Pet food sales surge while the federal workforce that guards them collapses

A Threshold Crossed

The North American direct-to-consumer pet food market reached $4.11 billion in 2025 and is projected to hit $15.4 billion by 2033, even as federal food safety agencies have shed over 7,000 staff since January 2025. That divergence — rapid market expansion against a collapsing inspection workforce — is forcing brands to institutionalize quality assurance practices that once lived in spreadsheets and vendor assurances.

Smalls, the direct-to-consumer cat food brand founded in 2017 by Matt Michaelson and Calvin Bohn, recently posted for a Food Safety Quality Assurance associate — a hire that marks the moment a subscription fresh-pet company admits it must operate like a regulated food manufacturer. According to InterviewGuy.com, industry benchmarks show FSQA technicians need one to two years of food manufacturing experience to start, three to five for fluency in Hazard Analysis and Critical Control Points, Safe Quality Food certification, and Good Manufacturing Practices. InterviewGuy.com found senior floor-based QA Technician II roles, which involve monitoring production lines against USDA and internal specs, often require five-plus years and carry supervisory expectations. Average salary sits around $49,000 annually, according to InterviewGuy.com, but the real cost is scarcity: Indeed reported 2,264 open FSQA positions nationwide, with 535 in California alone.

Smalls' recent retail partnerships, including Mud Bay (October 2025), Fauna Foods (February 2026), Phillips Pet Food & Supplies and Independent Pet Supply (March 2026), and Supreme Pet (August 2026), expand the regulatory surface area further, adding brick-and-mortar compliance layers to a model built on direct shipping.

Why Quality Investment Now

Premiumization is the engine. U.S. pet owners spent over $51 billion on food and treats in 2023. The National Animal Supplement Council found 65% of dog and cat owners willing to pay more for wellness-positioned products. In China, pet food claimed 52.8% of a $41.9 billion pet market in 2024, with U.S. brands supplying 69% of imports. Average annual spend per pet in urban China jumped from $179 in 2024 to a projected $254 by 2030, a $75 delta across 124 million pets representing billions in new margin that only exists if the product delivers on its health claims.

Fresh and frozen formats captured 41.4% of global DTC revenue in 2025 ($3.83 billion). Dry kibble held 25.4%; wet food, 20.1%. Customized nutrition, still just 13.1% of share, is the fastest-growing slice. Smalls plays in fresh and gently cooked cat food: precisely the segment where cold-chain integrity, pathogen control, and lot-level traceability are non-negotiable. A single thiamine deficiency or Salmonella event, like the Go Raw and Pretty Bird recalls the FDA posted in February 2026, erases trust built over thousands of subscriptions.

Regulatory pressure tightens in lockstep. AAFCO's Pet Food Label Modernization rules overhauled nutrition fact boxes and nutrient declarations in February 2026. The PURR Act moved to centralize FDA authority over marketing and labeling in January 2025. China's GACC registration hurdles now routinely delay imported veterinary diets for weeks. Brands that once treated compliance as a checklist now need dedicated FSQA infrastructure to navigate divergent standards across North America, Europe, and Asia-Pacific while also feeding the same subscription promise of doorstep freshness.

The workforce hasn't kept pace. Federal agencies (FSIS, APHIS, FDA) absorbed severe 2025 staffing cuts that weakened inspection capacity. The private-sector auditing pool is shrinking too. Food-safety.com notes the sector faces "a significant workforce shortage, particularly in roles related to auditing, inspections, and assessments." Smalls' FSQA Associate posting isn't a one-off; it's a leading indicator of what every scaling DTC brand will need: in-house quality ownership that co-manufacturers and 3PLs can't fully absorb.

Where the People Went

As the opening noted, the workforce reduction happened in a single stroke — not gradually, not department by department — removing more than 7,000 positions across agencies at once. The FDA lost 3,859 people in fiscal 2025 and another 473 in 2026. The CDC dropped 2,499 then 390. USDA's losses were steeper: 19,984 in 2025, 2,269 in 2026, with the Food Safety and Inspection Service down 913 across both years. Cuts came through hiring freezes, early retirement incentives, reductions in force, and a Deferred Resignation Program. Health and Human Services Secretary Robert F. Kennedy Jr. announced a further 3,500-person reduction at FDA: a 20 percent cut that included more than 170 staff from the Office of Inspections and Investigations.

Inspectors who remained quit when 65 percent of their support staff — the people who book travel, secure diplomatic passports, coordinate with foreign authorities — vanished. Foreign facility inspections, the only way to verify safety conditions firsthand, have fallen to their lowest level since the Food Safety Modernization Act took effect in 2011. The FDA employed 443 food safety inspectors in 2024 to cover 36,600 food facilities; it estimates it needs about 1,500. States conduct roughly 90 percent of produce inspections and 75 percent of manufactured food inspections under federal grants, and those state programs were told to expect funding cuts approaching 60 percent. The proposed fiscal 2026 FDA budget would cut Field Laboratory Operations (the lab capacity that actually tests food samples) by 54.4 percent. In April 2025, the FDA suspended its quality control program for food testing labs and halted efforts to improve avian influenza testing in dairy and pet foods due to recent staff reductions.

