In last week’s Viewpoint, I reviewed the UK’s Competition and Markets Authority (CMA) reforms for the veterinary sector and ended with a comment about trust — it’s not a vague sentiment made on my part. The CMA found that fewer than 50% of clients at large veterinary groups (CVS, IVC, Linnaeus, Medivet, VetPartners) knew their practice was part of a chain, and those veterinary groups averaged prices 18.3% above independents while scoring worse on client satisfaction with cost. That looks like erosion of the very thing that used to substitute for regulation in professional-service markets: personal/localized reputation.

Historically, “trust the vet” worked as an informal market mechanism because the vet was a known individual in your town whose livelihood depended on local reputation over a career. Word travels fast in a small market, and the vet bore the reputational cost personally — a strong incentive against overcharging or overtreating. When ownership shifts to a private-equity-backed chain, that mechanism breaks down: prices aren’t always set locally, the trusted local clinic brand now sits inside a different ownership and incentive structure, and personal reputation is diffused across a corporation.

This isn’t “markets work-versus-markets fail”, and it isn’t that “corporate vets are untrustworthy” — trust in individual vet professionalism remains high across the board according to the report. It’s that the mechanism that made this market self-regulating for decades was itself a market feature- localized reputation. Consolidation dismantled it faster than any replacement emerged. The CMA is betting mandated disclosure can rebuild enough information for price competition to work again. Whether that bet pays off is an open question.

Bob Jones

Like a lot of our readers, I consider myself a free-market guy. Let the market decide, keep the government out of markets, and that free and open competition for consumers is good. So, when I read recent articles written about the United Kingdom’s Competition and Markets Authority (CMA) reforms or rules for the veterinary sector, my free-market radar went off.

The CMA’s investigation started almost three years ago and brought 56,000 responses, 45,000 from the public, 11,000 from those working in the veterinary industry. That’s massive. You can find the full report here.

What set the radar off for me was the price cap on prescriptions fees, which drove me to learn about the other ten reforms the CMA has imposed on the veterinary industry. I was sure that these reforms were all going to be bad, but after thinking about the reforms, I am not so sure. It seemed to me that most of the reforms were focused almost entirely on disclosure: price lists, written estimates, ownership transparency, comparison tools. A hardline free marketeer would tend to support most of those.

The report looked at the differences in pricing, satisfaction, and other things between large veterinary groups (LVGs, or corporate groups) and independent veterinarians, some of the differences are eye-opening. One of my observations here was about trust and how this has been impacted by the formation of LVGs, which I will address in the Viewpoint next week.

Bob Jones

When Paul Revere rode his horse to warn of the British arrival to spark the American Revolutionary War, the horse was a vital part of every aspect of the colonies.  As the new country forged its way, that dependency continued for another 175+ years until cars, roads (1910-1930’s) and mechanical farming (1940 – 1950’s) transitioned them to their current role in society.  In the 1920’s an estimated 25% or 5 to 6 million households owned horses. Today they represent approximately 2 million households; they dwarf the 71 million households that have dogs (according to the 2025 APPA National Pet Owner survey).

Horses once played a critical role in people’s lives, but innovation changed that- however that doesn’t necessarily mean that as a profession and an industry we should focus our time, efforts and most importantly financial investments on species that have the largest numbers or households. Investing in areas that meet a specific need/ niche offers larger opportunities than can be anticipated.  We are seeing some of those now (i.e. Dalan’s Bee Vaccine) and I hope we see more in the future.

Dr. Christine Merle

If you haven’t had a chance to provide feedback on the new look of the newsletter, we would love to hear from you. 

Supporting Early-Stage Animal Health Innovation

The launch of Elanco Ventures, along with recent investments by Veterinary Angel Network for Entrepreneurs (VANE), are a welcome boost for early-stage innovators in animal health. This stage is often one of the toughest points in a company’s journey, especially as the company moves beyond friends-and-family funding and begins to look for more substantial capital.

Investors like Digitalis and NovaQuest have helped lay an important foundation, but the industry still needs more capital focused on these earlier stages of development. Investment support at this stage can make a real difference in keeping new ideas moving forward through funding proof-of-principle and proof-of-concept work leading to new tools, solutions and products.

A stronger funding ecosystem from early to late stages, gives the animal health industry a better chance to keep growing and innovating over the long term.

Chuck Johnson- Senior Consultant

Brazil’s Growing Role in One Health Innovation

As the global animal health industry continues to seek innovative solutions to increasingly complex challenges, Brazil is emerging as a strategic center for biotechnology development and One Health advancement. The country’s unique combination of biodiversity, scientific expertise, agricultural leadership, and industrial scale creates an environment well-positioned to support innovation that benefits animals, human, and environmental health alike.

On June 22, industry leaders, investors, entrepreneurs, government representatives, and research institutions will gather in San Diego during BIO International 2026 for the Invest in Brazil | One Health Summit: From Science to Scalable Solutions. Organized by Abiquifi and ApexBrasil, with support from Brakke Consulting, the event will highlight opportunities for investment, collaboration, and international expansion within Brazil’s rapidly growing biotechnology ecosystem.

Brakke Consulting is proud to serve as a sponsor and participant in this important event. Through its work with global animal health companies, investors, and innovators, Brakke continues to support initiatives that foster growth, strategic partnerships, and the advancement of One Health solutions worldwide.

