The activist investor now owns a 9.3% stake and on Wednesday criticized the board for failing to supervise management and standing by as performance worsened and the stock price tumbled.

"These problems unfolded while more than half of Freshpet's independent directors pursued outside interests with corporate resources and key members of management," Jana wrote in a letter to shareholders made public in a regulatory filing.

Freshpet's shares are off 3% on Wednesday but are up 24% since January, boosted by expectations that Jana, which began buying its stake in September, would push for operational changes, including a possible sale.

In 2021, the stock price hit a record high of $185 only to plunge 79% to under $39 a share in September 2022. The company, which specializes in refrigerated healthy food for pets is currently valued at $3.2 billion, less than half of its $8 billion valuation peak during the pandemic in 2021.

Jana said management "recklessly" deployed capital, raised capital through an equity-linked convertible bond as markets tumbled after the collapse of Silicon Valley Bank, and installed a "misaligned" management compensation program.

The board also permitted key executives hold high-level positions at Hive Brands, which offers competing products.

A company representative said Freshpet has engaged "extensively" with Jana Partners, hopes to avoid a proxy fight and is "making strong progress" by executing its strategy.

"Jana has made clear to us that their sole purpose is to force a sale of the company without consideration to all potential paths to value creation."

Jana nominated Diane Dietz, Timothy McLevish, Jana Partners' co-managing partner Scott Ostfeld, and Kurt Schmidt, executives with experience in the pet food industry and a history of serving on public boards, as candidates. Freshpet's board currently has 11 members and the annual meeting is expected to be held in July.

Jana is putting pressure on the company at a time of industry consolidation. Previously, the firm, founded by Barry Rosenstein, pushed for changes at Whole Foods Market, which sold itself to Amazon.com Inc in 2017, and Pinnacle Foods, which was sold to Conagra Brands in 2018.

(Reporting by Svea Herbst-Bayliss; Editing by Lisa Shumaker)

By Svea Herbst-Bayliss