Sales of General Mills’ pet food products, including Blue Buffalo, grew rapidly in the early stages of the COVID-19 pandemic in the United States, along with many other consumer goods, as people prepared to shelter in place. General Mills’ executives discussed the effects of COVID-19 and resultant stock market crash on dog and cat foods during the company’s third quarter of fiscal year 2020 earnings call.
Pet food retail sales have increased since the beginning of March, according to data collected by Nielsen, said Jeff Harmening, General Mills chairman and chief financial officer.
“Our U.S. retail sales results for the week ended March 7 were up low double-digits, including pet, and we anticipate takeaway for the week ending March 14 will be many times higher across all channels,”
This spike likely resulted from people stocking up, and therefore will not continue, but Harmening believes overall at-home food demand will remain elevated in the fourth quarter. Much of this pandemic buying pattern may not unwind until fiscal year 2021.
Pet food industry during recession
Both the novel coronavirus pandemic and associated economic disruption remain hard to model. No one can say with certainty how long either will last. However, even if COVID-19 does push the U.S. economy into recession, the pet food industry may suffer less than other industries.
“During the last recession we didn’t see a pullback on pet food,” Harmening said in response to a question.
Inelastic demand for pet food, even during the Great Recession, was a selling point for Blue Buffalo when General Mills leadership was considering the purchase of the pet and treat food company, he said.
“What we have seen so far in the fourth quarter is not to the same degree as we have seen in North America retail, but people love their pets and they want to make sure they take care of their pets.” He said. “We feel like our retail takeaway for pet in the fourth quarter is going to be robust.”
Demand for pet food will remain very strong in the U.S., he said, despite economic hardships resulting from the virus. He anticipates the pet food category to remain robust.