Did Blue Buffalo sell the company
General Mills to buy Blue Buffalo pet food for $8 billion
General Mills, which is best known for cereal brands like Cheerios and Wheaties, is branching into the fast-growing pet food business with a multi-billion dollar acquisition.
General Mills announced Friday that it's buying Blue Buffalo Pet Products (BUFF) for $8 billion. The brand makes natural food for dogs and cats.
"We know that pets are family members, as you've heard me say multiple times, and we want to continue to do better for all family members, both non-furry and furry," said Blue Buffalo Chief Executive Officer Billy Bishop, in a call with analysts.
General Mills hasn't sold pet food for about 50 years. Chief Executive Officer Jeff Harmening referred to the purchase as a "portfolio reshaping strategy" in the analyst call.
"Reshaping our portfolio is something we intend to continue to do and we'll probably accelerate," he said.
General Mills has experienced some weak profits because of lackluster cereal and Yoplait yogurt sales. But Wall Street didn't seem to embrace its diversification plan. General Mills (GIS)' stock price dipped 3% in early trading. Standard & Poor's said that it lowered General Mills' rating to BBB "because of the substantial increase in leverage," though the outlook remains stable.
But the acquisition makes sense to Larry Light, a brand revitalization expert who used to be the chief marketing officer for McDonald's (MCD).
"The three most profitable aisles in the supermarket are beverage, snack food and pet food," he said. "General Mills is under profit pressure. To me, it makes a lot of sense to get into beverages, snack food and/or pet food. In many parts of the world, people spend more per calorie to feed their pets than they feed their kids."
The pet industry has been growing rapidly in recent years. The pet care and pet service industry saw about a 10 percent jump in sales in 2016 and a nearly 6% increase in profit, according to data compiled by Sageworks, a financial information company.
Related: Consumers sour on yogurt and cereal
He said this is why Mars, Inc., which is known for candy, owns a couple of pet food brands.
General Mills spokeswoman Bridget Christenson said the company has already branched into the snack bar business, having acquired Lrabar, which has vegan and gluten-free energy bars, 10 years ago.
The company also has Nature Valley, a snack bar brand it developed in the 1970s. Christensen said that Blue Buffalo, with its organic products, is a good fit for the company's health conscious image.
The company also bought natural food company Annie's in 2014 for $820 million.
The Blue Buffalo acquisition is expected to close in May.
CNNMoney (New York) First published February 23, 2018: 2:55 PM ET
Blue Buffalo 2021 Sales Up Even as General Mills Overall Pet Segment Takes a Hit
General Mills is continuing to reshape its overall portfolio with strategic acquisitions and divestitures, including the acquisition of Tyson Foods pet treats business, Jeff Harmening, chairman and CEO of the Minneapolis-based company, said in a statement regarding the companys fourth quarter results. General Mills had announced the definitive agreement to acquire Tyson Foods pet treats business in mid-May, a move that would support its fast-growing pet platform.
In the midst of reshaping, though, its pet segment took a 20 percent hit. The company reported net sales of $444 million for the fourth quarter ended May 30, compared to $554.6 million in the year-ago period.
The dip, according to officials, reflects an extra month of results in the prior-year quarter as the segments calendar was aligned to the companys May fiscal year end, as well as comparison against pandemic-driven stock-up demand from pet owners in last years fourth quarter.
Retail sales in measured channels, however, were up double digits in the quarter, according to officials. On a two-year compound growth basis, which eliminates the impact of the extra month of results in fiscal 2020, fourth-quarter net sales were up 5 percent. Segment operating profit was down 24 percent to $103 million, primarily driven by lower volume and higher input costs, partially offset by lower selling, general and administrative (SG&A) expenses and favorable net price realization and mix, according to officials.
For the full year, pet segment net sales increased 2 percent to $1.73 billion, driven by positive contributions from volume growth on a like-for-like basis, partially offset by the comparison to the extra month of results a year ago, officials said. On a 2-year compound growth basis, annual net sales were up 10 percent.
The Blue brand continued to win with pet owners in fiscal 2021, with full-year retail sales up double digits and a strong increase in market share. Segment operating profit of $415 million was up 6 percent, driven by higher net sales and lower SG&A expenses, partially offset by higher input costs.
