The J.M. Smucker Company, owner of Big Heart Brands pet foods, announced the results of their second quarter of fiscal year 2017 on November 17 in an earnings conference call. Net sales decreased 8 percent overall. Net sales of pet foods decreased as did profits for that segment.
J.M. Smucker pet food sales decline
Net sales in the pet food segment decreased by US$35.7 million to US$531 million. This decline was primarily due to volume/mix, which reduced net sales by 5 percent. This was driven by the Meow Mix and Kibbles 'n Bits brands. Net price realization was also slightly lower.
J.M. Smucker pet food profits decline
Pet food segment profit decreased US$0.5 million. The impact of volume/mix drove this decline by offsetting lower manufacturing costs, incremental synergy realization and a decrease in marketing expense.
Premium dog food in mass market
Beyond financial data, Smucker’s president announced the company’s plans to offer their premium pet food in retail outlets other than specialty stores.
“We are excited to share our plans to offer premium dog food in grocery and mass outlets through the introduction of the Nature's Recipe brand in these channels,” said Mark Smucker, president and CEO of J.M. Smucker. “Nature's Recipe premium pet food has a long history participating in the pet specialty channel and is uniquely positioned to meet the consumers’ increasing desire for natural and wellness offerings at accessible price points. This launch allows us to participate in the fast-growing premium segment within traditional grocery outlets and leverage our scale in these channels.”
The first shipments of Nature’s Recipe to these retailers is expected to begin in the fourth quarter, along with marketing efforts, said Smucker.
Sales for Nature’s Recipe were down for the quarter, he said.
Sales down for pet treats and snacks
Sales for pet snacks dropped mid-single-digits in the quarter compared to the same period last year. Milk-Bone brand sales were down low-single-digits.
Although sales of Milo's Kitchen treats were down, Smucker expects a packaging redesign to help boost sales long-term as protein-based snacks increase in popularity.
