Whiskas maker Mars Petcare is pumping $113m into upgrading its Wodonga factory

Mars Petcare will invest $113m into an upgrade of its Wodonga factory to expand catfood production.

Mars Petcare, part of global confectionery giant Mars, will invest $112.6m to expand its catfood factory in regional Victoria.

The cash injection comes as the pace of cat ownership in Australia continues to grow at double that of dogs and consumers spend up on branded pet food.

The cat and dogfood business, whose brands include Whiskas, Advance, Optimum and Dine, has decided to push the button on a major expansion of its catfood factory in Wodonga in northern Victoria.

The expansion will allow it to produce 290 million pouches of cat food initially.

The investment, also financially supported by state agency Regional Development Victoria, will support the development of a 7800 sqm manufacturing facility dedicated to the production of single-serve pouches and create 60 new jobs – taking the total employment numbers at the Wodonga facility to nearly 500.

Single-serve wet catfood pouches have rocketed in popularity over the past few years. Pouch products now represent the largest share in the Australian wet catfood market – about 53 per cent as of May – and demonstrate significant growth of 19.9 per cent year on year.

And while consumers are reining in their spending at the supermarket to counter the rising cost of living by choosing private label and cheaper food and groceries to make savings in household budgets, they are still treating their cats and dogs with typically more expensive branded products like Whiskas or Dine.

“There are private-label brands within our category, there’s value and mainstream brands, premium and super premium brands, but interestingly we haven’t seen a trend with the pet category that sees a shift to lower value propositions,” Mars Petcare Australia general manager Craig Sargeant told The Australian, as he unveiled the $112.6m expansion project.

While other supermarket private-label categories are experiencing double-digit sales growth, households facing squeezed budgets from rising mortgages, rents and utility bills are drawing a line in the sand when it comes to offering their pampered pets anything less than the brands they have become accustomed to.

“We have seen that normal trends in the category are holding up really well. At a macro level, ‘pet parents’ are still purchasing their favourite brands which is probably about the resilience of the category,” Mr Sargeant said.

“Sometimes pets get treated better than the non-pet members of the family, and it’s interesting how people are very protective of the health and wellbeing of their pets.

“The trends of how people buy their (pet food) brands remains pretty constant.”

Cat ownership in Australia is growing at double the pace of dog ownership. Picture: Jay Town

The decision by Mars Petcare to commit to such a large investment at its Wodonga factory is supported by rapidly growing pet ownership rates in Australia, particularly through Covid-19 lockdowns, and the global confectionery, foods and cooking ingredients multinational has witnessed particularly robust growth in cat ownership.It’s a trend that other companies have also woken up to. In December 2022, supermarkets chain Woolworths paid $586m to grab a controlling stake in Petspiration. Woolworths boss Brad Banducci said the pets business had “impressive growth trajectory” thanks to rising pet ownership rates.

In March Bunnings launched a new and expanded pets range which represented the biggest single category expansion by the hardware retailer in two decades.

The fast-growing pet care and products sector is worth as much as $10bn.

Victorian Regional Development Minister Harriet Shing said as pet ownership increased there were enormous opportunities for businesses like Mars to expand.

“We’re continuing to work with rural and regional producers to support investment in growth industries, to cement Mars Petcare’s long-term operations and workforce in Wodonga and its place in a strong market,” she said.

Mr Sargeant said there are 4.2 million cats in Australia, and the domesticated population was growing at 3.7 per cent per year. The number of pet dogs was 5.8 million, growing at 1.4 per cent per year.

“So the cat category is quite an important one within pet food. Basically the cat population is growing at twice the rate of the dog population and the way in which investments like this work is globally the company (Mars) would be looking to where it can place its next manufacturing capability or capacity,” he said.

“And normally somewhere like Australia and New Zealand would not be a priority just based on the economics of what it’s like to invest in emerging markets.

“But because of the growth of the category in Australia – that’s wet cat pouch packets that we are going to make out of this facility which the category is growing at about 20 per cent in Australia – and also pouch is about 53 per cent of the total category.

“And because we’ve done a phenomenal job over the last five years as a business to demonstrate how we benchmark very well when it comes to our capability and cost structure, we are going to get this investment … so it’s a fantastic boost.”