Overall, General Mills reported net sales of $4.5 billion for the quarter, a decrease of 10 percent from the year-ago period. Net earnings were down 33 percent to $417 million.
Year-to-date, the company reported net sales of $18.1 billion, an increase of 3 percent from the year-ago period. Net earnings were up 7 percent to $2.3 billion.
Im pleased with the results the General Mills team delivered in fiscal 2021 under difficult circumstances, Harmening said. We competed effectively, generated strong top- and bottom-line growth and further improved our balance sheet, allowing us to resume dividend growth and share repurchases. In addition, we advanced our Accelerate strategy by investing in our brands, strengthening our capabilities, building on our leading position as a force for good and taking significant steps to reshape our portfolio and our organization for future growth.
We enter fiscal 2022 ready to compete and win in a highly dynamic consumer environment, Harmening added. Were taking actions to address near-term cost pressures while remaining focused on the long-term growth opportunities we will capture through our Accelerate strategy.
For more of PPN's coverage on General Mills brands, read:
General Mills touts Blue Buffalo success story as proof of acquisition, brand growth capabilities
MINNEAPOLIS Net sales for General Mills pet segment, Blue Buffalo, were up 14% to $436 million in the third quarter of the companys fiscal 2021, ended Feb. 28. Operating profit for the segment was up 9% to $102 million.
Nine-months sales for the segment grew 13% to $1.29 billion, with operating profit up 22% to $312 million.
Growth for the Blue Buffalo brand was driven by positive volume growth and market share gains, and partially offset by investment costs for its new BLUE Tastefuls wet cat food portfolio officially launched in mid-March unfavorable net price realization and mix, and increased media investment, the company reported.
One of the most compelling growth opportunities in our portfolio resides within our pet segment, said Jeff Harmening, chairman and chief executive officer of General Mills. Next month marks the third anniversary of our transformational acquisition of Blue Buffalo. As we think about continuing to reshape our portfolio for enhanced growth, we look to our performance with BLUE as evidence of our ability to successfully acquire, nurture and grow brands and businesses where we can leverage the power of General Mills team and capabilities.
Since its acquisition of Blue Buffalo in 2018, General Mills has delivered significant growth for the pet food and treat brand. From 2017 to the end of February 2021, annual net sales were up $450 million at a more than 10% compounded annual growth rate (CAGR), and annual operating profit has grown $120 million at an 11% CAGR.
Third-quarter growth for both wet food and treats was approximately 25%, shared Kofi A. Bruce, chief financial officer of General Mills. The company plans to focus on these two categories, specifically wet cat food, as well as condition-based diets to drive continued growth.
Wet cat food is an attractive, growing segment with roughly $5 billion in retail sales, said Bethany Quam, global president of General Mills pet segment.
The companys new BLUE Tastefuls launch, which will replace its existing Healthy Gourmet cat food portfolio, specifically speaks to this category with an emphasis on natural formulations.
Since we acquired Blue Buffalo, the US pet food category has grown about 4% a year, and recent trends point to continued mid-single-digit growth for the category going forward, Quam said. Natural pet food, which represents around 30% of total pet food sales today, has led the category with 9% growth in calendar 2020. Because we know pet parents want natural, high-quality ingredients for their pets, we expect the natural segment to continue to drive category growth in the years ahead.
General Mills has also increased Blue Buffalos retail and household penetration, growing primarily in the Food, Drug and Mass (FDM) channel. Blue Buffalo has grown from 22% ACV [all-commodity volume] in the FDM channel in 2017 to 86% ACV in 2020.
Additionally, household penetration is up 6% from 2017, and market share has also grown. The company is also focusing on the pet specialty and e-commerce channels to drive growth through its brand awareness strategy deemed Out with the Old, In with the Blue.
In BLUEs early days with General Mills, we invested significantly to continue to build the brand and accelerate BLUEs expansion in the Food, Drug and Mass channel where about 40% of pet food is sold, Quam said. As a result, since the acquisition, weve increased our distribution in FDM weve nearly doubled our household penetration, and weve increased our all-channel market share to about 7.7% in this fast-growing category.
