Milk-Bone dog snacks and Meow Mix cat food were particularly strong performers for J.M. Smucker in fiscal year 2023, Mark Smucker, president of J.M. Smucker said during the Consumer Analyst Group of New York (CAGNY) conference on Feb. 22 in Boca Raton, Florida, USA.
“With an improved operating environment for cat food, growth in high-margin dog snacks and the divestiture of low-margin pet food brands, we're experiencing margin improvement in our pet food segment,” Smucker said.
J.M. Smucker’s pet division reached US$1.5 billion in net sales during fiscal year 2023, excluding sales of pet food and treat brands divested in 2023. Cat food made up 39% of that total with pet snacks accounting for US$61%.
J.M. Smucker dog treat past performance and future strategy
“We are a leader in the attractive dog snacks and cat food segments, which continue to experience strong macro tailwinds and growth,” Smucker said. “In dog snacks, we are the leader with a 21% dollar share. Dog snacks have historically been the fastest growing segment in the pet category and deliver significantly higher margins than pet food…Milk-Bone has grown dollar share for ten consecutive quarters, driven by core offerings and premium positioned innovation.”
The success of Milk-Bone came after an effort by the company to update the brand.
“Four years ago, we set out to revitalize the Milk-Bone brand with a focus on its largest sub-segment, biscuits,” Smucker said. “We wanted to change the perception that biscuits are boring with refreshed packaging increased marketing investment and consistent elevated innovation.”
Following those strategic initiatives, Milk-Bone biscuit sales grew more than 40% during the past four years, he said. This growth resulted in approximately 160 million in dollar sales and three-fourths of Smucker’s growth in the biscuit segment.
“We are now leveraging this playbook in the long-lasting chew, and soft-and-chewy segments,” he said.
The company plans to continue developing the Milk-Bone brand while latching on to the pet product humanization trend by including Jiff peanut butter in a dog treat to be released later this year.
“We anticipate our total dog snacks portfolio to grow approximately 3% annually over the next two years to US$1 billion in annual net sales,” he said.
J.M. Smucker cat food performance and plans
Meow Mix cat food faced a challenging operating environment during the past year, but has now returned to growth in category share and profit, Smucker said.
“The dry cat food category has experienced sluggish innovation while the needs of the consumer have evolved,” he said. “We have a robust pipeline of Meow Mix innovation that will provide opportunities for trade-up and treating occasions.”
J.M. Smucker sold brands
In 2023, J.M. Smucker sold several pet food and treat brands to Post Holdings, a consumer-packaged goods holding company. The transaction included the Rachael Ray Nutrish, 9Lives, Kibbles 'n Bits, Nature's Recipe, and Gravy Train brands as well as the Smucker’s private label pet food business.
“Over the next two years, we expect continued margin expansion upon the wind-down of co-manufacturing and transition services related to the divested brands along with benefits from transformation initiatives,” Smucker said.
