Business

Kansas City finds itself right in the middle of the pet food industry

At Pawsh Wash in Lawrence, a pet grooming and pet supply shop, co-owner Amber Nickel says pet food is a big source of revenue for her store.
At Pawsh Wash in Lawrence, a pet grooming and pet supply shop, co-owner Amber Nickel says pet food is a big source of revenue for her store. Special to The Star

If you had to pick the center of the pet food world — or at least its manufacturing — the region around Kansas City would be a good choice.

Four of the top five pet food companies own manufacturing operations in the animal health corridor, which stretches from Manhattan, Kan., to Columbia, Mo. And Kansas City is right in the middle of that area, so named because of its concentration of companies that make animal medicines and foods and its concentration of veterinary scientists.

By one estimate, the pet food industry employs more than 2,700 people in the Kansas City region. Most of those are manufacturing jobs, but there are also highly paid scientists and veterinarians working in labs at Hill’s Pet Nutrition in Topeka and Nestlé Purina PetCare in St. Joseph.

And that number doesn’t include many more jobs in retail and veterinary businesses.

Hill’s, Nestlé Purina, Mars Petcare and J.M. Smucker’s Big Heart Pet Brands represent 56 percent of global retail pet food sales. Hill’s Pet Nutrition has its corporate headquarters, a manufacturing plant and a lab in Topeka, and Hill’s owns another manufacturing operation in Emporia, Kan. The other large pet food companies are headquartered elsewhere but maintain substantial manufacturing operations in the region.

These four companies generated more than $37 billion in pet food sales in 2012, when the industry produced $65.8 billion in sales worldwide. The global pet food industry is expected to grow to $95.7 billion by 2017, according to PetFoodIndustry.com.

In addition to the biggest companies, north and south of Interstate 70 are several contract food manufacturers, including CJ Foods with 300 employees at its pet food manufacturing operation in Bern in northeast Kansas. Crosswind Industries has 220 employees in Sabetha and Hiawatha, Kan., and 25 employees in Topeka.

“It’s a fascinating business, and it’s concentrated in this part of the world,” said Kent Heermann, president of the Emporia Regional Development Association of East Central Kansas.

Pet food companies like being in the Kansas City area because of the region’s ready supply of meat and grains and easy access to shipping by truck and rail.

The region also is home to veterinary scientists at Kansas State University and to 300 animal health companies, representing the largest concentration of animal health companies in the world, according to an asset study by the KC Animal Health Corridor advocacy group.

Several pet food companies started in the region, including Hill’s in Topeka in the late 1930s. A veterinarian, Mark L. Morris Sr., developed his own pet food formulas because he believed certain health conditions in pets could be managed through carefully formulated nutrition. He got the Hill Packing Co. in Topeka to package his pet foods, and the partnership grew and eventually developed into Hill’s Pet Nutrition.

The company, now owned by Colgate-Palmolive, has 808 employees in Topeka and 128 in Emporia. Hill’s has $2.3 billion in annual sales.

More recently, Angie and Gary Rexroad have launched Love Grub dog food in Lawrence, which markets its food in Lawrence, Topeka and Kansas City. One place it is sold is Pawsh Wash in Lawrence, a pet grooming and pet supply shop. One of its owners, Amber Nickel, says pet food is a big source of revenue for her store.

The industry did have safety problems with adulterated food in 2007 that killed more than 100 pets.

Menu Foods in Emporia was one manufacturer whose food was discovered to contain melamine, a chemical used in various plastics, adhesives, countertops and dishware. The chemical was lined to cases of pets’ kidney failure, and pet food manufacturers now have more stringent safety tests, including checking for melamine.

Menu Foods had about 500 employees at the time, but it was decimated by the pet food recall. Simmons Pet Food of Siloam Springs, Ark., bought Menu Foods from a Canadian investor group at a significant discount in 2010 and has been rebuilding the operation. Heermann said Simmons recently invested in another pet food line in Emporia and has been hiring more employees.

“They’ve almost gained back all the business that they had lost,” Heermann said.

Despite the safety setbacks for some companies, the pet food industry overall has been stable with few layoffs. During tough times, consumers might buy less expensive brands, but they don’t neglect their dogs and cats.

“You have to feed your pet,” said Doug Kinsinger, president and CEO of the Greater Topeka Chamber of Commerce.

As the economy has recovered, the pet food industry, like some other sectors, has had some consolidation.

J.M. Smucker recently completed its purchase of Big Heart Pet Brands in a $6 billion transaction. Dave West, who served as the president and CEO of Big Heart, has joined Smucker as an executive officer, assuming the role of president, Big Heart Pet Food and Snacks. West has also been appointed to the company’s board of directors.

A year ago, Mars bought Procter & Gamble’s pet food business, including Iams, for $2.9 billion. Mars also owns other brand names such as Pedigree, Whiskas and Greenies. Mars has a factory at 1315 N. Chouteau Trafficway in Kansas City.

Demand for all those pet food brands also appears to be healthy.

Brady Pollington, vice president of the Economic Development Corp. of Lawrence and Douglas County, said major retailers are devoting more space to pet food and pet care products.

“If Wal-Mart is dedicating more space to it, you know it’s a trend,” Pollington said.

  Comments