Aug 23, 2022

Pet & Animal Care Sector M&A Update – August 2022

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Emerging Pet & Animal Care Sector Attract Consumer Demand and Acquirer Interest

Sustained pet humanization trends and a surge in pet adoptions during the pandemic contributed to record sales growth and merger & acquisition (M&A) activity in the Pet & Animal Care sector in 2021. In year-to-date (YTD) 2022, the Pet & Animal Care sector continues to witness strong consumer spending, demonstrating the defensibility of the space amid inflation and recession concerns. Notably, e-commerce pet product and service provider Chewy (NYSE:CHWY) reported that fiscal year (FY) Q1 2022 net sales increased 13.7% year-over-year (YOY) due to resilient consumer demand and pricing strength in its Consumables and Healthcare categories, according to its earnings call.1

E-commerce integration has become vital for sector players as ~30% of all pet product sales are done online, according to Packaged Facts.2 Traditional in-person retailers that shift to an omnichannel model through investment in e-commerce platforms stand to benefit from channel diversification. Notably, omnichannel pet sales from March 2021 through March 2022 exceeded $68 billion, an increase of 14.7% compared to the previous year, according to Nielsen.3 In addition, online subscription-based models drive recurring revenue, fostering repeat customers and enhanced sales visibility. Many brands and retailers have pursued this opportunity by introducing subscription offerings including Bocce’s Bakery, McLovin’s Pet, Lily’s Kitchen, Butternut Box, and Pet Supplies Plus.

While Capstone expects consumer spending to remain intact, inflation and supply chain shocks will continue to pressure the margins in the Pet sector. In order to prevent margin compression, companies must be able to effectively pass elevated production and sourcing costs onto the consumer. Pet owners are expected to continue to pay elevated prices for personalized veterinary services, higher quality goods, and healthy foods and treats. In addition, premium priced products are often less vulnerable to customer attrition because the products can attract a more affluent and health conscious consumer that is less price sensitive.

Supply chain issues, inflation, and a looming recession are creating yet another opportunity for the Pet space to prove itself invincible.  Investors looking for a safe haven during this current market unrest are actively pursuing opportunities in the Pet sector.  Not a week goes by that I don’t field a call from a PE firm looking to enter or expand in the space. 

Tom ElliottManaging Director, Capstone Partners

Non-Traditional Pet Food and Supplement Formats Emerge Amid Shifting Demand

As premium pet products have proven their resilience, new non-traditional pet food and supplement formats will enter the market. While conventional formats still dominate the Food category, growth in the Raw Frozen, Refrigerated, and Freeze-dried categories is outpacing traditional Dry Kibble and Wet formats, according to Petfood Industry.4 Pet food and supplement niches have historically followed human trends with consumers’ considerations of their own diets aligning with what they feed their pets. Recently, collagen, a common ingredient used in human food and supplements, has gained traction in Canine, Feline, and Equine marketplaces. With age, the body’s collagen production slows down which contributes to arthritic issues and skin quality deterioration, according to Home Alive Pets.5 Due to its effectiveness in enhancing pet mobility, skin and coat quality, and digestion, the Global Collagen market is expected to expand at a compound annual growth rate (CAGR) of 8.3%, reaching $7.2 billion in 2028, according to The Insight Partners.6 Similarly, the Pet Cannabidiol (CBD) Supplement category has benefited from the momentum in the overall Cannabis market. The growing CBD consumer base has translated to an expanding Pet CBD market as 73% of consumers that purchase pet CBD supplements use CBD products themselves, according to a survey in Q1 2021 by Brightfield Group.7 In addition, millennial consumers have demonstrated the largest interest in CBD pet products, supporting a strong long-term outlook for category revenue as younger generations increasingly purchase pets.

The Pet CBD market is projected to grow to $1.1 billion by the end of 2026, driven by continued product innovation and increased awareness of the positive benefits of CBD for pets. Pet treats and supplements with proven benefits, such as Collagen and CBD, are expected to see strong acquirer interest.  Similar to their own consumption patterns, pet parents are seeking products that improve the health and longevity of pets. We expect to see more M&A activity involving pet brands that are able to successfully follow human supplement trends.