The company continues to grow internationally, with its pet segment up 40 basis points and other product segments up between 30 and 110 basis points. The companys key international markets include Canada, France, the United Kingdom, Brazil and New Zealand.
Overall, the company posted strong financial numbers for the third quarter. Yet, the Minneapolis-based company could face challenges in upcoming financial quarters.
General Mills in the fourth quarter will begin overlapping the period when the COVID-19 pandemic hit and changed consumer eating patterns. Inflation is becoming a headwind, too.
As we look ahead to Q4 and fiscal 2022 where we'll be comparing against pandemic-driven results that included unprecedented global at-home food demand, we plan to introduce a two-year compound growth metric into our quarterly communications, Bruce explained. This will enable investors to compare our results against pre-pandemic periods and give you better visibility into the underlying momentum in our business. In other words, you'll be able to better see how much demand is sticking.
Net earnings attributable to General Mills in the third quarter were $595.7 million, or $0.97 per share on the common stock, which was up 31% from $454.1 million, or $0.75 per share, in the previous years third quarter. Net sales rose 8% to $4.52 billion from $4.18 billion in the previous years third quarter, reflecting market-share gains amid elevated demand for food at home.
Organic net sales were up 7% in the third quarter. General Mills expects full-year organic net sales to increase about 3.5%.
Companywide over the first nine months of the fiscal year, net earnings attributable to General Mills were $1.92 billion, or $3.13 per share on the common stock, which was up 24% from $1.56 billion, or $2.56 per share, over the same time of the previous year. Nine-month net sales rose 8% to $13.6 billion from $12.6 billion.
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Blue Buffalo Controversy: Complaints and Concerns
Hello, passionate pet parents and curious readers! Today, were donning our detective hats to explore the buzzing hive of concerns surrounding a topic thats close to many of our hearts (and our furry friends): the Blue Buffalo controversy. If youve been navigating the pet food aisles or scrolling through online forums, youve likely encountered whispers or outright debates about Blue Buffalo.
The Heart of the Matter: Whats Stirring Up?
Blue Buffalo has become a household name, revered by many for its commitment to high-quality, natural pet foods. However, its not without its share of controversies and consumer complaints. From legal battles over ingredient misrepresentation to concerns about product recalls, its a brand thats been under the microscope. But fear not! Were here to dissect these issues with surgical precision.
Ingredient Inquisition: Debunking the Myths
One of the core issues at the heart of the controversy has been the accuracy and honesty of ingredient listings. Lets break it down:
| Ingredient Claims | Consumer Feedback | Expert Analysis |
|---|---|---|
| Real meat as the first ingredient | Some reports of meat by-products being discovered. | After thorough review, inconsistencies were found in a few batches. Its crucial for brands to maintain transparency and consistency. |
| No artificial preservatives, colors, or flavors | Widely confirmed by independent analyses. | A commendable practice that aligns with promoting pet health. |
| Grain-free options contributing to better health | Links to DCM (Dilated Cardiomyopathy) in dogs have raised concerns. | While grain-free diets are preferred by some, its essential to consult a vet, as breed-specific dietary needs vary. |
Recall Rundown: Addressing the Alarms
Recalls are a significant aspect that pet owners must be aware of. Blue Buffalo has had its share, primarily due to potential health risks identified in specific product lines. Heres a snapshot:
| Recall Date | Product Line | Reason | Pet Parent Reaction |
|---|---|---|---|
| YYYY-MM-DD | Life Protection Formula | Potential for mold | Concerned but appreciative of the proactive measures. |
| YYYY-MM-DD | Wilderness Chicken Dog Food | High levels of Vitamin D | Worried, with some reporting adverse effects in pets. |
Shedding Light: Expert Tips and Solutions
As we navigate these choppy waters together, here are some expert tips to keep your beloved pet safe and healthy:
- Stay Informed: Regularly check for updates on food recalls and ingredient analyses. Knowledge is power!
- Consult Your Vet: Before making any significant changes to your pets diet, a vets opinion is invaluable.
- Diversity is Key: Consider varying your pets diet to prevent overreliance on a single brand or ingredient.
- Observe and Report: Monitor your pets health and behavior for any changes and report any adverse reactions to food.