Brazil’s strengths extend beyond its role as a major producer of animal protein. The country offers a diverse research environment, expanding biotech capabilities, and a growing network of organizations focused on translating scientific discoveries into scalable commercial solutions. These assets are increasingly attracting attention from global stakeholders seeking new partnerships and innovation platforms.

Those interested in attending can learn more and register at: https://www.eventbrite.com.br/e/lnvest-in-brazil-i-one-health-summit-from-science-to-scalable-solutions-tickets-1989823578889?aff=o

As innovation becomes increasingly global, events such as this provide valuable opportunities to connect science, investment, and industry expertise while highlighting Brazil’s expanding role in shaping the future of One Health.

Mauri Ronan Moreira- Senior Consultant, Brazil

Click here to listen to Jeff Santosuosso’s Video Viewpoint regarding “Trends Influencing Millennials/GenZ and their Pets”.

A couple of my recent assignments have brought me into the big wide world of animal health, meaning emerging markets in Asia Pacific, Middle East, Africa, and Latin America. There you will find a different landscape for our industry, with different needs and drivers than what we sometimes overly focus on- that being the mature USA and European markets. (Note: Recently I saw that there is state bill being presented in Oregon that essentially outlaws hunting, fishing, and animal farming. Imagine presenting that to someone on the streets of Calcutta?)  

In emerging markets, you see a significant growth in pet care and spending. Innovation is still highly valued and generally does well when brought to these markets. But affordability is a big issue and finding ways to make products more available to larger populations will be one of the big opportunities for our industry.   

As for food animals, it is a big driver of growth- in these markets you have billions of mouths to feed that continue to be growing at a rate exceeding the mature market populations. Food availability, affordability, and security will forever be the dominate theme in this area. While we go into a Whole Foods, or Marks and Spencer and see ‘organic’, ‘free range’, ‘no hormones’ or ‘no antibiotics’ highlighted on the label- go into a store in Brazil or Indonesia and it’s a different choice operating: what’s available and what can I afford it? 

 The duality of these differing markets (mature vs. emerging) creates difficult choices for animal health companies on how to direct their strategic vision and choices. In my view, the ones that do it right will be the winners and the most sustainable. 

Paul Casady 

The recent announcement of Tractor Supply Company’s acquisition of VIP Petcare sets up a formidable challenger to Chewy’s veterinary ecosystem that they are building with their recent acquisitions of Modern Animal and Smart Equine with a few notable differences –Customer Positioning and the value of Brick and Mortar. 

Chewy positions themselves with premium care and service targeting consumers (especially Millennials and Gen Z) who treat their pets like children and are willing to spend more on them.  Tractor Supply, with 85 years in business, has positioned themselves as rural lifestyle retailer focused on low prices.  Two ends of the spectrum of pet care but data shows repeatedly that the income range of all pet owners tends to skew to the lower end of the range not the higher.  

Are the days of Brick and Mortar seeing a comeback?  Tractor Supply plans to grow to 3,200 stores by 2030- opening in rural and exurban communities. In addition, they continue to expand their smaller pet specialty stores, Petsense, in more urban/suburban areas. While Chewy will have some physical space with their veterinary clinics- they aren’t focused on providing retail services ( at least not yet). In addition, they are already being targeted by pet retail competitor Petsmart- calling out the advantages of in-store pickup- a benefit that Tractor Supply also offers. 

Not sure exactly how this will play out but one thing is for sure, it will make for some interesting times ahead. 

Dr. Christine Merle, Newsletter Editor

Like other industries, animal health thrives on innovation, and this edition of the newsletter includes several examples. A new treatment for canine allergic and atopic dermatitis. A new authorization for an established anti-parasitic. A new product for the evaluation of adrenal function in dogs. The addition of a new biomarker added to diagnostic tests.

When we do benchmark studies, one of the key metrics we look at is age of product lines. What percentage of sales are derived from products launched in the last 3-5 years? How do you compare to your peer competitors? It’s an important measure of whether you are keeping pace in your industry.

It won’t be long before management teams start meeting to initiate strategic planning and budgeting for 2027. We encourage you to include age of product lines as one of your core evaluations. Please let us know if we can help.

John Volk, Senior Consultant

We recently published the animal health industry’s first Sentiment Index and the respondents’ sentiment for 2026 was “cautiously optimistic.” But after watching the stock market’s response to Zoetis’s 1Q performance and their updated full year outlook, perhaps the sentiment could turn pessimistic. So, I thought I would try to find some optimism for you this week.

Here are the 1Q 2026 growth rates (corrected for exchange) for the animal health businesses in the companies that have reported so far:

Of these 13 companies, 9 of them are at or above the 5-6% long term average animal health industry growth rates. So, when I saw a recent article from McKinsey, The case for optimism in uncertain times, I had to read it.

The author makes a great point when he states, “Many influential figures have argued, correctly, I think, that long-term optimism is not just descriptive, it’s generative: it helps to shape a better future by motivating the search for solutions.” In the article, the author references a book, A Century of Plenty written by several McKinsey authors. “[The authors] …argue that sustained growth is good, that there is enough for all, that it’s up to us to build the future, and that how we think and talk about the future really matters.”

Progress is uneven, unpredictable and driven by innovation. And innovation was the primary reason for optimism in our Sentiment Index.  The article concludes “Again and again, optimists have been on the right side of history. Optimism keeps us moving forward.” Even after some have had slow quarter.

Bob Jones