The big news in the pet food industry a few weeks ago saw Blue Buffalo being bought by General Mills for $8 billion ($40 per share) in cash.
According to the press release issued by General Mills, their interest in Blue Buffalo was piqued by Blue’s loyal customer base, especially among millennials. That makes the company well positioned to capitalize on the pet humanization and pet food premium-ization trends.
Blue Buffalo holds about a 3 percent market share, so there’s plenty of room for growth; plus the company does well in online sales. They garnered $250 million in e-commerce sales in 2017, representing 75 percent growth over 2016.
While 3 percent market share doesn’t sound like much, it’s large enough to have earned them fifth place in overall sales, and they were moving up fast when they were acquired by General Mills. Plus, after just one year in the mass market channel, they surpassed brands that had been there for decades.
Although it wasn’t mentioned, I wonder if Blue Buffalo’s “teflon coating” is a factor, too. Credit their marketing. A large segment of the pet parent population is unaware of, or indifferent to, the fact that they’ve also had a rough couple of years in some ways.
They settled two false advertising lawsuits in 2016, one by Purina and the other a class action, after two years of litigation. Last year saw multiple recalls of Blue Buffalo and, in November 2017, Whole Dog Journal removed them from their recommended pet food list, citing the lawsuits, recalls, and the fact that the company wouldn’t provide nutritional analyses of their products.
Talking to reps from other pet food companies, some wondered if their companies could have survived, let alone prospered, had they gone through similar problems. Pet owners of late are quick to abandon a brand for a single infraction, even if in reality the infraction is a nothingburger.
So now, General Mills owns Blue Buffalo. You’d probably be surprised to learn who owns the brand of dog or cat food you feed. There’s not enough space to list them all, of course, but following are some of the more well known brands and the companies that own them:
Mars Inc., through its Mars Petcare division, is the largest of the pet food companies. Here are some of their brands: Cesar, Eukanuba, Iams, Nutro, Pedigree, Royal Canin, Sheba, Whiskas, the Waltham Centre for Pet Nutrition, and the more than 900 Banfield Hospitals.
Purina is the second largest and its brands are well known. Just look for the checkerboard square. However, you won’t find it on Merrick, which Purina bought in 2015.
J.M. Smucker Co. is next. Among its best known brands are Natural Balance, Nature’s Recipe, Milk Bone, 9 Lives, Meow Mix, Gravy Train, Kibbles ‘N Bits and Milo’s Kitchen. Some of their canned grocery brands were recalled a couple of weeks ago because of pentobarbital contamination.
Hill’s Pet Nutrition, a subsidiary of Colgate-Palmolive Co., produces Science Diet and Science Diet Prescription Diets.
Way down the total sales list, but still major players, are Wellness, Holistic Select, Eagle Pack and Old Mother Hubbard; products of Wellpet, LLC, which is owned by Berwind Corp., a private investment management company.
It’s expected that such movement in the pet food industry will continue. Stay tuned.