Freshpet, Inc. (NASDAQ: FRPT)

Freshpet, Inc. is a company that is disrupting the over $56.0 billion United States pet food industry by driving consumers to reassess conventional dog and cat food offerings. The company positions its brand to benefit from mainstream trends of growing pet humanization and consumer focus on health and wellness. Freshpet prices its products to be accessible to the average consumer, providing broad demographic appeal and allowing penetration into multiple classes of retail, including grocery, mass, international, digital, pet specialty, and club. The company has successfully expanded its network of Freshpet Fridges within leading blue-chip retail chains. As of December 31, 2025, Freshpet's household penetration within the United States was approximately 15.2 million households, with opportunities to expand into international markets, as demonstrated by initiatives in the U.K. market.

Freshpet generates revenue through the manufacturing, marketing, and distribution of fresh dog food, cat food, and dog treats. The company's primary products include fresh, refrigerated slice and serve rolls, bags, and treats, all made according to a nutritional philosophy of fresh, nutritional ingredients and minimal processing. Freshpet's proprietary recipes include real, fresh meat and poultry products and varying combinations of vitamin-rich vegetables, leafy greens, and antioxidant-rich fruits, without the use of preservatives or additives. The company's products are sold under the Freshpet brand name, with ingredients, packaging, and labeling customized by different classes of trade. Freshpet also offers fresh treats across all classes of retail under the Dognation and Dog Joy labels. The company's general customer base includes pet owners who view their pets as family members and are willing to spare no expense for their loved ones, driving premiumization across pet categories.

• Manufacturing: Freshpet owns and operates what it believes to be the first fresh, refrigerated pet food manufacturing network in North America. The company's original Freshpet Kitchens Bethlehem, located in Bethlehem, Pennsylvania, is a 240,000 square foot facility built to United States Department of Agriculture standards and houses six production lines customized to produce fresh, refrigerated food. Freshpet Kitchens South, located in Texas, currently has four production lines in operation with a potential fifth line to be installed in the future. The construction of Freshpet Kitchens Ennis, located in Ennis, Texas, began in 2020, with the first production line commissioned in Q4 of 2022 and two more lines successfully commissioned in 2023, completing 1 of 3 construction phases for the site. Due to the continued growth of fresh pet food sales, Freshpet plans to continue expanding its manufacturing capacity via operational efficiency improvements at current facilities and future expansion of physical features. In 2025, approximately 99.1% of the company's product volume was manufactured with Freshpet-owned equipment.

• Ingredients and Packaging: Freshpet's products are made with natural and fresh ingredients, including meat and poultry products, vegetables, fruits, whole grains, vitamins, and minerals. The company believes in building long-term supplier and farmer partnerships to source healthy and sustainable ingredients. All of Freshpet's suppliers are well-established companies that the company believes have the scale to support its growth. For raw materials, Freshpet strategically sources from multiple suppliers and identifies alternative sources of supply that meet its quality and safety standards.

• Distribution: Outbound transportation from Freshpet's distribution center facilities is managed through an integrated transportation management system, with carriage provided by a network mostly comprised of refrigerated asset-based carriers, with limited use of refrigerated freight brokers. The service areas for the company's Pennsylvania and Texas distribution center locations are in a continual progression towards growing distribution out of Texas to serve the central and western US in tandem with the scale-up of the Ennis Kitchen, while the Pennsylvania distribution center principally services the eastern US and international businesses. As volume grows, Freshpet will continue to leverage its distribution network to continuously improve customer service levels and decrease certain distribution costs. For certain retailers, the company uses national and regional distributors.

Freshpet competes in the United States dog and cat food market, which has historically been resilient as consumers continue to spend on their pets even during economic downturns. The company believes that pet food spending in North America will increase long-term. Freshpet's competitive advantages include its focus on pet humanization and consumer focus on health and wellness, as well as its broad demographic appeal and penetration into multiple classes of retail. The company's Freshpet Fridges serve as a powerful in-store marketing asset, introducing consumers to the brand and clearly differentiating Freshpet from traditionally merchandised pet food. Freshpet utilizes a holistic media approach to support brand building and consumer engagement, including national television advertising, streaming television, digital, and social media channels. The company maintains a robust online presence designed to engage consumers across their purchase journey, including those seeking delivery or omnichannel options.

Freshpet's customers include leading blue-chip retailers who find that Freshpet grows the sales of their pet category, drives higher traffic, increases shopper frequency, and delivers category-leading margins. As of December 31, 2025, Freshpet is in approximately 30,235 stores, with approximately 24% of stores having multiple Freshpet Fridges. The company sells its products through various classes of retail, including grocery, mass, international, digital, pet specialty, and club. In 2025, Freshpet's largest distributor by net sales accounted for less than 10% of its net sales, and its largest customers, Walmart and Costco, accounted for 25% and 10% of its net sales, respectively. Freshpet's general customer base includes pet owners who view their pets as family members and are willing to spare no expense for their loved ones, driving premiumization across pet categories.