Success in food, drug and mass market retail outlets helped General Mills’ pet food segment, in other words Blue Buffalo, achieve net sales of US$384 million in the third quarter of fiscal year 2020. Blue Buffalo’s pet food and treat net sales grew 11% over the same quarter in the previous year.
In particular, Blue Buffalo’s two largest product lines, Life Protection Formula and Wilderness, sales growth hit double-digits. General Mills’ pet segment operating profit increased 29% to US$94 million. Higher net sales drove this profitability, while higher media expenses detracted from it.
“We’re excited about the growth prospects ahead and continue to remain confident in the long-term opportunities for Blue Buffalo,” said Jeff Harmening, General Mills chairman and chief financial officer, during the company’s third quarter of fiscal year 2020 earnings call.
During the first nine months of FY20, General Mill’s pet segment net sales increased 11% to US$1.14 billion. All-channel retail sales were up double digits. Pet segment operating profit was up 62 percent of US$256 million.
General Mills has expanded distribution of Blue Buffalo pet foods in FDM channels, including the launch of Wilderness in last year’s fourth quarter. From Q3 FY19 to Q3 Y20 in those retailers, Blue Buffalo’s sales grew by 31% among stores that have sold the brand for more than 18 months.
While FDM sales continue to grow, pet specialty sales continue to decline for Blue Buffalo. However, the brand continues to launch new products into those channels, including Baby Blue, a puppy formulation, and True Solutions Perfect Coat, a therapeutic cat food formulation.
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 earnings call.
Pet food retail sales have increased since the beginning of March, according to data collected by Nielsen, Harmening said.
“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.
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