Nacho Pet Food is a popular brand of pet food sold in grocery stores and pet supply shops across the United States. With its colorful packaging and clever name, Nacho has become a recognized name in the pet food industry. But behind the Nacho brand lies a complex corporate structure involving multiple companies and frequent changes in ownership. Tracing the ownership history of Nacho Pet Food provides insight into the competitive pet food landscape and how consolidation has shaped the industry.
The Origins of Nacho Pet Food
Nacho Pet Food was founded in 1975 by a small California-based company called American Nutrition. The original Nacho products were dry dog and cat foods focused on high-quality ingredients and optimal nutrition. Throughout the late 1970s and 1980s, American Nutrition experienced steady growth driven by Nacho’s popularity across the West Coast. The brand was known for its fun Mexican fiesta theme and became a top seller in California pet specialty stores.
In 1989, American Nutrition was acquired by the Kal Kan Foods division of food processing giant Mars Inc. Mars was attracted to Nacho’s strong regional brand awareness and saw potential to distribute it nationally. Under Mars’ ownership throughout the 1990s, Nacho expanded across America through grocery store chains and mass retailers like Walmart and Target. Nacho became known as an affordable, mainstream pet food with quirky personality.
Acquisition by Big Heart Pet Brands
In 2006, Mars made a strategic decision to focus less on pet food and sold some of its pet food brands to newly formed Big Heart Pet Brands. The creation of Big Heart consolidated the pet food holdings of several private equity firms and investment groups, including Nacho Pet Food.
Over the next decade under Big Heart Pet Brands, Nacho continued to be a well-known name in grocery and mass retail. Nacho introduced new products and formulations, but remained committed to its Mexican fiesta branding and value positioning.
Acquisition by The J.M. Smucker Company
In 2015, Big Heart Pet Brands was acquired by The J.M. Smucker Company in a $5.8 billion deal. The acquisition made Smucker the largest pet food manufacturer in North America. Smucker was eager to strengthen its pet food division by adding Big Heart’s brands like Nacho, Meow Mix, Milk-Bone and Natural Balance.
Today, Nacho Pet Food is part of the Smucker’s extensive portfolio of pet brands. Nacho has seen product innovations and greater distribution support under Smucker’s ownership. The brand offers popular recipes like Nacho Crunch for dogs and Nacho Flaked for cats. With Smucker’s resources, Nacho is positioned to continue growing its presence on pet store shelves nationwide.
Financial Performance of Nacho Pet Food
As a private subsidiary of the publicly traded J.M. Smucker Company, the exact sales and profit figures for Nacho Pet Food are not reported. However, Smucker does share some financial information on its pet food division as a whole in its quarterly earnings reports. Analyzing these reports can provide high-level insight into Nacho’s financial performance.
Pet Food Sales Contribution
In fiscal year 2022 which ended April 30, 2022, Smucker reported total company net sales of $8.0 billion. Of that amount, $2.8 billion, or 35% of net sales, came from Smucker’s Pet Foods division. Nacho, along with brands like Meow Mix and Milk-Bone, contribute to the sales of the Pet Foods segment.
While not broken out individually, it demonstrates that Nacho is likely a strong contributor to Pet Foods representing over one-third of total company sales. Smucker noted in its 2022 fiscal year-end report that the Pet Foods division saw a 5% increase in sales compared to the prior year. Nacho’s popular products were likely a factor in driving the division’s growth.
Recent Financial Results
More recently in Q2 Fiscal 2023 which ended October 31, 2022, Smucker reported $2.2 billion in total net sales. The Pet Foods division represented $887.7 million of these sales, or around 40% of total.
Within Pet Foods, Smucker called out double digit growth for the mainstream and natural pet food portfolios which include Nacho recipes. This indicates Nacho is experiencing ongoing sales momentum as part of the Pet Foods financial success.
| Fiscal Year | Smucker Total Net Sales | Pet Foods % of Total Sales |
|---|---|---|
| FY 2022 | $8.0 billion | 35% |
| Q2 FY 2023 | $2.2 billion | 40% |
Recent Acquisitions Driving Pet Food Growth
A driver of Nacho’s strong performance is Smucker’s strategic acquisitions within the growing pet food space. In 2019, Smucker acquired pet food maker Ainsworth for $1.7 billion. In 2021, it purchased Rachael Ray Nutrish from sequentially for $1.2 billion. These acquisitions have added popular pet food brands to Smucker’s portfolio.