Pet & Animal Care Sector M&A Activity Continues to Accelerate Following Historic Year

Through the midpoint of the year, M&A volume in the Pet & Animal Care sector has flourished with 66 transactions announced or closed through Q2, marking a 37.5% increase from the same period in 2021. Both strategic (57.6% of deals) and financial buyers (42.4%) remain active across all segments of the Pet & Animal Care sector despite macroeconomic headwinds. Notably, the robust M&A volume in the Pet & Animal Care space has occurred amid a backdrop of slowing transaction volume in the broader market. Overall middle market M&A activity is down 3.4% YOY through Q2, according to Capstone Partners.

The Veterinary & Health segment continues to lead sector M&A activity, comprising 51.5% of YTD transactions and setting the stage for another year of strong transaction volume. Privately held consolidators account for 35.3% of M&A in this segment, as they continue to scale through acquisition. However, the abundance of privately owned businesses and their proven cash flow capabilities have prompted private equity firms to build out platforms in the space. Private equity platform (11.8%) and add-on (41.2%) deals accounted for a combined 53% of the transactions in the Veterinary & Healthy segment to-date. Notably, for private equity firms, veterinary clinics present a low-risk, high-reward opportunity, often generating a 4x-5x return, according to Entrepreneur.8

Healthy pet food and supplement companies will continue to be attractive acquisition targets as strategics and private equity-backed businesses look to add on-trend products in growing categories to their existing offerings. This has been exemplified by Antelope, an Alpine Investors-backed provider of pet consumables that acquired Diggin’ Your Dog and Super Snouts, a supplier of pet CBD supplements in June 2022 (undisclosed). Read more about the transaction below.

Notable Healthy Pet Food and Supplements Transactions

Due to solid pandemic tailwinds and ongoing pet humanization, the Healthy Pet Food and Supplement segments have attracted significant acquisition interest. Outlined below are recent notable transactions in the segments.

  • Fuzzy Acquires Dandy (May 2022, undisclosed) - Digital pet health company Fuzzy acquired Dandy for an undisclosed sum. Dandy is a personalized pet supplement company that utilizes an online quiz to determine the health needs of its customers. Dandy plans to introduce additional products, catering to different pet types, with the intention of launching in multiple major retailers by 2023, according to a press release.9

Over the past 12 months, Fuzzy has recorded a 533% increase in telehealth consults as well as a 447% growth in revenue across its e-commerce platform in 2021. The acquisition of Dandy will expand Fuzzy’s e-commerce pet healthcare capabilities, helping tailor its offerings to match the growing number of pets.

  • Antelope acquires Diggin' Your Dog and Super Snouts (June 2022, undisclosed) – Since its August 2021 launch, pet wellness platform Antelope has completed three acquisitions. Most recently, the company acquired Diggin’ Your Dog and Super Snouts, a supplier of pet CBD supplements and treats. Diggin’ Your Dog currently has five product lines including Diggin' Your Dog, FiRM Up!, Super Snouts, Stash Treat Company, and Super Snouts Hemp Company. Notably, Super Snouts was the first pet CBD brand to add water-soluble CBD delivery for superior bioavailability and therapeutic functionality, according to a press release.10 Diggin’ Your Dog and Super Snouts products are chemical-free and certified by the National Animal Supplement Council.

"The proof is in the pudding, the business is doing really well, they're very profitable and they're a lean team. They've been able to do a lot with very little because customers are coming to them and repeat buying and are extremely loyal, extremely fanatical about their products. Our job is to get their products in front of more customers so more people can discover them,” said Wendy Wen, Founder and CEO of Antelope, in the exclusive Q&A with Capstone Partners below.

Company Q&A: Antelope

Capstone interviewed consumer brands entrepreneur Wendy Wen, Founder and CEO of Antelope, to discuss its recent acquisition of Diggin’ Your Dog and Super Snouts and attractive categories in the Pet & Animal Care sector. In August 2021, people-driven private equity firm Alpine Investors, together with Wendy Wen, launched Antelope with the mission to elevate the lives of all pets by delivering the highest quality products across all consumable categories. Antelope is an omnichannel pet consumer platform that aims to buy, build, and grow the best pet consumable brands across all verticals. To learn more about Antelope visit

Wendy Wen, Founder and CEO of Antelope

Wendy is the proud owner of pups Poke, Mochi, and Hoku. Her vision is for Antelope to be the one-stop shop for pet owners searching for all-natural products with healthy, limited ingredients. Wendy partnered with Alpine Investors in May 2021 to create Antelope and transform the Pet industry.

Previously, Wendy was the Co-Founder and COO of SENREVE, a digitally native, omnichannel luxury handbag brand where she built the business into a globally recognized brand in less than five years.

