H&H Group acquires premium pet nutrition brand Solid Gold
Health & Happiness Group International Holdings Ltd has announced the acquisition of Solid Gold Pet (Solid Gold) at Enterprise Value of US$163 million, signaling its strategic expansion in to pet health and wellness.
The investment by the Group is a full (100%) acquisition of the privately-owned Solid Gold brand which currently reports September 2020 LTM net sales of c.US$55 million from the US and international markets including China, implying c.39% year-on-year growth.
H&H Group CEO, Ms Laetitia Garnier, said that the acquisition is a strategic opportunity for the Group, having planned to build Pet Nutrition & Care (PNC) as a third pillar alongside its existing business segments - Adult Nutrition & Care (ANC) and Baby Nutrition & Care (BNC).
“This diversification represents a third pillar of growth for H&H Group and we are delighted to be taking this step with Solid Gold, America’s first holistic pet food company. For over 45 years Solid Gold has established a strong brand and premium range of high-quality nutrition solutions for cats and dogs, with a pioneering spirit of innovation at its core. The combination of Solid Gold’s attributes and brand reputation in the US premium pet food market, along with the growing demand for pet nutrition globally - driven by the rapidly increasing pet population and the trend in humanization of pets, makes this a very compelling opportunity for the Group.
“Entering into Pet nutrition and care is a natural move for H&H where we recognise the importance and the role that pets play in the lives of modern families around the world. The same consumers who care about their own health and wellness also care about that of their families and friends. As pets are very much a part of that family and treated more and more like humans, pet owners attach a growing importance to the wellbeing of their pets including their nutrition choices,” Ms Garnier said.
“In line with our mission to make people healthier and happier we have been observing the humanisation of pets and following the market closely. The pet food market has demonstrated resilience to macro conditions and the pandemic has driven an increase in pet ownership which we expect to continue as the way we all work continues to evolve. This year’s pandemic has also accelerated trends within the pet nutrition space such as premiumisation and online purchasing – two areas we have focused on across all our brands. We believe Solid Gold is particularly well aligned with those trends and we feel very confident of the brand’s ability to deliver a strong contribution to the growth of H&H in the future.”
This acquisition opens the door to an attractive and fast-growing category with a global sales value of around c.$95 billion growing at 5% (2015-19 CAGR). The US market alone accounts today for c.45% of the total global premium pet food market and its premium segment is still growing at an average of 8% in the last 5 years.
“We are delighted to be working with H&H Group to further realise Solid Gold’s vision of positively impacting the lives of pets around the globe. This acquisition creates a greater opportunity for us at Solid Gold to bring transformative nutrition to pets worldwide. Our values and passion for pet holistic health are perfectly aligned with H&H Group’s mission of health and happiness for all,” said Julie Barron, Chief Executive Officer, Solid Gold.
Headquartered in St Louis, Missouri, Solid Gold Pet was founded in 1974 as the first holistic nutrition for dogs and cats. Animal-loving Sissy Harrington McGill (founder) had the simple belief that every pet deserves the longest, happiest life possible and that quality nutrition is the foundation to achieving this. Over the last 45 years, Solid Gold has continued to disrupt the holistic pet food category with dry foods, wet foods, toppers and supplements across six dietary ranges: ‘Everyday Nutrition’; ‘Weight Control’; ‘High Protein’; ‘Sensitive Stomach’; ‘Complete Health’; and ‘Indoor Cat’.
The common science around gut health creates a bridge between the two businesses. Solid Gold has a specialised three-piece formulation (cleanse, balance, fuel) in its diets that is anchored in creating a healthy gut. This core proposition forms a strong link between the two brands where H&H's original brand Biostime was built on gut health and has grown to become the largest infant probiotics brand in the world.* Probiotics are also the foundation of many of it products (vitamins and supplements) under the ANC division.
“We share a belief of nourishing the body from the inside out. The same principles apply to the health and wellbeing to the human members of our families and to their pets,” Ms Garnier added.
In China, the pet nutrition market is experiencing very strong growth with market size of $5.1 billion USD (2019) with 29.4% growth (2015-20 CAGR). The pet population of cats and dogs in China is 92 million and 96.5 million respectively (of which 55M dogs and 44M cats are living in city/urban areas).
Solid Gold has risen to become the #4 imported cat nutrition brand online in the China market. The brand currently has two diets (formulated recipes) already approved by China Ministry of Agriculture and several others in the pipeline to be approved in near term.
* Source: Euromonitor International’s research findings as generated via desk research and trade interviews, measured in terms of global retail sales value in 2019