supply chain delays and capacity constraints created a real challenge for pet food producers to keep up with rising demand.
In many situations, producers were pushing their existing equipment beyond its design parameters. As a result, producers began immediately investing in new/expanded production lines, which then required equipment suppliers such as Wenger to design and manufacture machines faster than ever before. Fortunately, we were able to meet this challenge and support our customers who needed additional capacity right away.
Trends that persist today
Q: Which trends that emerged during the pandemic continue to influence the industry today?
Calderwood, AFIA: Expecting supply chain issues at both the domestic and international levels seems to be an unfortunate, perennial trend. Our industry continues to experience trouble at port and border crossings due to labor disputes and geopolitical tension, which adds to shipping costs and creates delays.
These challenges can be further exacerbated with unpredictable weather patterns that can also slow or halt the transport of goods with little warning. AFIA has engaged in a multiyear effort to analyze where the U.S. animal food industry is most vulnerable, such as sourcing key ingredients from single-source suppliers, and provides policymakers with proactive solutions to address these challenges.
One ongoing area of work for AFIA is helping policymakers understand that vitamins, amino acids and minerals, key ingredients used in animal food production, are primarily sourced from China. AFIA is supporting legislation for the U.S. Department of Agriculture (USDA) to analyze this issue and supporting a research study at the Institute for Feed Education and Research (IFEEDER) that will uncover how potential fluctuations in these key ingredients could impact pet health.
Toscano, Nestlé Purina PetCare: The pandemic accelerated changes in where and how pet owners buy their pet care products. Pet owners leaned in more to product delivery via e-commerce, click-and-collect and home delivery services that they may not have been using before, which was a big shift. This was initially done out of necessity for many, but the trends have stuck because of convenience. Subscription-based deliveries have continued to be a priority for retailers.
Connolly, The Peterson Company: All product segments were strong through the pandemic, but the treat segment really took off from what was a segment that was already on the rise. Post-pandemic interest rates and a general trust in the supply chain has caused many producers and consumers to reduce the need for long inventories, and we are now in a shorter lead time mind frame.
Funk, Wenger Equipment: Consumers turned to online ordering for pet foods and treats, and that trend has continued. Many producers have increased online interactions with their customers, opening new marketing and communication opportunities.
From an equipment manufacturing aspect, Wenger developed creative ways to support customers using remote technology that enabled us to answer questions and service equipment, reducing the need for an on-site service call. Today, we continue to offer support to customers via remote interfaces and digital communication tools, which often results in faster problem-solving and improved equipment performance especially for our international customers.
Lessons learned from the pandemic
Q: What would you say is the greatest lesson the pet food industry has learned from the pandemic?
Calderwood, AFIA: The food and agriculture value chain is interconnected and if there is a pinch point at one step, it impacts the entire system.
Toscano, Nestlé Purina PetCare: Like others, we had to make tough choices from a production perspective because of supply chain challenges. This meant suspending some SKUs and being in a constant state of reprioritization. We always prioritized the most vulnerable pets first, making sure our Pro Plan Veterinary Diets were available for pets with special health and nutritional needs. We were also able to lean into the breadth of our portfolio to help ensure we could continue to offer quality pet food for every life stage of dogs and cats and every income level of their owners.
Connolly, The Peterson Company: Never take anything for granted and never forget how important both customer and supplier relationships are. These relationships create the trust, dedication and open communications needed to help both sides through such challenging times.
Funk, Wenger Equipment: The supply chain issues that arose made it clear that producers and equipment manufacturers should consider having multiple supply streams for raw materials, components, ingredients and any other critical aspects that could limit production and hinder the company from meeting order demand.
Of course, this means that producers must have processes and systems in place that allow for consistent quality output even if raw materials come from different suppliers. In a word, flexibility may be the most important outcome for the pet food industry: flexibility to use different ingredients, make different products and adjust quickly to fluctuating demand (up and down).
Adaptation to pandemic-driven ingredient challenges
Q: In what ways have pet food suppliers adapted formulations or sourcing strategies to mitigate ingredient shortages and disruptions experienced during the pandemic?
Toscano, Nestlé Purina PetCare: We continue to focus on meeting consumer demand by scaling our operations to the right levels for continued growth and innovation. Nestlé has made significant capital investments in our operations, not only to add lines and capabilities to our existing factories, but also building and acquiring new facilities to meet growing consumer demand across the U.S.
Connolly, The Peterson Company: Companies understand how important it is to align yourself with reliable trustworthy partners that understand your needs and how this can help mitigate some of the challenges caused by such an event.
Funk, Wenger Equipment: For Wenger, the demand increases during the pandemic pushed us to refocus on innovation – not only for improved equipment performance but also in the way we design, manufacture and provide customer support.
We uncovered ways to streamline our processes and meet aggressive delivery expectations while maintaining our high-quality standards. And we began new remote communication efforts that have now become common practice with our customers worldwide.
Regulatory, legislative impacts
Q: Specifically for AFIA, are there any lingering regulatory or legislative impacts on the pet food industry due to COVID-19?
Calderwood, AFIA: The difficulty sourcing ingredients raised awareness that the pet food industry is unable to swap ingredients in pet food and treats due to strict regulations around pet food labels. AFIA worked with the Food and Drug Administration (FDA) who was willing to address this issue with manufacturers at the time. This issue still exists should future supply chain disruptions occur requiring companies to work with the FDA on a case-by-case basis.
Long-term solutions for supply chain issues
Q: What long-term solutions have been implemented to ensure product availability and address supply chain challenges?
Calderwood, AFIA: Companies should have contingency plans upon contingency plans. Our industry does a great job preparing for animal disease threats by enhancing biosecurity measures and reducing food safety problems with improved current good manufacturing practices.
Many companies already look at what their manufacturing lines may look like with reduced staff with annual cold and flu seasons, and I would suggest that others may consider creating plans for any of the myriad public or animal health emergencies that could occur.
Connolly, The Peterson Company: We have worked very hard to not only strengthen existing partner relationships but also to branch out to make sure we avoid single-source supply situations ensuring uninterrupted supply should such an event ever happen again.