General Mills’ pet food segment, including Blue Buffalo, reached US$368 million in the first quarter of fiscal year 2020 (Q1 FY20). While sales in both e-commerce and food, drug and mass market channels increased, pet specialty retail sales slipped. General Mills executive discussed these and other pet food segment financial results during the company’s earnings call on September 18.
General Mills’ pet food sales were led by strong growth in the food, drug and mass market channel, although pet specialty retail sales declined. Net sales in all retail channels increased by double digits, while General Mills’ pet foods gained market share. Net sales organic growth rate was seven percent higher in Q1 FY20 compared to the same period last year.
Operating profits hit US$81 million for General Mills’ pet food segment in Q1 FY20. That profitability represents an increase of 458% compared to last year.
Within the food, drug and mass market retail channel, Blue Buffalo pet food sales increased by 50% at retailer outlets that have carried the brand for more than 12 months. Those stores were Target, Kroger, Albertsons, Meijer, H-E-B, Giant Eagle and Hy-Vee.
E-commerce pet food sales also increased for General Mills. Along with market share gains, online sales of Blue Buffalo increased by 20 percent.
However, pet specialty retail sales of General Mills’ dog, cat and other pet foods declined in Q1 FY20 by double digits, while losing market share.
In February 2018, General Mills and Blue Buffalo Pet Products entered into a definitive agreement under which General Mills acquired Blue Buffalo for approximately US$8 billion. In August 2017, Blue Buffalo began selling in four FDM retailers: Target, Kroger, Publix and Meijer. General Mills purchased Blue Buffalo in February 2018. In fiscal year 2019, Blue Buffalo pet food sales grew by 11% to reach US$1.43 billion for the General Mills owned brand. General Mills’ pet segment operating profit hit US$268 million in FY19.
In October, Billy Bishop, co-founder of Blue Buffalo and General Mills’ pet segment president, will leave his role in active, daily management to become a brand advisor for General Mills. Bethany Quam will take over Bishop’s role as group president on October 1.
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