Colgate-Palmolive Dropping Private Label Pet Food BusinessColgate-Palmolive Dropping Private Label Pet Food Business

Clarkston Consulting reported that the global pet food industry hit $147 million and will grow at a CAGR of 5.32% by 2028, with the US holding more than one-third of that growth.

Colgate-Palmolive, which has a pet nutrition portfolio including Hill's Pet Nutrition and private label pet food, shared its 2024 full year and 4th quarter earnings report. The company had $20 billion in net sales for the first time, yet Q4 had a .5% loss in its private label pet nutrition business.

The pet portfolio, which makes up around a quarter of the company's overall sales, was strong despite declines in private label. The sector brought in $1.14 billion from October to December 2024. That’s up 2.6% year over year from $1.11 billion during the same period last year. In Q4 2024 alone, net sales increased 3.3% and organic sales increased 7.4%, including a 0.5% negative impact from lower private label pet volume.

In the Earnings Call, Colgate-Palmolive Chairman, President & CEO, Noel Wallace said, "The fundamentals of the business are really, really strong." He went on to say that there was some slowing in the pet nutrition category but believes it has stabilized.

Pet wellness has been a priority for pet parents and a top driver for the pet supplements category, which is expected to become a $1 billion industry by 2027, reports Grand View Research.

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Hill's Pet Nutrition, which includes a line of Science Diet and Hill's Prescription Diet cat and dog food with formulations for digestive issues, urinary issues, weight issues, proper growth, and more, saw an increase in sales YoY with 2.3% in net sales and 2.9% in organic sales.

"We continue to execute extremely well in the (pet nutrition) category and are very focused on segment growth opportunities in the business" Wallace explained. "We have a very strong dog and cat business but need to excel in the small dog segment, which is the fastest growing part of the market. And we need to excel in the wet segments, and we need to get back to more sustained growth in Europe but overall the business continues to perform well."

The company's largest market, North America, continues to perform exceedingly well, even in a flattish category that Colgate-Palmolive believes will slowly improve with time.

"The new innovation that is coming to market, the winddown of private label and the improved expansion, we think those will drive topline but also drive margin expansion for that business," said Stanley Sutula, chief financial officer at Colgate-Palmolive.

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Colgate Palmolive will continue to focus on scientific and therapeutic variants and innovation that continue to drive differentiation and will value orientation back to the pet owner.