What makes Antelope unique?

Antelope’s value proposition is that we want to be the Procter & Gamble/Honest Company of pets. We want to be a conglomerate with multiple brands underneath our umbrella and elevate the standards of the Pet Health industry. The word “antelope” comes from “ante” and “lope,” “ante” means to increase the stakes, and “lope” means to run with a bounding stride. We want to be jumping toward elevating the standards of the Pet industry. We want Antelope to be known in the industry for doing the diligence of finding interesting brands on the right side of health and wellness trends—similar to how Honest Company’s baby products are known to be natural and chemical free.

Frankly, we find that innovation in the Pet space isn't happening with the larger conglomerates just because they're so big. Instead, innovation is happening on the long-tail end with mom-and-pop owners. We want to partner with the innovators with the best ingredients and products to help them optimize their marketing, distribution, and help them scale to a level that they are unable to reach on their own; because there's power in economies of scale. That's how the original idea for Antelope came about, we believed that there were innovative brands out there that we could help.

From an operational standpoint, what makes a company attractive to Antelope?

I think omnichannel distribution is the way to go. We are all about owning every channel that our customer is in because our customer is not uniquely online or offline today, they're everywhere. The key is to be where the customer is when they are looking for healthy, high-quality, natural pet food, treats, and supplements. Going after just one channel (such as just direct-to-consumer) is going to be challenging in the future. You need to have multiple legs in your stool, in your distribution strategy.

Again, with scale, you get leverage across everything—shipping, logistics, warehousing, and data and information with regards to your customers. That's the vision Antelope is trying to realize, we want to leverage our scale across different brands to help all our brands do better from an operational perspective.

Could you speak about your acquisition of Diggin’ Your Dog and Super Snouts? What made this target particularly attractive?

Number one, our criteria is that we're looking for profitable businesses. We're finding companies and products that have a pull in the market, meaning customers are coming back and buying more because the products work. Diggin’ Your Dog, Super Snouts, and Stash, have this interesting dynamic where they have absolutely fanatical customers, it’s the same for Bocce’s Bakery. The people who have tried their products have seen that it works because their products are backed by the best science and technology.

We want to help companies get to the next level by helping them increase brand awareness and get into multiple channels. With regards to CBD, I am a staunch believer that legalization is in the future. On the human side, I'm actually an angel investor in an edibles brand and we've seen that with every single election cycle, there are more states that are legalizing cannabis and there's a lot of science to support that CBD and hemp can really help your animals as well. There are customers who swear by CBD to calm their dogs during fireworks, reduce anxiety while traveling on a plane, or help pain tolerance when going through surgery or cancer treatments.

The founders of Diggin’ Your Dog and Super Snouts came up with certain products to help their own pet. They had a dog who was nearing the end of his life from a cancer diagnosis, and just by giving him the right supplements, he was able to have a much higher quality of life and even elongate his life. We really believe in the formulation of Diggin’ Your Dog and Super Snouts. We believe that the founders are truly passionate animal lovers who started the business because they wanted to create something better for their own pets. The proof is in the pudding, the business is doing really well, they're very profitable and they're a lean team. They've been able to do a lot with very little because customers are coming to them and repeat buying and are extremely loyal, extremely fanatical about their products. Our job is to get their products in front of more customers so more people can discover them.

Are you interested in acquiring additional supplements companies or pursuing other Pet categories?

We have grand ambitions to own all the Consumables categories within Pet. We're actually looking at everything holistically and not just supplements or treats. We are interested in food, cleaning, shampoos, and conditioners. We are also interested in different forms of treats and other health and wellness products. That's not to say we're not interested in supplements, but we feel like we've made some progress on that aisle of the pet store and we'd like to continue foraying into other aisles.

Are you primarily evaluating target companies that provide products or are you pursuing services companies as well?

I would say Doggo was an exception primarily because there is just such a natural synergistic opportunity when it comes to pet insurance. Number one, it generates recurring revenue, the reason we're interested in consumables is because of the recurring revenue dynamic. When you finish a bag of treats, you buy another bag, when you finish a bag of food, you buy another bag. Secondly, what we saw in the Pet Insurance industry is that there is so much white space. It's 2% penetrated in the United States, meaning all pet insurance brokers out there are going after the 98% of people who don't have any pet insurance.