"The termination of these two important advisory committees is very alarming," said Brian Ronholm, director of food policy at Consumer Reports. "Without the input of these committees, we have little confidence that the food safety policies at USDA and FDA will, in fact, 'Make America Healthy Again,'" said Sandra Eskin, a former USDA acting under secretary for food safety.

The USDA eliminated the National Advisory Committee on Microbiological Criteria for Foods (established 1988) and the National Advisory Committee on Meat and Poultry Inspection (established 1971) in March 2025. At the time of disbandment, NACMCF was reviewing USDA's regulatory approach for Listeria monocytogenes and researching Cronobacter contamination in powdered infant formula. Those projects didn't transfer. They stopped.

The private sector feels the same squeeze. Deloitte's 2024 manufacturing talent study found a gap in applications for open positions alongside the skills gap itself, projecting 3.8 million net new manufacturing employees needed by 2033. Qualified microbiologists and laboratory technicians are in short supply globally; the International Labour Organization counts a deficit of over 150,000 trained food safety professionals in Asia and Africa combined. UNESCO reports less than 5 percent of agricultural science curricula in developing countries include food safety diagnostics. Automation offers partial relief, but complex analyses still require expert interpretation.

For CPG companies, the pressure is structural. Deloitte's 2025-2026 consumer products outlook forecasts labor cost growth moderating to 3.5-4.5 percent annually as overall wage inflation cools, but projects continued above-average pressure in supply chain, operations technology, and sustainability-related roles where skill shortages are structural rather than cyclical. The most reported method for building digital skill sets: hiring new talent (68 percent). More than half of manufacturers (53 percent) use in-house training for executives; 43 percent use vendor courses. Forty percent use contract or contingent labor. Between 65 and 70 percent outsource many roles across technology, data, and cybersecurity.

The global food safety testing market was valued at $21.24 billion in 2025, projected to reach $41.42 billion by 2034 at 7.7 percent CAGR. Demand for testing outpaces the people who can design, run, and interpret it. FDA investigated 26 outbreaks in 2024 and identified the source in 20 (77 percent). In 2025, it closed 11 investigations and pinned down the source in only 4 (36 percent). More than fifty food recalls have been logged in the United States so far in 2026. The CDC estimates 48 million illnesses, 128,000 hospitalizations, and 3,000 deaths annually from foodborne diseases. USDA puts the cost of Salmonella alone at over $4.1 billion a year in medical expenses and productivity loss.

When lab capacity is cut by half, testing slows. Outbreaks take longer to trace. People get sick while paperwork catches up. The recall reaches secondary suppliers, food service companies, and major retailers. That's what happens when you can't inspect the original source quickly: contamination travels through the supply chain while paperwork catches up.

Inside Smalls' Quality Build

Smalls does not own a factory. Its wet food recipes are made in New Jersey while headquarters sit in New York, a split that forces every batch through a co-manufacturing network rather than an internal plant. The brand says its food is crafted by animal nutritionists and cooked in USDA-inspected human food processing facilities, phrasing that signals contract production in plants built for people food, not pet food. Each batch is individually tested for pathogens and must pass strict nutritional and microbiological standards before it ships. That testing regime is the quality anchor, and it lives outside Smalls' four walls.

The co-manufacturing model is standard in premium pet food, but Smalls' reliance on human-grade facilities narrows the pool of eligible partners. Alphia, one of North America's largest pet food co-manufacturers, runs six U.S. plants and produces more than one billion pounds of dry food and treats annually. BrightPet Nutrition Group operates facilities in Lisbon and Dayton, Ohio; Sherburne, New York; Kiel, Wisconsin; and Salem, Oregon. New Horizons Food Solutions applies SQF-certified, GFSI AA-rated controls used in human food production to its structured blending and premix work. Smalls has not publicly named its co-packer, but the "USDA-inspected human food facility" language places its production in a tier of contract manufacturers that can meet human-food GMPs: a smaller, more expensive subset of the co-man landscape.

On the outbound side, Smalls has spent the last year stitching together a distribution backbone that looks more like a 3PL roll-up than a traditional DTC fulfillment loop. Brian Oost, Smalls' senior director of Retail, framed the Supreme Pet agreement as a way to make it easier for retailers to offer new and differentiated fresh feeding solutions. Doug Marx, Supreme Pet's founder, called Smalls the leader in fresh cat nutrition. The language is retail-facing, but the operational implication is cold-chain logistics: frozen fresh food moving through independent distributors' freezer networks, not Smalls' own trucks.