Wrapping Up: Navigating the Waters
In the vast ocean of pet food options, controversies like the one surrounding Blue Buffalo serve as a reminder of the critical role of vigilance and informed decision-making in pet care. By keeping our ears to the ground and our eyes on the facts, we can make choices that ensure the health and happiness of our four-legged family members.
Thank you for joining us on this investigative journey. Remember, the bond with our pets is precious, and nurturing it requires attention, love, and sometimes, a little detective work. Heres to happy, healthy pets and the peace of mind that comes with knowing were doing our best for them!
Comment 1: Jaspers Mom: Ive heard that grain-free diets can cause heart issues in dogs. Is it really safe to feed my fur baby a grain-free diet from Blue Buffalo?
Jaspers Mom, your concern resonates with many pet parents navigating the complex world of canine nutrition. The link between grain-free diets and Dilated Cardiomyopathy (DCM) in dogs has indeed stirred a pot of debate. Its essential to understand that certain breeds may be genetically predisposed to DCM, and the absence or presence of grains in their diet isnt the sole factor. However, the FDAs investigation into this matter highlighted a potential association, not a direct causation, with grain-free diets containing peas, lentils, or potatoes as primary ingredients. Our advice? Consult with a veterinary nutritionist to tailor a diet that meets Jaspers specific health needs and genetic background. Balancing his diet with a variety of proteins, grains, and vegetables, rather than strictly grain-free options, might be the key to a heart-healthy regimen.
Comment 2: The Cat Whisperer: My cat seems to love Blue Buffalos wet food, but Ive read some scary stories online. How can I make sure Im not missing any recall information?
Cat Whisperer, its heartening to see your dedication to your feline friends well-being. Staying abreast of recall information is indeed a critical aspect of responsible pet ownership. A two-pronged approach can ensure youre always in the loop: First, subscribe to the FDAs pet food recall alerts, providing real-time updates straight to your inbox. Secondly, engage with online pet owner communities. These forums are often the first to share experiences and recall news, offering a collective vigilance that can act as an early warning system. Remember, knowledge shared is knowledge multiplied, creating a safety net for our beloved pets.
Comment 3: Dog Dad Dan: Is there a reliable way to verify the real meat claim on pet food labels?
Dog Dad Dan, youve touched on a cornerstone of pet food integrity. The real meat claim on labels often serves as a beacon for quality-seeking pet parents. To pierce the veil of marketing, look for the AAFCO (Association of American Feed Control Officials) statement on the pet food packaging. This statement ensures that the product meets established nutritional standards. Furthermore, delve into the brands sourcing practices. Ethical brands are transparent about their sourcing, often providing detailed information on their websites or packaging about where their ingredients come from. Engaging directly with customer service can also offer insights into their quality assurance processes. Armed with this information, youll be better equipped to make informed decisions about what youre feeding your four-legged family member.
Comment 4: Feline Friend Fiona: My vet recommended adding more moisture to my cats diet. Does Blue Buffalo offer suitable options?
Feline Friend Fiona, kudos for seeking ways to enhance your cats hydration! Cats, being desert animals historically, often dont have a strong thirst drive and can benefit significantly from moist food options. Blue Buffalo does offer a variety of wet foods designed to cater to this need, from pt to shredded varieties, which can be an excellent way to increase your cats water intake. Additionally, consider introducing a cat water fountain, as many cats are enticed by running water and may drink more frequently from a fountain than a stagnant bowl. Remember, the goal is to provide options that entice your cat to consume more water, promoting kidney health and preventing urinary tract issues.
Comment 5: The Parrot Parent: I know this is mainly about dogs and cats, but does Blue Buffalo have any products or nutritional guidelines for other pets, like birds?
Parrot Parent, its refreshing to see concern for the nutrition of our feathered friends! While Blue Buffalo primarily focuses on cat and dog nutrition, the principles of quality ingredients, balanced nutrition, and transparency hold true across the pet spectrum. For avian diets, its pivotal to seek brands that specialize in bird nutrition, offering a balance of seeds, fruits, vegetables, and pellets tailored to your birds species-specific needs. Consulting with an avian veterinarian can provide personalized dietary recommendations, ensuring your parrot receives the variety and quality of nutrition necessary for a vibrant, healthy life. Remember, each pet, regardless of species, deserves a diet that mirrors their natural dietary habits as closely as possible, fostering longevity and vitality.
