Evolution of China’s expanding pet food sector

FIVE years ago, Petideal was a little-known pet food manufacturer in central China’s Henan province.

Today, the company produces more than one billion yuan (US$149.2mil) worth of pet food annually, exports to 45 countries and regions, and manufactures products for more than 300 brands.

The expansion reflects how Chinese contract manufacturers are evolving into technology-driven partners for global pet food companies.

The company has built its business around an unusual competitive advantage: fresh meat.

Located just 2km from one of China’s largest meat processing plants operated by Shuanghui, Petideal sources most of its raw meat locally.

The ingredients typically enter production within four to seven hours of arriving at the factory, reducing the need for freezing and shortening the supply chain.

“The biggest advantage of Luohe is its food industry ecosystem,” says its chairman An Zhongping.

“Fresh ingredients, processing capacity and skilled workers are all concentrated here.”

As domestic pet ownership rises and overseas customers demand higher-quality products, manufacturers are investing less in low-cost production and more in product development, food safety and supply chain efficiency.

An says overseas customers increasingly evaluate suppliers based on research capabilities and quality control rather than pricing alone.

“Years ago, customers came because China was competitive on cost,” he says.

“Today, they visit our factory to discuss product development and innovation.”

That evolution has helped Petideal win business from both domestic premium brands and overseas customers across Europe, North America and South-East Asia.

One Canadian pet food company with a history spanning more than 70 years recently decided to transfer its China supply chain to Petideal after inspecting the company’s production facilities twice, said An.

The two companies are also planning to jointly establish manufacturing capacity in Canada.

Unlike traditional pet food manufacturers that primarily use meat meal, Petideal has focused on fresh meat formulations.

The company has also invested in sweet potato farms and meat powder production in order to reduce its dependence on imported ingredients and improve supply stability.

Beyond ingredients, Petideal has invested heavily in digital manufacturing.

The company has spent more than 10 million yuan developing its own intelligent manufacturing cloud platform, which tracks production, quality inspection, logistics and raw material usage in real time.

Major customers can access dedicated dashboards to monitor production schedules, quality data and research progress remotely.

“This level of transparency has become increasingly important for international customers,” says An.

“Quality today is not only about inspection. It’s also about traceability.”

The company has also introduced multiple layers of automated quality inspection, including double metal detection on production lines, exceeding common industry practice.

The company’s growth comes as China’s pet economy continues to expand.

China’s pet consumer market now exceeds 300 billion yuan annually, according to company estimates, with pet food accounting for roughly half of total spending.

Demand for premium pet food has encouraged manufacturers to expand production capacity.

Petideal has already completed two production phases in Luohe, Henan province, while operating a wet food factory in neighbouring Shandong province.

Construction is underway on its third and fourth phases, which will add capacity for baked kibble, freeze-dried products and customised premium pet food.

The company is also taking its manufacturing model overseas.

Its first overseas factory, located in Oman, is expected to begin operations this year.

Over the next three years, Petideal plans to establish another two or three overseas production bases as it builds a global manufacturing network.

For China’s pet food manufacturers, the strategy reflects a broader ambition.

Rather than competing solely as low-cost contract producers, companies increasingly hope to export manufacturing expertise, food technology and supply chain management – moving further up the global pet food value chain as demand for premium products continues to grow.

In a separate report, as Chinese pet owners increasingly demand science-backed nutrition rather than traditional pet food, global biotechnology suppliers are moving to tap into a domestic pet economy projected to grow significantly by 2028.

Danish biosolutions company Novonesis has made China a priority market for its new pet business unit, launched in 2025.

The company, formed in 2024 through the merger of enzyme producer Novozymes and probiotic specialist Chr Hansen positions itself not as a pet food brand but as an upstream biotechnology supplier, providing enzymes and microbial solutions for pet nutrition and health.

Its entry reflects a broader shift in China’s fast-growing pet economy, where global pet firms are increasingly targeting the country not only as a consumer market but also as a base for research, production and partnerships with local brands.

“China is both a growth engine and an innovation testing ground for pet nutrition solutions,” says Jack An, head of sales for animal biosolutions in the Asia-Pacific region at Novonesis.

China has become the world’s second-largest pet market, fuelled by rising urban incomes and shifting attitudes towards pet ownership among younger consumers who increasingly treat animals as family members.

The 2026 China Pet Industry White Paper (Consumer Report) stated that the number of pet dogs and cats in the country’s urban areas exceeded 120 million in 2025.

Spending on pet-related consumption reached approximately 312.6 billion yuan in 2025 and is expected to grow to around 405 billion yuan by 2028.

The market is also evolving rapidly.

“Consumers are moving away from marketing claims towards ingredients, scientific evidence and measurable benefits,” Jack says.

“That trend creates opportunities for upstream biotechnology.

“Unlike multinational pet food giants such as Mars Incorporated or Nestle Purina PetCare, Novonesis focuses on supplying functional ingredients, particularly enzymes and probiotics, that manufacturers incorporate into finished products.”

To stay competitive, foreign firms are increasingly localising their supply chains, and Novonesis has expanded its manufacturing and innovation footprint in China.

Industry analysts say China’s pet sector is entering a more mature phase, characterised by stricter regulatory oversight and greater emphasis on scientific validation.

Research from Euromonitor International shows that premiumisation and functional nutrition are key drivers of growth in the global pet food market, a shift that is becoming increasingly evident in China as pet owners treat animals more like family members.

At the same time, competition is intensifying as domestic brands rapidly improve product development and marketing capabilities. — China Daily/ANN