That cold chain is where the FSQA Associate hire earns its keep. A brand that ships frozen, gently cooked recipes at $4 per day per cat ($120 monthly at minimum) cannot absorb a temperature excursion or a pathogen hit. The co-manufacturing partner owns the kill step; the 3PL partners own the hold; Smalls owns the specification and the release decision. The FSQA role sits at that intersection, reviewing co-man certificates of analysis, auditing carrier temperature logs, and managing the deviation workflow when a pallet arrives warm at a distributor warehouse.

The infrastructure play is not finished. Smalls still sells direct to consumers via subscription, which means it runs a parallel fulfillment line (likely a dedicated 3PL for frozen DTC boxes) alongside the wholesale distributors. Two networks, two sets of SOPs, one quality system. The FSQA hire is the first dedicated headcount to knit them together.

Ripples Across CPG

Smalls' FSQA Associate posting is not an isolated personnel move. It is a market signal that the DTC pet food segment (projected to reach $22.8 billion by 2033 at a 20.2% CAGR) has entered the phase where quality infrastructure becomes a competitive requirement, not a differentiator. The signal travels fast. In a CPG sector valued at $2 trillion as of March 2024, emerging brands have been gaining share by launching quickly, testing in market, and iterating based on consumer feedback. That speed advantage only holds until a recall or a compliance gap forces a reset. Smalls' hire tells every other founder in the category that the window for informal quality oversight has closed.

Competitors are already reacting. The DTC model's benefits, including cutting supply chain costs, direct consumer data access, and larger margin potential, have drawn dozens of brands into human-grade fresh pet food. Deloitte's 2026 Consumer Products Outlook found 79% of executives believe the balance of power is shifting to retailers. Walmart's 27% global ecommerce sales jump in Q3 2024 underscores the point: traditional retail is not ceding the channel. It is demanding more. Sixty-five percent of CPG executives expect even more private-label competition. Eighty-eight percent of retailers surveyed want increased collaboration with CPG partners. When a brand like Smalls formalizes FSQA, it raises the bar for what retail buyers will accept from any DTC supplier trying to win shelf space.

The talent market feels the pressure immediately. Food safety roles were already scarce before the 2025 federal staffing losses at FSIS, APHIS, and FDA undermined inspections and disease prevention. Now the CPG side competes for the same shrinking pool. Deloitte's 2025 smart manufacturing survey found 48% of respondents reporting moderate to significant challenges filling production and operations management roles. Sixty-nine to 72% cited similar hiring difficulties for IT, OT, data science, engineering, application development, and cybersecurity. Food safety sits at the intersection of all of it. Manufacturers are responding with the same hiring and outsourcing patterns documented across the sector: more contract auditors, more third-party verification, more centers of excellence.

That outsourcing trend connects directly to how DTC brands scale quality. Smalls relies on co-manufacturing partnerships and 3PL logistics. So do its peers. Fifty-nine percent of CPG executives are outsourcing core functions or forming centers of excellence. Many are shortening supply chains to de-risk. But shorter chains with external partners demand more oversight, not less. The Cyclospora outbreak linked to lettuce in early July 2026 drove a 28% drop in salads and leafy greens volume that remains largely unrecovered. Produce volume overall fell 7.4% over four weeks. Retail food and beverage volume declined 1.1%, weighed down by food safety concerns. That halo effect — amplified attention on safety spilling across categories — means a pet food brand's quality gap becomes a retailer's category risk.

The hiring signal also reshapes what recruiters prioritize. CPG and food & beverage recruiters now flag leaders with experience in fast-growing, innovation-driven environments who can scale products across retail and DTC channels. Ecommerce recruiters specifically seek end-to-end visibility across channels, especially DTC operations and data. Procurement and supply chain leaders who can manage commodity volatility, implement dual sourcing, and improve cost structures are in high demand. Agile leaders who balance speed with operational discipline. The FSQA Associate role at Smalls sits at that intersection: part quality technician, part supply chain auditor, part data analyst.

The ripple reaches compensation. While the research does not publish a current FSQA salary band for the pet food niche, the broader CPG sales representative average sits at $92,848 annually. Specialized quality roles in co-manufacturing oversight command a premium. Brands that treated quality as a line-item cost are reclassifying it as a capital investment: 78% of manufacturers allocate more than 20% of their improvement budget to smart manufacturing initiatives, and 88% expect investments to continue or increase. Quality infrastructure is eating a larger share of that budget.

Smalls' FSQA posting was a threshold crossing. The next brand to post that role won't be crossing a threshold — it will be following a standard. The question is whether the workforce will be there to fill it.

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