The pet food segment represents Smucker’s fastest growing division. As a core brand, Nacho is benefiting from the increased scale, broader product range, and strategic investment that Smucker is making in its pet food business.
Nacho Pet Food Manufacturing and Distribution
As part of understanding who owns Nacho Pet Food, it is also important to examine how Nacho products are manufactured and distributed to retailers. This provides insight into the supply chain and operations supporting the Nacho brand.
Manufacturing Facilities
Nacho pet foods are primarily manufactured at two main production facilities:
- Frontenac, Kansas plant: This is Smucker’s largest pet food manufacturing site at 775,000 total square feet. Opened in 2011, the $200 million facility produces hundreds of thousands of tons of pet food annually across 130,000 square feet of production space. Brands made here include Nacho, Natural Balance, and Nature’s Recipe.
- North Sioux City, South Dakota plant: Smucker invested $200 million over 2018-2020 to expand this site into a 300,000 square foot pet food manufacturing campus. Key brands produced include Nacho, Meow Mix, and Rachael Ray Nutrish.
Supplementing these main plants, some Nacho products are also made at Smucker’s pet food factories in Front Royal, Virginia and Massillon, Ohio.
Distribution Network
To distribute Nacho products from these manufacturing plants to retailers across North America, Smucker utilizes a network of strategically located distribution centers. Key distribution hubs for pet foods include facilities in the following areas:
- Orrville, Ohio
- Frontenac, Kansas
- Santa Fe Springs, California
- Fort Worth, Texas
- Robbinsville, New Jersey
- Harrisburg, Pennsylvania
Shifting distribution and warehousing to dedicated pet food facilities has improved efficiency and allowed Smucker to boost capacity. This distribution infrastructure supports getting Nacho products from factories to store shelves faster.
Retail Distribution
Through Smucker’s distribution capabilities, Nacho has penetration in major retail channels including:
- Grocery stores – Sold at chains like Kroger, Safeway, Publix, Whole Foods, and more
- Mass retailers – Carried at Walmart, Target, Costco, Sam’s Club
- Pet specialty stores – Petco, PetSmart, independent pet stores
- E-commerce – Amazon, online pet food sellers Chewy and PetFlow
- Veterinary clinics – Nacho prescription diets sold through veterinarian offices
Nacho’s diverse retail presence across channels demonstrates Smucker’s distribution strength and the brand’s broad consumer appeal.
Key Competitors
Within the U.S. pet food industry which represents over $30 billion in annual sales, Nacho competes with both large national brands and smaller specialty offerings. Key competitors include:
Purina
Owned by consumer goods leader Nestle, the Purina brand leads the overall U.S. pet food category with over $9 billion in annual U.S. sales across dog, cat and specialty pet products. Top Purina brands like Dog Chow, Cat Chow and Fancy Feast have strong consumer awareness. Purina has 47 U.S. manufacturing facilities and a powerful retail distribution network.
Mars Petcare
Mars Petcare brands including Pedigree, Iams, Whiskas, and Royal Canin drive over $5 billion in U.S. sales. Though Mars sold the Nacho brand in 2006, its pet food division remains a formidable competitor. Mars has expanded via acquisitions of Veterinary diet maker Royal Canin and animal hospital chain VCA.
Private label
Pet food offered under retailers’ own private labels has grown to represent 25% of pet food volume. Retailer brands like Kroger’s Pet Pride directly compete with Nacho on price and quality. Private label penetration puts margin pressure on branded players.
Premium and natural brands
As pet owners increasingly humanize pets, niche high-end and natural pet food brands have proliferated. Examples include Taste of the Wild, Merrick, Wellness, Blue Buffalo, and Nutro. While smaller, these brands compete for share in the premium pet food segment.
Conclusion
Nacho Pet Food has evolved from a small California brand to a national player through multiple ownership changes and ongoing consolidation in the pet food industry. Now a key piece of J.M. Smucker’s pet food portfolio, Nacho competes with other major brands and niche offerings in the over $30 billion U.S. pet food category. With pet food representing Smucker’s fastest growing division, investments in manufacturing and distribution position Nacho to continue gaining market share. Though facing stiff competition, Nacho’s longevity and brand equity with consumers ensures it will remain a popular presence on pet food aisles across America.