Pet Feed Production Ranks First Nationwide, Shandong "Dominates" China's Pet Economy Market

How is AI · Zhong宠股份’s globalization strategy shaping industry competitive barriers?

China Economic Journalists Yan Shilong Beijing Report

As the “It Economy” becomes a new trend in consumption upgrading, Shandong Province, the top strong province in northern China, is accelerating in the pet economy sector with its solid industrial foundation and precise development layout.

According to the Shandong Provincial Bureau of Animal Husbandry and Veterinary Medicine (hereinafter referred to as “Provincial Animal Husbandry Bureau”), by the end of 2025, there will be 255 licensed pet feed production companies in Shandong, with a pet food output of 781,600 tons, a year-on-year increase of 38.1%, accounting for 41.5% of the national total, ranking first nationwide.

Since 2018, Shandong has maintained the number of feed and feed additive producers, product output, and industrial output value at the top nationwide for consecutive years. The annual pet feed production accounts for about 30% of the national total. Among the seven pet food companies listed on the A-share market, three are based in Shandong. The number and output value of veterinary drug companies have ranked first nationwide for 24 consecutive years. With abundant raw materials such as chicken, duck, animal bone powder, vegetables, and various starch crops, and a strong industrial production base, a complete industry chain dominated by pet food and pet supplies has been formed. Various regions are actively deploying, and the pet economy is booming.

Leading the Entire Chain: Industry Scale and Resource Endowment Empower Each Other

On the Jiaodong Peninsula, a company in Yantai—Zhong宠 Food Co., Ltd. (hereinafter “Zhong宠”, 002891.SZ)—has grown from small to large and from large to strong, exemplifying the development of pet-related enterprises in Shandong.

Since its establishment in 1998, Zhong宠 has focused on its core business and refined its operations. Data shows that in the first three quarters of 2025, Zhong宠 achieved revenue of 3.86 billion yuan, a year-on-year increase of 21.05%; net profit attributable to the parent was 333 million yuan, up 18.21%, with basic earnings per share of 1.11 yuan.

Global capacity layout is the core support for Zhong宠 to build industry competitive barriers. It has established and operated over 23 modern production bases in China, the US, Canada, Singapore, Cambodia, and Mexico, including 9 overseas factories. Projects such as the US Phase II, Canada Phase II, and Cambodia Phase II are accelerating construction, with the Mexico plant officially completed and operational, and the Canadian Phase II expected to start production in the second half of 2025. The US Phase II factory plans to start production in 2026.

As China’s first pet industry company to establish factories in developed countries and to complete overseas brand and capacity mergers, Zhong宠’s products are exported to over 90 countries and regions worldwide. Its export scale has ranked first nationwide for many years. In the first half of 2025, total revenue reached 2.432 billion yuan, with overseas business income of 1.575 billion yuan, accounting for 64.75% of total revenue, a year-on-year increase of 17.61%. The high growth of overseas factories continues to drive revenue and profit margin improvements.

Sources from Yantai indicate that R&D innovation is the core driver for Zhong宠’s industry leadership. It has accumulated 252 national patents, forming a closed-loop guarantee from pet basic nutrition research, raw material procurement, to R&D, production, and delivery. Through a dual-driven approach of “R&D + manufacturing,” the company enhances product added value and market competitiveness.

An official from the Shandong Provincial Animal Husbandry Bureau states that the rapid development of Shandong’s pet economy is mainly due to fast industry transformation and upgrading, high industry chain integration, and strong leading enterprises. In terms of transformation, Shandong’s pet food industry is closely following consumption upgrade trends, accelerating from traditional OEM to branding, intelligent, and high-end development. Products are extending from basic staple foods and snacks to functional, refined, and customized items. Relying on automated production lines and digital management, production efficiency and product quality are simultaneously improved, quickly meeting domestic and international market demands.

In industry chain integration, Shandong has built a full-loop system covering raw material supply, R&D, production, processing, packaging, warehousing, logistics, and sales. Upstream and downstream collaboration effectively reduces overall costs, forming advantages in scale and intensification, with industry support capabilities leading the country. Leading companies such as Guai Bao, Zhong宠, Lusi, and Shuaike have driven many small and medium-sized enterprises to cluster development, creating a leading, tiered, and overall rising industry ecosystem.

Additionally, local universities and research institutes are rich in resources, with ample talent reserves in animal nutrition, food engineering, and biotechnology, providing solid intellectual support for industry innovation. The logistics advantage makes Shandong a major national transportation hub, ensuring smooth foreign trade channels, nationwide distribution networks, low transportation costs, and quick delivery, effectively reducing operational costs and helping Shandong pet food products to be exported globally.

It is worth noting that as a major agricultural and animal husbandry province, Shandong provides unparalleled resource support for the pet economy. Data shows that during the “14th Five-Year Plan,” Shandong’s total grain output has remained above 110 billion jin for five consecutive years. The annual output of vegetables, meat, eggs, and dairy ranks first nationwide, while fruit and aquatic products are second. By 2025, the province’s total output value of agriculture, forestry, animal husbandry, and fishery will exceed 1.3 trillion yuan, maintaining the top position nationally.

