J.M. Smucker’s pet segment net sales decreased by US$72.0 million in the third quarter of the fiscal year 2022 compared to the same quarter in the previous year. However, that decline shrinks to US$5.8 million when US$66.2 million of Natural Balance and private label dry pet food business related sales are not included in the comparison. That adjusted figure equates to an approximate 1% decline.
J.M. Smucker sold its Natural Balance premium pet food business to Nexus Capital Management LP, on January 29, 2021. Smucker divested its private label dry pet food business on December 1, 2021. Smucker released their financial results for the third quarter of fiscal year 2022 on March 1.
In those results, Smucker executives noted that volume/mix decreased net sales by 7 percentage points, primarily driven by declines for dog food, which was partially offset by 6 percentage points of higher net price realization across the pet portfolio.
Smucker’s U.S. retail pet food sales fell to US$696.6 million in the three months ended January 31, from US$768.6 million in the same period of fiscal year 2021. Pet retail profits stood at US$95.7 million in Q3 of FY22, compared to US$135.1 million.
Smucker’s pet segment profit decreased US$39.4 million in Q3 of FY22, driven by higher commodity, manufacturing and transportation costs, along with a decreased contribution from volume/mix. Higher net pricing partially offset the decline.
Smucker’s overall operating income decreased US$255.6 million, or 63%, reflecting a US$150.4 million impairment charge related to the Rachael Ray Nutrish brand and a decrease in gross profit.
In December 2020, The J.M. Smucker Co. announced the sale of its Natural Balance premium pet food business to Nexus Capital Management LP, in a cash transaction valued at approximately US$50 million, subject to a working capital adjustment and before a one-time cash tax benefit to be realized on the sale. The transaction encompasses Smucker pet food products sold under the Natural Balance brand, certain trademarks and licensing agreements, and select employees who support the Natural Balance business. The business generated net sales of approximately US$220 million for Smucker’s fiscal year ended April 30, 2020, which were reported in its U.S. retail pet foods segment.
Nexus Capital was formed in 2013 to make opportunistic debt and equity investments in a broad range of companies and industries, according to its website. Its capital comes largely from U.S. and international institutions: endowments, financial institutions, public and private pension funds, family offices and foundations. The group invests in a range of industries and seeks long-term returns. Nexus invests US$20 to US$150 million per transaction.
Tim Wall covers the dog, cat and other pet food industries as senior reporter for WATT Global Media. His work has appeared in Live Science, Discovery News, Scientific American, Honduras Weekly, Global Journalist and other outlets. He holds a journalism master's degree from the University of Missouri - Columbia and a bachelor's degree in biology.
Wall served in the Peace Corps in Honduras from 2005 to 2007, where he coordinated with the town government of Moroceli to organize a municipal trash collection system, taught environmental science, translated for medical brigades and facilitated sustainable agriculture, along with other projects.
Contact Wall via https://www.wattglobalmedia.com/contact-us/
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