Another Wave of Consolidation

Consolidation is back, and it’s spreading across distribution, manufacturing, technology, pharmacy, and e-commerce. Recent moves involving MWI and Covetrus and Chewy and Modern Animal highlight an animal health industry focused on efficiency, scale and customer relationship control. Expect activity to accelerate through 2026 and into 2027.

One major driver is investor pressure. Animal health attracted significant investment over the last decade due to high growth and fragmented structure. That’s changing, as higher operating costs, labor shortages, slower growth and higher interest rates are forcing companies to prioritize efficiency and profitability. That makes consolidation attractive.

Scale has also become a competitive advantage. Larger organizations are better positioned to invest in technology, centralized operations, inventory management and data analytics — creating meaningful operational and financial advantages in a more competitive environment.

Companies also increasingly recognize the value of controlling the customer relationship. Distributors, retailers, pharmacies, manufacturers and enterprise practice groups all want deeper integration because it influences purchasing behavior, loyalty and data access. Many are building broader ecosystems through acquisition to gain greater control and efficiency.

What does it mean for distributor sales reps (DSRs)?

In enterprise accounts, DSRs will increasingly manage larger, more centralized and contract-driven business. Decisions once made at the clinic level are now often controlled by procurement, operations and corporate leadership teams. There may also be fewer decision makers overall, but those decisions often impact hundreds of locations. Some enterprise accounts will still require strong rep engagement and strategic support; others may become far more transactional. Recognizing the difference is critical from both a productivity and relationship-management standpoint.

Independent practices remain critically important. In most cases, they still offer faster decision-making, greater flexibility, and often place more value on the relationship they have with their DSR. While enterprise groups may represent larger purchasing volume, independents continue to provide distributor reps with opportunities to differentiate through service, responsiveness and expertise — and they are not going away.

The animal health market is changing rapidly, and consolidation is unlikely to slow anytime soon. But for distributor sales reps willing to adapt, the evolving landscape may ultimately create even greater opportunities than the market they leave behind.

Photo Credit:

istockphoto.com/Irina_Strelnikova