Pet Food Q3 Earnings: Revenue Up, Profit Down

# Pet Food Q3 Earnings: Revenue Up, Profit Down

On November 2, 2026, Tianfeng Agriculture released its Q3 weekly report: pet food revenue continues to grow, but margins are broadly pressured by exchange rates, raw materials, and marketing spend.

Overview

• Revenue: Pet food companies growing steadily
• Profit: Generally down; some companies' net profit nearly halved
• Reasons: FX, raw materials, marketing spend

Why revenue grows but profit falls?

1. Raw material costs up

• Chicken, fish meal, packaging costs rising
• Brand-side price transmission is slow
• Gross margin compressed

2. High marketing spend

• Double 11, 618 ad costs
• Influencer commissions, platform fees
• New product launch costs

3. FX volatility

• Export-oriented companies affected
• RMB appreciation lowers profits
• Overseas customers push back on prices

4. Capacity utilization

• New plants online
• Underutilized capacity
• Higher unit cost

Impact on brands

1. Cost reduction — find cheaper co-packers, consolidate SKUs

2. Efficiency — small batch sampling, reduce inventory

3. Premiumization — prescription and functional food have better margins

How co-packers should respond

1. Cost transparency — ingredient and processing fee details

2. Flexible capacity — small MOQ, fast SKU changeover

3. Formula optimization — reduce cost without quality loss

Co-packer opportunities

| Brand need | Co-packer opportunity |

|-----------|----------------------|

| Cost down | Formula optimization, bulk procurement |

| Small batch | Flexible MOQ |

| Premium | Freeze-dried, prescription lines |

| Export | International certifications |

Judgment

• Margin pressure is cyclical
• Leaders are building brand moats
• Tail brands will be eliminated
• Co-packers should grow with leading brands

If you're looking for a co-packer that supports cost reduction, small batch, and premiumization, Mixiaoqi pet food OEM/ODM is upgrading formula optimization and flexible capacity.

FAQ

Will margins stay pressured?

It's cyclical — recovery after consolidation.

Will brands find cheaper co-packers?

Yes, but quality can't drop.

How can co-packers help brands cut costs?

Formula optimization, bulk procurement, waste reduction.