Special Report: Pet Distribution

The pet distribution sector is ever-changing. Compared to 10, five, or even one year ago, the distribution channel of the pet industry is unrecognizable. 

Pet Food Experts led the way in terms of recent consolidation with the company’s 2025 acquisition of key Animal Supply assets. “The industry has experienced significant shifts, especially with the rise of e-commerce and direct-to-consumer models,” Michael Baker, President and CEO of Pet Food Experts, previously shared. “At the same time, there’s been a growing demand for fresh and frozen pet foods, requiring distributors to build out specialized cold-chain capabilities. The companies that have been able to adapt and innovate are the ones continuing to thrive.”

Competition was once black and white: Which company could shine brighter than its competitors? Today, competition has expanded to include companies making bold decisions to join forces with other distributors that share similar values and goals. It involves leaders considering which companies bring attributes and capabilities to the table that my company doesn’t currently have. It seems supporting one another is the way forward rather than removing the competition. 

Stand-out distributors are teaming up for a variety of strategic reasons intended to stabilize their presence and position themselves for an enduring future in pet. Other valid reasons address improving customer service and bolstering partnerships with existing manufacturers. One incentive that brings like-minded distributors together is the opportunity it presents to expand their presence into markets they haven’t tapped into yet. 

Baker volunteered, “Industry and business experts have been pointing out the excess capacity in pet distribution for well over a decade. In fact, Central Garden and Pet led the earliest distribution consolidation efforts in the 90s, including acquiring one of my family’s businesses called Rumford Aquarium (wholesale) in 1996! Animal Supply and Phillips Pet Food and Supplies acquired over 30 smaller distributors into their networks and had the best of intentions, not once but twice, to combine forces, creating a truly national and scaled distribution platform. Needless to say, it is harder than it looks to consolidate systems, operational networks, and especially company cultures at any scale. As the cost of doing business continues to be a challenge for all distributors of any size, further consolidation will be necessary to provide retailers and vendors with a supply chain that is stable and financially strong.”

As for Pet Food Experts’ experience, “I’m as confident as ever that the decision to acquire select assets of ASC was the right strategic move for PFX and I couldn’t be more proud of my team,” Baker said. “Empowering our existing vendors to offer their products to pet parents will hopefully result in fewer brands choosing large-scale e-retailers, thus protecting more controlled and sustainable prices. This will be an invaluable win for our brick-and-mortar retailers.”

Phillips Pet Food & Supplies and Central Garden & Pet

In April, pet food and supplies distributor Phillips Pet Food & Supplies shook the industry by announcing it had agreed to form a strategic joint venture with Central Garden & Pet, a leader in the pet and garden sectors. 

Phillips and Central noted a major perk of the newly formed partnership was how it would unlock new growth opportunities while enhancing service and value for vendors, customers, and employees.

By working together, Phillips and Central will form a nationally scaled distribution platform with an extensive reach across regions. The companies will have the resources to improve customer service capabilities and will operate a more streamlined and productive supply chain. Bringing these two companies together means there will be a sturdy grid that will serve sizable retail channels, including specialty retailers, big box, e-commerce, farm & feed, second-party fulfillment and third-party logistics.

Under the provisions of the agreement, Central will receive cash proceeds and retain a 20 percent ownership stake in the integrated group. Phillips and its existing investors will hold a controlling interest. The joint venture will operate as an independent company. 

Phillips and Central’s existing and future partners will reap the benefit of working with distributors that offer a portfolio covering pet food, supplies, fresh and frozen products across categories such as dog, cat, aquatics, small animal, equine, and reptile. 

The entity will have a presence in all 50 states and is positioned to offer added value throughout the pet care ecosystem. Vendors will benefit from broader market access, and customers will benefit from the tools and resources necessary to support long-term growth.

“By bringing together complementary scale and service capabilities nationwide, this transaction represents a milestone for the Phillips platform and the broader pet distribution ecosystem,” said Grant Mitchell, Deputy CIO of Axar Capital Management. “This transaction uniquely positions Phillips to support the evolving needs of our customers and vendors nationwide while maintaining the service orientation that has defined both businesses for decades.”

