General Mills is hoping pet food will help it fight lagging cereal and snack sales. The company said that it plans to double distribution of Blue Buffalo pet food items in the food, drug and mass market channel, including grocery, drug stores and big box retailers. It also plans to make more of its products available in more stores. The efforts will lead to double digit growth in Blue Buffalo sales for the year, the company said.
Blue Buffalo's sales fell by about 7 percent the three months ending in November compared to the same period last year. General Mills said that Blue Buffalo sales surged by 25 percent in the fall of last year after products were sold in mass retailers for the first time. Blue Buffalo was an independent company previously.
In addition to increasing distribution, General Mills wants to develop more varieties of Blue Buffalo wet food and pet treats.
General Mills bought Blue Buffalo for $8 billion earlier this year. Harmening referred to the purchase as a "portfolio reshaping strategy" at the time. "We know that pets are family members," he said. "We want to continue to do better for all family members."
Pet food is growing faster than the broader packaged food industry. Americans spent $32 billion on it last year, according to AllianceBernstein.
The company sees similarities between its pet and human food businesses, especially when it comes to consumer trends.
In pet food "we see the same kind of trends that we do in human food," said Harmening, calling the phenomenon a "humanization of pet food." Consumers are increasingly interested in natural and organic foods for themselves and for their pets, he noted.