The pet industry may be on the brink of a new round of consolidation, and this time the result could have dire consequences up and down the supply chain.

Of course, this industry is no stranger to mergers and acquisitions. Several years ago, it saw a significant amount of M&A activity among pet product manufacturers, as bigger players bought up small, up-and-coming brands in key product categories. Then, more recently, two of the industry’s top distributors went on a private-equity-fueled shopping spree, acquiring smaller, regional competitors in an effort to build a national reach.

In each of these cases, however, the impact on the industry overall was somewhat blunted by the diverse demands of a healthy base of independent pet specialty retailers, which created an environment where emerging companies could rise in the vacuum left by conglomeration.

This latest round of consolidation, I’m afraid, could prove to have a much different result, as it is likely to take place among those same retailers that have fostered the industry’s ongoing diversity.

Many industry experts agree that the recent acquisition of the 32-store Jack’s Pets chain by Canadian pet specialty retailer Pet Valu could be a sign of things to come. Backed by private equity, Markham, Ont.-based Pet Valu was already quickly making inroads in the U.S. market, and its recent purchase of Jack’s Pets has significantly accelerated that process.

Pet Valu is not the only pet specialty retailer with the considerable resources of private equity behind it. There are a number of other fast-growing chains that have received an infusion of outside capital, and given the pet industry’s allure with investors, it is likely that even more retailers will benefit from similar activity moving forward. With this in mind, it is easy to imagine a near future in which successful specialty retailers, flush with investment dollars, utilize acquisitions to quickly make inroads into new markets, similar to what Pet Valu has done.

While the possibility of impending consolidation among retailers may draw comparisons with the acquisitions made by Petco and PetSmart several years ago, there is a key difference this time. When one of the pet superstores acquired another chain, it often opened up opportunities for other retailers to rise up to serve customers who preferred shopping the independents.

This time, however, the pet specialty chains on the buyers’ side of the equation will be high-service operations that look and feel like mom-and-pop pet stores, not impersonal, big-box superstores. This makes it far more likely that shoppers will embrace the new retail brands, as opposed to setting out to look for a new small, neighborhood pet shop to patronize.

Assuming this is how the next round of consolidation plays out, the resulting homogenization of pet retail could reverberate throughout the industry, depressing diversity and even outright killing certain product categories that do not necessarily serve the profit-generating needs of private-equity investors. We’ve already seen shadows of these dynamics at play in Pet Valu’s acquisition of Jack’s Pets, which will see its stores’ "exotic" animal departments shrink to make room for more dog and cat products as they are re-branded.

If the ultimate result of consolidation is less diversity, the industry will surely be left poorer by all of the wealth being poured into it.