Comment 6: Breezy Beagle: Im worried about the environmental impact of pet food production. Does Blue Buffalo take steps to reduce its carbon pawprint?
Breezy Beagle, your concern for our planet echoes a growing awareness among pet parents about the environmental pawprints left by their choices. Blue Buffalo is among the brands that have started to acknowledge their role in this ecosystem. Theyve taken strides towards sustainability by focusing on responsibly sourced ingredients and improving the recyclability of their packaging. To dig deeper, consider exploring their corporate sustainability reports or press releases for specific initiatives, such as partnerships with environmental organizations, commitments to renewable energy, or innovations in supply chain management. As consumers, voting with our wallets for brands that prioritize the planet can drive more significant changes across the industry, encouraging all players to adopt more eco-friendly practices.
Comment 7: Persnickety Poodle: Ive noticed my dog is picky with food. How can I ensure theyre getting the right nutrients if they keep turning their nose up at high-quality options like Blue Buffalo?
Persnickety Poodle, the challenge of catering to a gourmet canine palate while ensuring nutritional completeness is one many pet parents face. Variety, in this case, might just be the spice of life your dog is craving. Incorporating different forms of Blue Buffalo products, such as mixing wet food with dry kibble or using their nutritional treats as meal toppers, can entice even the most discerning diners. Also, consider gradual dietary transitions and consulting with a veterinarian for appetite-stimulating tips or to check for underlying health issues. Sometimes, the solution lies in making mealtime more engagingthink food puzzles or feeding toys that make eating a fun and interactive experience, stimulating both their mind and appetite.
Comment 8: Tabbys Typist: Can switching to Blue Buffalo help with my cats allergies? Ive heard diet can impact this.
Tabbys Typist, youve tapped into an essential aspect of pet health management. Indeed, dietary choices can significantly impact allergies in pets. Blue Buffalo offers specific formulas designed with hypoallergenic needs in mind, utilizing novel proteins (like duck, venison, or salmon) that are less likely to trigger allergic reactions compared to more common proteins (such as chicken or beef). Additionally, their grain-free lines can be beneficial if your cats allergies are grain-sensitive. However, pinpointing allergies can be akin to solving a complex puzzle. It involves trial and error, and sometimes, an elimination diet under a vets supervision is the best approach to identifying the culprit. Keep a detailed food diary to monitor Tabbys reactions to different ingredients, aiding in the detective work necessary to bring relief.
Comment 9: The Reptile Wrangler: I know Blue Buffalo is primarily for cats and dogs, but are there any of their products or ingredients that could be beneficial for reptile pets?
The Reptile Wrangler, venturing into the realm of reptile nutrition with a brand like Blue Buffalo presents an interesting proposition. While their products are tailored for mammalian companions, certain aspects, such as the quality and source of ingredients, can offer indirect benefits. For instance, reptiles that require animal protein could potentially benefit from the high-quality meats used in Blue Buffalos dog and cat foods, albeit as a supplementary part of their diet. However, its paramount to approach this with caution, as reptiles have highly specific dietary needs and sensitivities. Before considering any cross-species dietary experimentation, a consultation with a vet specializing in reptilian health is crucial. They can offer guidance on safely incorporating certain types of food into your reptiles diet without disrupting their nutritional balance.
Comment 10: Golden Guardian: How can I make sure that my senior dog is getting the most out of his diet with Blue Buffalo products?
Golden Guardian, as our beloved pets enter their golden years, their nutritional requirements evolve, necessitating a diet that supports their changing health needs. Blue Buffalo recognizes this with their senior-specific formulations designed to support joint health, cognitive function, and maintain optimal weight. These products often include higher levels of omega-3 fatty acids, antioxidants, and other essential nutrients to combat the signs of aging. To maximize the benefits for your senior dog, consider combining dry food with wet options to enhance hydration and make meals more appealing to older dogs who may have sensitive teeth or a diminished sense of smell.
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