Dive Brief:

• Cargill has purchased two U.S. feed mills to expand its production and distribution of animal and pet nutrition products, the global commodity trader said last week.

• The Minneapolis-based food giant acquired a feed mill in Denver, Colorado, and another in Kansas City, Kansas, from Compana Pet Brands, according to the release. Financial terms were not disclosed.

• The deal builds on the company’s animal nutrition innovation and research efforts after agreeing to sell some meat and grain assets in recent months.

Dive Insight:

Cargill is looking to expand its U.S. presence in the fast-growing pet food industry, which has ballooned since the pandemic and is not expected to slow down.

Pet food sales have risen, even as ownership rates stabilized following a rush of adoptions at the start of COVID-19. Consumers spent $147 billion on pet care in 2023, with expenditures set to hit $250 billion by the end of the decade.

Cargill primarily deals in livestock animal nutrition, but it owns the license to sell Purina pet products outside of the United States. As a leading ingredients provider, the company offers its services to other pet food manufacturers to help them formulate and distribute products. In April, Nestle-owned Purina and Cargill launched a partnership aimed at promoting regenerative agriculture practices.

The two new feed mills will help Cargill grow its "full portfolio" in animal nutrition and better serve a "range of customers, from the larger farmer/rancher to the local retailer who sells horse treats and pet food,” Mariano Berdegue, senior vice president for Cargill’s Animal Nutrition and Health Americas business, said in a statement.

The Denver feed mill has dedicated packing lines and employs more than 35 workers, according to a release. Cargill plans to retain the workers and expand the facility to make it a “modernized, flagship feed mill.”

The newly acquired Kansas City mill is located near an existing Cargill feed facility, expanding the company's presence as a key supplier in the area. No workforce details were provided, including whether Cargill would retain current employees.

“This transaction is mutually beneficial as Cargill will continue to manufacture our product,” Compana CEO Greg Pearson said in a statement. “We are excited to work together in the years ahead.”

In 2022, Cargill invested $50 million to expand and renovate its Global Animal Nutrition Innovation Center in Elk River, Minnesota, which is set to include an onsite feed mill.