Pet insurance is one of those interesting categories that is not only growing, but the growth is accelerating year-over-year. I think it was 30% or 28% last year and it was only 26% the year before, and 24% the year before. If you look at the U.K. and other countries, the penetration is much higher. If you simply model out where the industry is going, there is significant growth potential for Doggo. We wanted a horse in the race and if we become a conglomerate with multiple CPG [consumer packaged goods] brands under our umbrella, we’ll have so much access to direct and wholesale customers to cross-sell and to be able to offer them insurance on top of that is just an easy, no brainer. We've seen this model work.

Is Antelope considering investments in the Healthy Pet Food space?

We've talked to some interesting targets in this space that have gotten profitable traction and that's what we're looking for: traction. None of our acquisitions are at scale. We are trying to catch them when they've demonstrated product market fit and they need some help to get to the next level, whether it's hiring, infrastructure, capital and resources, or marketing dollars. We’re open to pet food brands that are profitable and have demonstrated traction.

Where do you stand with regards to direct-to-consumer pet food brands?

We're open to brands that are able to grow profitably. If a brand has figured out a direct-to-consumer channel that allows them to grow profitably, we would definitely be interested. Frozen food is really hard to ship. We haven't yet come across a frozen direct-to-consumer brand that is very profitable, but we're just getting started, we haven't spoken to everybody in the space yet.

How does Antelope ensure a rewarding exit opportunity for founders?

All our founders walk away extremely happy. They not only care about the monetary reward of their exit but also that their brand finds a home that is going to allow them to thrive and not get swallowed up by other larger brands or broken up and sold for pieces. They want to know that the team is going to have their jobs retained and, in fact, their employees are going to get better career opportunities being a part of a larger umbrella with multiple roles and growth paths that weren't accessible to them before. Those are the reasons founders want to sell to us, not just for the money, and they are happy with their payout as well. Founding a company is like raising a baby, and sellers are most happy when they find a place for their baby to grow up and become a celebrity on the world stage of pet brands, and that’s what we’re here to help with.

What is your favorite aspect of working with the brands that you invest in?

It's the teams, we love working with the teams of these amazing businesses, helping them design career paths, and giving them best practices. Our Employee Net Promoter Score for Bocce’s went from zero at the time of acquisition to 82 today, which is really high. And that's something I'm incredibly proud of. At our last offsite in June, seeing the energy around the team, seeing everyone buy into the vision of where Bocce’s and Antelope are going, and hearing a lot of people voice their passion for their jobs, gave me a lot of purpose.

We're here to build a lasting business in Antelope and we want Antelope to be a place where customers know that we stand for health and wellness for their pets, retailers and wholesalers know that our products will fly off their shelves if they carry us, and founders will know that their businesses will have a nice home and that we're going to help their brands realize their full potential. We want employees to believe that working for Antelope is going to accelerate their career faster than if they worked elsewhere and that they are going to work amongst the smartest people with the best training, the best coaching, and the best development growth path.

To discuss sector M&A activity, provide an update on your business, or learn about Capstone's wide range of advisory services and Pet Food & Animal Care sector knowledge, please contact Managing Director Tom Elliott


  1. The Motley Fool, “Chewy, Inc. (CHWY) Q1 2022 Earnings Call Transcript,”, accessed August 1, 2022.
  2. Packaged Facts, “Amazon, Chewy Pet Product E-Commerce,”, accessed August 1, 2022.
  3. NielsenIQ, “Consumers focus on sustainable pet ownership,”, accessed August 1, 2022.
  4. Petfood Industry, “Raw, freeze-dried, other pet foods gain consumer traction,”, accessed August 1, 2022.
  5. Home Alive Pets, “Collagen for Dogs: What is it and Why Does Your Dog Need it?”, accessed August 1, 2022.
  6. PR Newswire, “Collagen Market Size Worth $7.20Bn, Globally, by 2028, at 8.3% CAGR- Exclusive Report by The Insight Partners,”, accessed August 7, 2022.
  7. Brightfield Group, “How Big is the Pet CBD Market?”, accessed August 3, 2022.
  8. Entrepreneur, “How Veterinary Consolidators Are Building a Future-Proof Enterprise,” , accessed August 7, 2022.
  9. Pet Business, “Fuzzy Acquires Dandy and Expands Leadership Team,”,telehealth%20and%20e%2Dcommerce%20offerings, accessed August 3, 2022.
  10. Alpine, “Antelope Acquires Pet CBD Supplement and Treat Company, Diggin’ Your Dog and Super Snouts,”, accessed August 3, 2022.

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