Pet Food Experts & Animal Supply

Last year, Pet Food Experts caused an industry-wide stir when it acquired select assets of Animal Supply Company, one of the major distributors of pet. To guide Pet Food Experts through the acquisition, Michael Baker returned to lead his family’s company and succeeded the then CEO and President Greg Cyr, who stepped down from the role. 

“PFX has long been a distinguished leader in the industry, and this acquisition marks a significant step forward,” Tim Batterson, CEO and President of Animal Supply Company, said at the time of the acquisition. “Throughout my 11 years at ASC, Michael and I have shared a vision for this partnership, and I’m excited to collaborate with him and the entire team to ensure a smooth and seamless transition.”

As a result of the acquisition, Pet Food Experts benefited from operating the most expansive cold-chain network in the industry. This meant Pet Food Experts could now offer fresh and frozen direct-to-store service to a broad scope of retailers, including pet superstores, national and regional chains, farm and feed stores, and neighborhood pet shops. Further, Pet Food Experts could now incorporate Animal Supply Company’s 3PL direct-to-consumer and veterinary clinic capabilities into Pet Food Experts’ expanded distribution network.

“This transaction significantly expands our geographic reach into the Southeast—a long-time goal for Pet Food Experts and me!” Baker explained. “In addition, we now have distribution centers in Stockton, CA and Orrville, OH, along with strategically located cross-docks and forward distribution centers. These infrastructure enhancements allow us to better serve retailers and vendor partners across a broader footprint and in a more customer-centric way, both from a supply chain and service perspective. This expansion also significantly strengthens our cold-chain capabilities by adding refrigerated pet food into our already diverse frozen raw and gently cooked brand portfolio.”

The acquisition of select assets of Animal Supply Company stemmed from a long-standing relationship between the two organizations, Baker previously shared. 

“I credit Animal Supply Company—and its original founders and management team—with inspiring many of the foundational strategic decisions my team and I made in the early 2000s,” Baker said. 

By the time Baker acquired Pet Food Experts from his parents in 2005, he had already been in contact with Animal Supply Company to seek their guidance on how to diversify its brand portfolio and better position the business for the future. 

“Fast forward to 2024 and our ninth formal attempt to combine the two businesses,” Baker said. “Despite Animal Supply Company’s distressed financial condition, my partners and I felt compelled to move forward with our transaction and are extremely bullish about the future! Many facets of this transaction fit our vision to strengthen and expand Pet Food Experts’ role in the pet specialty distribution space. This transaction is unlike any we’ve undertaken before, in both scale and complexity. Animal Supply Company had built a well-established cold chain (refrigerated and frozen), a robust delivery network (including cross docks and forward distribution centers) and a 3PL channel network—all of which enhance and diversify Pet Food Experts’ logistical capabilities.”

Combining capabilities with Animal Supply Company also meant that Pet Food Experts’ geographic footprint rapidly expanded, its infrastructure was reinforced and that Pet Food Experts could raise their standards of customer service, thereby making them a better partner for existing and future vendors. 

“While Animal Supply Company’s neighborhood pet business has been impacted by its financial challenges, Pet Food Experts remains deeply committed to supporting neighborhood pet retailers, who have always been, and will continue to be, our main focus,” Baker elaborated. “With that said, we now have the opportunity to ‘reboot’ several key sales regions, beginning with the Southeast, by leveraging our strong Pet Food Experts brand portfolio and renewed momentum!”

Pet Food Experts expands without losing its center by remembering that, 

“At the heart of everything we do is a commitment to doing what’s right for people—and, ultimately, for pets,” Baker said. “Our goal isn’t simply to be the largest distributor in the market; it’s to be the easiest to work with, the most reliable partner, the provider of the strongest brand assortment, and the standard for service excellence across the industry. Having grown up in this industry, I recognize and embrace the challenge of scaling our business, but never forgetting where we came from. We are committed to maintaining our company culture internally and externally, as it is something I am extremely proud of.”

As distributors change their own businesses and the face of the distribution sector, it’s key that they stay grounded in their company culture and commitment to improving the industry.