USA – In the third quarter of fiscal year 2024, General Mills reported a 3% decline in net sales for its pet segment, which includes Blue Buffalo.
General Mills entered the pet food market in 2018 by acquiring Blue Buffalo, a North American manufacturer and marketer of consumer foods and pet food.
Blue Buffalo’s products, including its dry formulas featuring LifeSource Bits, are manufactured in the U.S. through a hybrid network of owned and contracted facilities.
The net sales for this 3rd quarter amounted to US$624 million, which was attributed to lower pound volume, partially offset by favorable net price realization and mix, as stated in a press release by the company.
Organic net sales were down 3% compared to the previous year, which saw double-digit growth. However, organic net sales increased by 5% on a two-year compound growth basis.
The quarter’s net sales results reflected declines in pet treats and dry pet food, partially balanced by growth in wet pet food.
Segment operating profit rose by 25% to US$128 million, primarily due to cost savings and favorable net price realization and mix, despite the lower volume, input cost inflation, and higher selling, general, and administrative expenses.
For the nine months, General Mills’ pet segment net sales declined by 2% to US$1.8 billion, with organic net sales also down 2%.
However, segment operating profit increased by 10% to US$342 million, driven by favorable net price realization and mix, along with cost savings, despite challenges such as lower volume, higher supply chain costs, input cost inflation, and supply chain deleverage.
During the Consumer Analyst Group of New York (CAGNY) conference in February, Jeff Harmening, chairman and CEO of General Mills, highlighted the resumption of volume sales growth for Blue Buffalo’s Life Protection formulation in the United States.
After a decline in late 2023, sales of this product increased by high-single-digits at the beginning of 2024.
Harmening emphasized the strength of the Blue Buffalo brand and the effectiveness of the company’s refreshed advertising campaign in communicating the benefits of superior ingredients.
He also noted that increased innovation in fiscal year 2024 will contribute significantly to future growth.
Despite recent challenges in the pet food industry, General Mills remains committed to driving growth and innovation in its pet segment.
For all the latest grains industry news from Africa, the Middle East, and the World, subscribe to our weekly NEWSLETTERS, follow us on LinkedIn, and subscribe to our YouTube channel.
