Acquisition expands Above Food's pet food business to approximately US$110M of combined company revenues on a proforma basis
Strengthens customer base, further bolstering Above Food’s current roster of global leading pet food manufacturing customers
Positions Above Food to capitalize on the US$26 billion global plant-based pet food market, projected to grow at a 9% compound annual growth rate (“CAGR”) through 2032
REGINA, Saskatchewan, Aug. 22, 2024 (GLOBE NEWSWIRE) -- Above Food Ingredients Inc. (Nasdaq: ABVE, ABVEW) (“Above Food” or the “Company”), an innovative food company leveraging its vertically integrated supply chain to deliver differentiated ingredients and consumer products, today announced additional details related to its expanded pet food ingredients business in connection with its recent acquisition of the specialty crop food ingredient division (the “Assets”) of Montana-based The Redwood Group, LLC (“TRG”). This strategic acquisition significantly enhances Above Food's presence in the rapidly growing plant-based pet food market, positioning the Company to capitalize on emerging trends and meet increasing consumer demand for high-quality, plant-based pet nutrition.
“This acquisition significantly enhances our position in the rapidly growing plant-based pet food market, expanding our total pet food business to approximately US$110M, or 25% of our combined revenues on a proforma basis”, said Lionel Kambeitz, Founder, President, Chief Executive Officer and Executive Chairman of Above Food. “Furthermore, our seed-to-fork platform uniquely positions us to serve the evolving needs of the plant-based pet food industry, previously demonstrated by delivering a 13% organic CAGR in our legacy pet food business since 2022. By controlling every step from seed selection and farming to ingredient processing and formulation, we offer unparalleled traceability, quality control, and customization capabilities. This vertical integration allows us to develop innovative, nutritious plant-based ingredients specifically tailored for pet food applications, meeting the growing demand for high-quality, sustainable pet nutrition solutions. As pet parents increasingly seek transparent, plant-based options for their pet companions, Above Food's comprehensive approach enables us to be an invaluable partner to leading global pet food manufacturers. We can rapidly respond to market trends, ensure consistent supply of premium ingredients, and support our partners in developing differentiated products.”
Strategic Importance of Leadership in Pet Food Market
The pet food industry represents a substantial and growing opportunity for Above Food, driven by several key factors:
- Large and Growing Market: The US$26 billion global plant-based pet food market is projected to grow at a CAGR of 9% through 2032, according to Future Market Insights. This growth is outpacing the overall pet food market, indicating a strong shift towards consumers adopting plant-based protein formulations for their pets.
- Expanding Pet Ownership: 66% of US households own a pet, according to the American Pet Products Association. The US pet population has been consistently growing at 1-2% annually from 2013-2022, as reported by Euromonitor. This trend is expected to continue, creating a steadily expanding customer base for pet food products.
- Pet Humanization Trend: According to Packaged Facts, 92-96% of US pet owners view their pets as family members. This “humanization” of pets has been a strong long-term trend for over a decade, transforming pet owners into “pet parents” who prioritize their pets' well-being and are willing to invest in premium nutrition options.
- Health and Nutrition Focus: Mirroring trends in human nutrition, pet parents are increasingly seeking healthier, higher-quality food options for their pets. There's a growing demand for fresh, natural, and organic plant-based food products with transparently sourced ingredients. This trend has been further accelerated by the COVID-19 pandemic, with 48% of pet parents reporting feeling closer to their pets due to the pandemic, according to an American Pet Products Association's Pulse Study.
- Plant-Based Innovation: The plant-based food movement is driving innovation in pet food, with ingredients like chickpeas and flaxseed becoming increasingly popular alternatives to traditional soy, corn, and wheat proteins. This shift opens up new opportunities for differentiated ingredient suppliers like Above Food, now North America’s largest chickpea manufacturer following the acquisition of TRG, to become valuable innovation partners with manufacturers in developing novel, nutritious plant-based pet food formulations.
- Market Resilience: The pet category has historically shown resilience during economic downturns, as consumers continue to prioritize spending on their pets even when tightening budgets in other areas. This resilience was demonstrated during both the financial crisis in 2008 and the COVID-19 pandemic when the pet industry experienced positive growth despite a reduced appetite for consumer spending.
About Above Food
Above Food Ingredients Inc. (Nasdaq: ABVE, ABVEW) is an ingredient company that celebrates delicious products made with real, nutritious, flavorful ingredients delivered with transparency. Above Food’s vision is to create a healthier world — one seed, one field, and one bite at a time. With a robust chain of custody of plant proteins, enabled by scaled operations and infrastructure in primary agriculture and processing, and proprietary seed development capabilities that leverage the power of artificial intelligence-driven genomics, Above Food delivers nutritious foods to businesses and consumers with traceability and sustainability. Above Food’s consumer products and brands are available online at www.abovefood.com and in leading grocers across Canada and the United States.
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain “forward-looking information” within the meaning of the United States federal securities laws and applicable Canadian securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” future,” “opportunity,” “plan,” “may,” “should,” “will,” “could,” “will be,” will continue,” and similar expressions and include, without limitation, statements about the ability of or expectations regarding the future performance of our business and operations.
Forward-looking statements are based on the current expectations of Above Food's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. You should carefully consider all of the risks and uncertainties described in the documents filed by the Company with the United States Securities and Exchange Commission, which is available on EDGAR at www.sec.gov/edgar.shtml. There may be additional risks that Above Food presently does not know or that Above Food currently believes are immaterial that could also cause actual results to differ from those contained in forward-looking statements. In addition, forward-looking statements provide Above Food’s expectations, plans or forecasts of future events and views as of the date of this communication. Above Food anticipates that subsequent events and developments will cause Above Food’s assessments to change. However, while Above Food may elect to update these forward-looking statements in the future, Above Food specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Above Food’s assessments as of any date subsequent to the date of this communication. Nothing herein should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results in such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein.
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