If you’ve been watching the headlines coming out of São Paulo lately, you might think the Brazilian pet sector is invincible. It’s the third-largest market on the planet, after all. But honestly, the latest Brazil pet industry news tells a much more complicated story than the "non-stop growth" narrative we've heard for a decade.
The honeymoon phase of the post-pandemic surge is officially over.
We’re now in 2026, and the industry is waking up to a massive hangover. Production volumes for pet food actually dipped—yes, fell—by about 3.7% last year. That’s a huge deal because it’s the first time in recent memory that the "essential" nature of pet kibble didn't protect it from the grinding reality of inflation and a shaky Real.
The União Pet Giant and the End of the Ticker PETZ3
The biggest bombshell of the year is the finalization of the Petz and Cobasi merger. It’s done. It’s finished.
As of early January 2026, the ticker PETZ3 is officially a relic of the past on the B3 stock exchange. It has been replaced by AUAU3. No, that’s not a typo. "Au au" is the Portuguese onomatopoeia for a dog’s bark—sort of the Brazilian version of "woof woof."
It’s a cheeky move for a company that now controls nearly 500 stores across 24 states. But don't let the cute ticker fool you; this was a messy marriage. The antitrust regulator, CADE, didn't just wave them through. They forced the new entity, now operating under the name União Pet, to dump 26 stores in the State of São Paulo to keep things competitive.
Kinda ironic, isn’t it? The two biggest players had to shrink just to be allowed to grow together.
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Who actually runs the show now?
- Paulo Urbano Nassar: The former Cobasi boss is now the CEO of the whole thing.
- Sérgio Zimerman: The founder of Petz has moved to Chairman of the Board.
- Integration hurdles: They’re moving everyone into Cobasi’s headquarters in western São Paulo. Expect some culture clashes between the "high-growth" Petz crowd and the "profit-focused" Cobasi veterans.
The goal is to hit R$7 billion in annual revenue, but they've promised CADE they won't open new stores near the ones they just sold for at least two years.
Why the "Slowdown" is the Talk of the Town
Wait, didn't everyone say Brazil’s pet market was recession-proof?
Well, it’s proof until it isn’t. Abinpet and the Instituto Pet Brasil (IPB) revised their numbers for 2025, and the growth was a measly 3.5%. Compare that to the 15% or 20% jumps we saw a few years back, and it feels like a cold shower.
The culprit? Basically, everything is getting more expensive.
Most people don't realize that the "meat" in Brazilian pet food is often priced like a global commodity. When the US Dollar stays high, the cost of animal and vegetable meals—the core of every bag of kibble—skyrockets. Manufacturers have been eating these costs for a while, but they finally hit a breaking point.
The Cat Boom and the Premium Pivot
Despite the gloomy production numbers, there’s one area where the Brazil pet industry news is actually pretty exciting: cats.
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For the longest time, Brazil was a "dog country." But cat ownership is growing at a rate of 9.9% annually. Companies like BRF Pet are leaning hard into this. They recently sponsored the Cat Congress in Brazil (the biggest in the country) to push their Biofresh and GranPlus brands.
Why? Because cat owners are, frankly, obsessed with hydration and high-margin wet food.
Mars Petcare caught on to this early. In June 2025, they opened a massive $90 million wet-food plant in Paraná. They aren't just making "food"; they are making "health solutions." We are seeing a shift where 45% of Brazilian pets still don't eat commercial pet food—they eat table scraps.
That "gap" is where the future money is. If a company can convince a family in the interior of Minas Gerais to switch from rice and scraps to a mid-priced dry food, that’s a win.
Pet Tech and the "Humanization" of 2026
If you walk into a high-end vet clinic in Jardins, São Paulo, today, it looks more like a human hospital.
The latest data from Mintel and TechSci Research shows that "Pet Tech" isn't just about automatic feeders anymore. It’s about biologics. We’re talking about monoclonal antibodies and immunotherapies for dogs with chronic skin issues or cancer.
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Surprising Trends in the Service Sector:
- Animal Health Plans: They are getting more expensive, with price hikes of 15% to 30% recently because of new tax regulations.
- Solar-Powered Kibble: PremieRpet invested in the largest solar plant in São Paulo just to keep production costs down and hit ESG goals.
- The "Senior" Focus: Brazilians are obsessed with longevity. They are buying specialized supplements with collagen and probiotics like never before.
Honestly, the "humanization" trend has gone a bit wild. You can now find skincare actives—the same ones humans use—in high-end pet grooming products. It’s a bit much, but people are buying it.
The Export Lifeline
While the domestic market is struggling with a "consumer spending hangover," Brazilian factories are looking abroad.
Brazil exported over $580 million in pet products in late 2024, a 29% jump. They are sending food to the Caribbean, Europe, and neighboring South American countries. Since the local market is a bit sluggish, the big players like BRF, Nestlé Purina, and Mars are using Brazil as a massive manufacturing hub for the rest of the world.
It’s a smart move. If the Real is weak, your exports are cheap for foreigners. That’s the "silver lining" the industry associations keep talking about.
What This Actually Means for You
If you’re an investor, a business owner, or just a pet lover looking at the Brazil pet industry news, the takeaway isn't that the market is dying. It’s that it’s maturing.
The days of "easy money" and double-digit growth are gone. The "União Pet" merger means the big guys are circling the wagons. Small and medium pet shops still control about 48% of the market, but they are being squeezed by e-commerce, which is growing at 10% a year.
What most people get wrong is thinking the market is saturated. It's not. It's just changing. People are moving away from "cheap bulk" toward "functional quality."
Actionable Insights for 2026:
- Focus on Felines: If you aren't catering to the specific, high-margin needs of cat owners, you're missing the only high-growth segment left in the "pet food" category.
- Audit Your Logistics: With e-commerce and fast-delivery apps (like the ones partnering with Uber Eats and DoorDash in Brazil) taking over, your brick-and-mortar store needs a digital "soul."
- Watch the Tax Reform: The Brazilian government is still debating how pet food is taxed. Currently, nearly 50% of the retail price is just tax. Any shift here could cause a massive explosion in sales for the "middle class" brands.
- Invest in Services: As physical product margins get thinner, services like specialized grooming, geriatric vet care, and "behavioral" training are where the profit is hiding.
The Brazil pet market is at a crossroads. It’s no longer just about selling more bags of food; it’s about selling better lives for 160 million animals. Whether you're watching the AUAU3 stock or just buying treats for your Golden Retriever, keep an eye on the costs. The industry is robust, but it’s definitely feeling the squeeze.