Regional Development: Distinctive Features Build a Differentiated Growth Pattern

The development of Shandong’s pet economy is not a single-point breakthrough but a regional pattern of “leading enterprises guiding, cities complementing, and distinctive features shaping.”

According to the Jinan Municipal Bureau of Agriculture and Rural Affairs, Jinan’s pet economy continues to expand, becoming an important emerging service industry and economic growth point, as well as a focus of people’s livelihood concerns. Over the past five years, the compound annual growth rate has reached 12.3%, higher than the national average of 9.8%, gradually becoming a new characteristic industry and economic growth pole in Jinan. In 2023, Jinan’s pet market size reached 4.26 billion yuan, with the main industry chain covering “breeding—food and supplies production—distribution and retail—medical and beauty services—funeral services.”

Currently, the city has over 20 pet-related manufacturing enterprises, including 11 companies primarily engaged in the pet industry, and 5 above-scale manufacturing enterprises. Over 75% of these are involved in food and medicine manufacturing, with pet supplies mainly in cleaning products. There are 133 feed production companies, including 7 pet feed (including pet snacks) producers. By 2024, total feed output was 1.1095 million tons, with a value of 4.672 billion yuan. The city has 43 GMP-certified veterinary drug producers, with a total output value of 3.325 billion yuan and sales of 3.246 billion yuan.

Weifang’s relevant departments state that with abundant local resources, developed agriculture and animal husbandry, prominent transportation advantages, and mature modern logistics, combined with an aging population (over 21% aged 60 and above in 2023), the pet industry and market are experiencing explosive growth. It is estimated that by the end of 2024, the pet (dogs and cats) population in the city will exceed 1 million, with a penetration rate close to 25%, and annual consumption reaching 3 billion yuan. The pet industry’s annual output value approaches 5 billion yuan, accounting for over 1% of the national total, with the foundation and conditions to develop a modern pet lifecycle industry chain, creating a pet economy hub radiating across the Shandong Peninsula and the Beijing-Tianjin-Hebei region.

In terms of raw materials, Weifang, as a strong agricultural city, produces over 9 billion jin of grain annually, with meat output maintaining over 1.2 million tons, ensuring sufficient supply of meat, eggs, and dairy products. The food processing industry is robust, covering deep processing of livestock and poultry, fruit and vegetable processing, dairy products, and more. Leading enterprises such as Zhongji Group, Legang Food, Delisi, and Huifa Food have been cultivated and attracted, providing high-quality raw materials for pet food processing.

Regarding enterprises, Qichacha data shows that there are 30,392 market entities involved in “pets” in Weifang, accounting for about 9.3% of the province. Among them, 606 are manufacturing companies (about 10.7%), and 23,368 are wholesale and retail businesses (about 9.1%). As of now, Weifang has 49 well-operating pet food and supplies processing enterprises, producing about 140,000 tons of various pet foods annually, with 2024 main business revenue of 2.85 billion yuan and profit of 112 million yuan. Among these, 28 pet food processing companies have obtained pet feed licensing, producing 23,400 tons of feed in 2024, a year-on-year increase of 12.5%. In 2024, Shandong’s pet feed output reached 566,000 tons, up 26.1%, accounting for 35.4% of the national total, with a value of 8.46 billion yuan, up 29.7%. This includes 15,600 tons of dog feed and 7,100 tons of cat feed, with a total value of 1.036 billion yuan, an increase of 5.1%.

In Heze Cao County, known as the “Cosmic Center,” it has also become an important growth engine. Local officials state that in recent years, Cao County has been exploring new industry development paths, deepening the “special industry+” integrated development model, leveraging forestry processing and agricultural by-product resources, extending and lengthening the industry chain, with significant results in “pet economy.”

Currently, Cao County’s “pet economy” mainly covers home furnishings, food, clothing, and services. There are 459 market entities related to “pet economy,” including 158 industrial enterprises. In 2024, the total output value of the “pet economy” reached 2.65 billion yuan, a year-on-year increase of 31%. From January to December 2025, the total output value is projected to reach 3.25 billion yuan, up 14%.

In the home furnishings sector, Cao County relies on its woodcraft industry, seizing the opportunity of the booming global pet economy, guiding enterprises to gradually shift toward pet supplies. Currently, a complete industry chain has been formed, including pet habitats (cat trees, wooden shelters), health care (scratching posts, feeding racks), and emotional companionship (interactive toys, pet photo frames), with products exported to over 30 countries and regions in Europe, America, and Southeast Asia.

In the pet food sector, in 2024, the output value was 860 million yuan, accounting for 32.5% of the total pet industry output, with four companies producing over 50 million yuan each. In pet clothing, Ancailou Town has three related enterprises, with only Haizhou Clothing being an e-commerce company. In 2024, they produced 10,000 pet and doll clothes, with sales reaching 10,000 pieces from January to March 2025, a 400% increase. This is mainly due to solid industry foundations, government guidance, and mature craftsmanship. Under government guidance, Cao County leverages its “China Wood Art Capital” base, expanding existing wood product companies into pet home furnishings, developing products like solid wood cat trees and smart pet houses. Relying on mature “two-service” industry resources, they are gradually developing pet clothing products, increasing e-commerce live streaming efforts, and creating new economic highlights.