Pet specialty responds to Blue Buffalo mass market sales

Pet specialty retailers’ response was within the expected range of reaction, and not all stores followed the same playbook.

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(Javier Brosch | BigStock.com)
(Javier Brosch | BigStock.com)

Pet specialty retailers pushed back against Blue Buffalo’s decision to sell its dog and cat food in mass market outlets, Blue Buffalo CEO, Billy Bishop said during the company’s third quarter 2017 earnings call. Some pet specialty retailers pulled Blue Buffalo promotions, canceled off-shelf activity for the brand and delayed purchase orders of the dog and cat foods.

“At the end of Q3 into Q4, our sell-in to specialty channels grew only one percent,” Bishop said. “but sell-through growth was 7 percent for the quarter.”

Even big-box pet superstores reacted to Blue Buffalo’s decision to sell in Target, Kroger, Publix and Meijer, as of August, Bishop said in response to a call listener’s question. However, that response was within the expected range of reaction, and not all pet specialty retailers followed the same playbook.

Many pet food outlets focused on minimizing cannibalistic competition with the food, drug and mass market (FDM) sector, Bishop said. Instead, these pet specialty retailers aimed to support Blue Buffalo’s dedicated specialty lines. The brand hasn’t suffered any serious loss of shelf space at pet specialty shops.

Blue Buffalo remains the sales leader for pet specialty retailers, said Bishop, stating that Blue Buffalo enjoys twice the sales of the next brand.

Blue Buffalo sales in mass market retailers

Blue Buffalo has already overtaken other natural pet foods in the FDM retail sector, Bishop said. Despite this, Blue Buffalo hasn’t quite met expected market share goals in all retailers.

“Market share in FDM reached 5 percent in four FDM retailers,” he said. “This already puts Blue among the top five percent among these four FDM retailers, surpassing many well-known legacy and natural FDM brands in only 8 short weeks. As a point of reference, Blue is already over four times the size of Nature’s Recipe, which expanded into FDM in the beginning of 2017 and Blue is closing in on Rachel Ray Nutrish.”

This growth and market share isn’t evenly distributed across the four retailers though. At the store with the largest footprint, Blue Buffalo is growing quicker, he said. Reaching their goal of high single digit or low double digit share may take longer than expected at some retailers. However, he expects Blue Buffalo to take an average six percent of the pet food market in the four FDM retailers by the end of the year.

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